Crickhowell’s tax plan: an example of ‘people power’ raising awareness of injustice and HMRC’s failures

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Crickhowell has an independent high street with very few of the trading names which now dominate look-alike urban and suburban commercial centres. The town made news earlier this year after offering shares to residents at £50 each to buy their Grade II listed Corn Exchange pub from Punch Taverns to avoid it being used as a convenience store by one of the large retail chains.

The FT reports that the town’s traders, including a salmon smokery, local coffee shop, book shop, optician and bakery have now submitted tax plans to HMRC, using the offshore arrangements favoured by multinationals. They hope that their ‘tax rebellion’ will spread to other towns forcing the Government to tackle how Amazon, for example, paid £11.9 million tax last year on £5.3 billion of UK sales.

The details of the scheme are not in the public domain, but townspeople say it involves shifting intangible assets to the Isle of Man and setting up a trading arm in the Netherlands.

High street coffee shop owner Steve said: ‘I have always paid every penny of tax I owe, and I don’t object to that. What I object to is paying my full tax when my big name competitors are doing the damnedest to dodge theirs.’ Starbucks, for example, has paid £8.6million in UK corporation tax since it opened its first shop in London’s Kings Road in 1998, funnelling revenues/royalties out of the UK and into the Netherlands and Switzerland where they have been offered better tax deals.

Retailers are ‘trying to create a level playing field’ by changing the law

Jo Carthew, who runs Crickhowell’s Black Mountain Smokery told the Independent: “We do want to pay our taxes because we all use local schools and hospitals but we want a change of law so everyone pays their fair share”.

Samantha Devos of Number Eighteen café cites the example of Facebook, which paid less than £5000 in corporate tax last year, according to the government’s ‘tax gap’ report, and insists that spending cuts would not be needed if big companies paid their tax.Steve Askew, the local baker, says the traders never intended to put the tax plan into practice. Their goal is to embarrass big companies and the government. “Any right-thinking person accepts we have to pay taxes. What people can’t accept is the injustice,” he added.

Despite the findings of the government’s Public Accounts Committee (PAC) – massive staff redundancies and poor performance – HMRC has responded by pointing to its extra funding to crack down on multinational avoidance and this April’s introduction of the diverted profits tax, a new “Google tax” on multinationals moving profits out of the UK. It also publishes estimates of the difference between tax paid and the amount that should be paid. This attributes just £1bn of the £34bn gap to tax avoidance.

HMRC speaking with ‘forked tongue’? Is it actually in meltdown? See the Committee of Public Accounts’ report on Revenue and Customs (summary and pdf): “HMRC still failing UK taxpayers”.

Will this town centre community-owned shop regenerate the High Street?

the bakery dunbar2A new community-owned bakery in Dunbar, East Lothian, has been hailed as a prototype for other towns looking to revive their high streets.

Well over 300 village shops and pubs have now been reopened or saved from closure and owned by members of the local community – as ‘one-off’ ventures – sometimes with help from funders like the Plunkett Foundation and Co-operative and Community Finance.

Dunbar is no village, but a charming coastal town, where a new supermarket opening on the outskirts had added to the problems already facing the town centre retailers: Allen Simpson said it was beginning to die. Reopening a bakery was part of a wider strategy, regarded as the first step towards regenerating Dunbar town centre.

village sos 2Perhaps inspired by the village champions concept, when the news came that a bakery that had served the town for 150 years was going to close due to retirement, Allen, an independent financial adviser, worked with other members of Sustaining Dunbar, the local community development trust and Transition initiative.

sustaining dunbarThey commissioned a survey which showed that there was still strong demand for freshly baked bread and The Bakery, a community benefit co-operative, was set up in 2011, funded through shares taken by 300 local people (plus another 200 to date), a lottery grant and the Co-operative Loan Fund.

Allen Simpson, who became the co-operative’s deputy chairman and treasurer, said that after the success of this venture they would consider setting up others of benefit to the town, as long as they didn’t threaten existing businesses: “We would like to source and mill our own wheat and look at delivery options”. By attracting people to the town centre for their fresh bread it is hoped that they would then do other shopping in the vicinity. He ended:

“If you don’t have a thriving High Street, every trader is affected and it has a knock-on effect on house prices. Running a bakery as a co-operative on a not-for-profit basis gives a margin that a commercial owner would find difficult to sustain. It is providing a community service that everyone wants and will bring people back to the High Street – with huge benefits to the town as a whole.”