Brexit will allow us to have lower, fairer and simpler taxes

Brexit will allow us to have lower, fairer and simpler taxes

Leaving the EU offers a real opportunity to make our economy more vibrant and increase Britain’s economic growth rate. We should make the most of the economic opportunity by modernising our tax system so it works for Britain, not big business tax avoiders. A system of lower, fairer, simpler taxes will enable us to be a more internationally attractive destination for businesses investment.

Yet that can only happen if everyone pays their fair share. Everyone includes big businesses who too often seem to think they live in some post-tax age. They think it’s OK that the person cleaning their offices pays more in tax than they do. It’s not – and I have been campaigning in Parliament for years to put a stop to the industrial scale tax avoidance by big businesses.

The problem I’ve run up against time and again is European Law. For years, international businesses have exploited EU laws such as the Parent/Subsidiary Directive to dodge taxes. EU laws intended to stop member states “discriminating” against businesses from other member states have also been used to undermine our tax system, with the support of the European Court of Justice (ECJ). Not only are they not paying business taxes – they want us to pay them some £44 Billion in tax reclaims by exploiting EU laws.

When the UK leaves, it’s vital we are no longer bound by EU tax laws that hinder us from making our tax system work fairly. This is a great opportunity to see that big international businesses are required to pay their fair share.

A free hand will make it easier to take forward the long overdue modernisation of business taxation – especially of internet businesses. Amazon will tell you that ordering goods from your kitchen table in the UK that are delivered from a warehouse in the UK is somehow taxable in Luxembourg. Do you buy it? Meanwhile, Google with five British offices, 5,000 staff and a £1 billion super-HQ in London will tell you they are only taxable in Ireland. This kind of tax fiction infuriates people. The extra funds raised from reforming the tax system to ensure that everyone pays their fair share could be used further to reduce business taxes across the board, with a policy of lower, fairer and simpler taxes – starting with the least well off. In this way, we can make the UK a more internationally competitive low tax country where businesses will want to be.

But it’s not just business taxes. VAT is a tax whose rules are set by the EU. I’ve been battling in Parliament against massive VAT fraud by overseas traders on the online marketplaces run by businesses like Amazon and eBay. I’ve been making the case for businesses like Amazon to be required to collect the VAT when sales are made through their marketplaces at the same time as they collect their own commission.

At the moment, many sellers do not charge VAT on goods they are supplying from UK warehouses, even though they should do. This was the subject of a study published by the National Audit Office and then discussed by the Public Accounts Committee and the Treasury Select Committee. A change in the law was brought in last year to force the registration of these businesses, with a backstop of making companies like Amazon and eBay jointly and severally liable. It’s got a lot of these businesses to register – but who knows if they are accounting for all the VAT they should be. This is not some trivial matter. The potential tax we’re talking about runs into billions of pounds – money we need to fund the NHS and our schools.

So we’ve seen an improvement. However, as the VAT rules are set by the EU and very inflexible, we cannot currently force the likes of Amazon and eBay to collect VAT. As an independent country in full control of our tax system we would be able to – as indeed they have in Australia with GST, their equivalent tax to VAT. On July 1st Australia introduced legislation forcing Amazon to collect sales tax for third-party sellers. Amazon went bananas about this. But the Australians stuck to their guns and saw it through. I have no doubt the Australians will soon end up with a lot more tax revenue. And soon see their high streets compete on a more level tax playing field.

Now Euro-enthusiasts don’t want you to learn that we can build a nation of fairer taxes. The other day I incurred the ire of Matt Kelly, editor of the New European. I tweeted that leaving Europe we would be able to take back control of our tax system. I even had the nerve to say that we should adopt the Australian approach to make Amazon collect UK VAT in its online marketplace. Sadly my stance does not accord with his love of all things EU. So he challenged me to write an 800-word think piece justifying my stance that was required to be thoughtful, sophisticated and rely on facts. My message to Mr Kelly is to be careful what you wish for – and to you, dear reader, is that we need to get as far from the EU as fast as we can so we can reap the full benefits of independence and what the globe has to offer. Let’s start with building a tax system that is fair to all and makes big business pay their fair share of taxes.