The SNP manifesto promises £118 billion to be invested in public services. This can only be done if the tax revenue can be raised. The only way to do this is to scrap ‘limited partnerships’ which enable tax avoidance. To do so takes away the worry that raising the level while the Scottish Parliament has no control over tax avoidance would actually lead to a loss of revenue. The manifesto also promises to introduce a tax on bankers’ bonuses.
According to the Department of Business, Energy and Industrial Strategy the number of limited partnerships registered in Scotland increased by 237% while in the rest of the UK it was only 42%. This quote from CCH Daily yesterday explains:
‘When it was revealed that Scottish limited partnerships were being used for criminal activity, fraud and tax avoidance, we knew we had to act fast to protect Scotland’s reputation as a world class place to do business,’ SNP MP for Kirkcaldy Roger Mullin said. ‘After repeatedly disregarding their duty to act, the Tories were eventually forced to do a U-turn and instigate a review into limited partnerships and criminality.’
Here’s an explanation of these limited companies from Richard Murphy:
‘To summarise the law on Scottish Limited Partnerships, they are legal entities that are separate from their members that are not taxable in the UK if none of their members are UK resident. What is more, they do not have to file their accounts on pubic record in this country unless the so called general partner responsible for managing its affairs is a UK limited company. Having a general partner registered in a place like the British Virgin Islands does permit the exemption from filing accounts. The result is that Scottish law is allowing the creation of entities that can be used for tax avoidance and evasion behind a veil of near total secrecy that are as likely to be effective for these purposes as anything available in most more widely recognised tax havens.’