Sunday, 15 July 2012

Olympics Tax Dodge?

UK Uncut are up in arms again; this time it's the Olympics:

The Olympic site has become the world’s newest temporary tax haven. Instead of funding our vital public services, or refunding the British public for paying for the Olympics, billions of pounds of profits made by multinational companies with monopoly rights to exploit the Games will flow directly into the pockets of shareholders and CEOs.

The Games’ ‘partner organisations’ including the likes of McDonald’s and Visa have a temporary exemption from both UK Corporation Tax and UK Income Tax. According to a report published by Ethical Consumer, Olympics-related corporate partners and service providers are due to make £2.7bn in revenues this summer. They will be avoiding over £600m in tax. Forget Bolt and Ennis, the real winners at the Games are the corporate sponsors.

Not withstanding that the Ethical Consumer report attributes that £2.7bn as revenue earned by the not-for-profit International Olympic Committee, this is missing the point somewhat. The tax exemptions are part of the deal of being awarded the Olympics and specific legislation went through parliament to enact this, therefore it cannot be tax avoidance. Olympics or no Olympics, however they came up with the £600m figure which I suspect is a gross exaggeration, it would never have been tax due so in effect HMRC has lost nothing. Surprisingly, UK Uncut have chosen to focus on this rather than the £11bn obscenity of the games themselves...

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