She was making the opening remarks at today’s Global Tax Transparency Summit which has brought together representatives from 33 tax jurisdictions around the world, 42 international parliamentarians and 86 international representatives, who cumulatively represent two billion people, to discuss ways of ensuring a level playing field globally for taxpayers.
Hillier used the footballing world as an example of the extremes of rich and poor. She confessed she was not a big fan but she did know about Jose Mourinho’s “alleged avoidance of the tax he should have paid here and in Spain”. He maintained he had acted lawfully at all time, she said.
“But for many ordinary football fans the gulf between their lives and those of the managers and players they admire is enormous.
“Many will be shocked at the lengths some of the big figures in football... go to avoid paying tax on their enormous earnings.
“And these complex and convoluted arrangements are seen as normal to those who defend it in the press.”
She assured the summit that her committee would continue to put pressure on both HMRC and the government to identify and tackle tax avoidance schemes which are marketed to members of the “super rich” club across the globe.
Hillier also explained the work the PAC was doing to pursue companies that did not pay their fair share of tax, and their advisors.
She pointed to the case of pharmaceutical company Shire which used PwC as its adviser. Shire had set up a complex system of structures: it was incorporated in Jersey but domiciled in Ireland for tax purposes.
Most of its 5,600 staff were based in the US, there were 300 in the UK and 100 in Ireland, and none in Jersey. But there were two based in Luxembourg along with seven companies.
“Between them they were responsible for managing intra-company loans of around $10bn (£7.94bn), and held 52 directorships of companies.
“…Shire used the interest on intra-company loans to offset profits made in other countries, while paying a very low rate of tax in Luxembourg. Shire only paid 0.0156% on profits there.”
Hillier said the reason she was using the Shire example was because the details were exactly the kind the PAC wanted to be routinely made public.
“As the parliamentarians among us who scrutinise income and spending by our governments know, there is great value in transparency; sunlight is the best disinfectant.”
And she called on the global community of parliaments to work together to put pressure on governments to stop global tax avoidance. She suggested that other parliaments could follow the UK’s example and persuade their governments to change the law to include a power that enables them to introduce country-by-country reporting.
By the end of the summit, she added, she was aiming to have as many signatures as possible from as wide a range of countries as possible to an open letter urging governments towards greater transparency.