Mid Wales

Crickhowell traders' overseas tax loophole plan

Crickhowell town centre Image copyright Andy Dolman

Traders in a rural Welsh town have been delving into how international big business exploits tax loopholes - in a bid to cut their own bills.

Shopkeepers in Crickhowell, Powys, say they have been on a "journey of discovery", investigating how to register themselves overseas.

The tax "experiment" will be screened on BBC Two next year - following the business owners to the Isle of Man.

UK tax officials said new rules will tackle abuses by international firms.

But in the BBC documentary, the owners of a smokery, book shop, an optician, bakery, and an outdoor adventure clothing shop, came together to find out how they could learn the tricks of business giants such as Starbucks, which was recently told it must pay back millions of pounds after European tax breaks were ruled illegal.

Jo Carthew, who runs a smokery and online hamper business in the town, said: "Until now, these complicated offshore tricks have only been open to big companies who can afford the lawyers' fees.

"But we've put our heads together, and worked out a way to mimic these big tax dodgers. It's jolly clever."

Image copyright Getty Images

In addition to looking at how companies register themselves in places such the Isle of Man, the traders also visited Amsterdam in the Netherlands.

Irena Kolaleva, an optician in Crickhowell, told BBC Radio Wales' Jason Mohammad: "We started the journey to find out how it works. Now we've got a moral obligation.

"We want to bring attention to the problem. It is very simple. If a company is based in this country and employs people in this country, who pay their tax - normal people their tax - why do they use legal loopholes paying their tax abroad?"

She said this was not about fighting tax and revenue officials - rather about creating a level-playing field for business in the UK - small and large.

In a statement, an official HM Revenue and Customs said: "HMRC enforces the tax rules fairly across the board irrespective of the size or structure of the business, and we are always happy to give advice and support to taxpayers who want to play by the rules.

"The government is clear that multinationals must pay their fair share of tax so it has introduced new legislation to prevent multinationals from diverting their UK profits from the UK tax system and has invested additional funding in HMRC to tackle abuse by multinationals."

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