One minute with Vanessa Houlder, tax journalist at the Financial Times.
You’ve been writing about tax policy for more than a decade. How has the tax landscape changed over that period?
Before the financial crisis, tax was something of a Cinderella subject: it had a huge influence on the behaviour of companies and individuals but this was not widely recognised by the public. There was a lot of talk about getting tough on evasion and avoidance. But tax authorities were unable to track down money stashed in secretive offshore havens and edgy tax planning was commonplace. Globalisation and tax competition had eroded companies’ loyalty to their home countries, while businesses often said they were fed up with high taxes and likely to vote with their feet. Tax was commonly described as legalised theft and it was hard to find anyone who thought there was a moral dimension to paying it.
The bail-out of the banking system was a turning point. Tax shot up the political agenda. Anger over perceived tax abuses spilled out onto the streets. Journalists and campaigners started to trawl through the tax affairs of businesses and individuals, exposing them to far more scrutiny than they ever expected. Governments made the most of the changing climate and have cracked down on avoidance as much as they can.
Which of your reports have made the biggest splash?
Some of the best read stories have been about tax havens. They go all the way back to 2006, when I picked up rumours that HMRC was planning a quasi-amnesty to encourage tax evaders to come forward. Since then, the international effort to prise open secretive offshore centres – and efforts to counter them – has been a rich source of stories.
The low tax payments of many companies, particularly the technology giants, have been another popular theme. It started a decade ago with a report that one in three big companies paid no corporate tax, which made a bit of a splash. In 2011, I was part of a team investigating some extraordinarily contrived ploys by international banks. We also looked into the history of the ‘check the box’ rules – which enabled US multinationals to pay low rates on their foreign profits. The role played by ‘host’ governments has also provided some memorable reporting opportunities. I did a lot of digging into the role played by Luxembourg in corporate tax planning and later – after ‘LuxLeaks’ – into the reasons why the Grand Duchy succeeded in attracting so many companies.
Where the debate in tax is heading?
Immediately after the vote to leave the EU, there was a lot of talk about the UK becoming a tax haven. But, if anything, higher taxes now seem likely. Taxes are about to rise to their highest share of national income since the early 1980s. Brexit and the needs of an ageing population will increase the strain.
After the backlash against the Conservatives’ pre-election proposals for funding social care, it might be rash to predict a rise in wealth taxes. However, the longest pay squeeze since Victorian times has focused increasing attention on the distribution of income and assets. With more than half the country’s wealth owned by the baby boomer generation, politicians will be keen to find new ways to tap into it.
What makes a good tax story?
I remember a tax director tweaking the adage that ‘There is no such thing as a good tax’ to say ‘There is no such thing as a good tax story.’ That’s not always true but it’s a fair comment. Many people do not find tax intrinsically interesting but they are fascinated by tax avoidance, especially if it can be depicted as a tale of money, greed and power.
Of course, taxes directly affect us all, so some of the best read stories are about the tax system and how HMRC interacts with taxpayers. Many FT readers also want to understand the economic and political drivers behind tax policy. That creates scope for exploring for why the tax system is so inefficient, complex and unfair and what could be done to improve it. That can only be a good thing. For all that we argue incessantly about taxes, the level of debate about them is often pretty poor.
Finally, you might not know this about me but…
Many years ago, when I was learning to sail, I managed to sink a supposedly ‘unsinkable’ buoy. As Audrey Hepburn said, nothing is impossible.
One minute with Vanessa Houlder, tax journalist at the Financial Times.
You’ve been writing about tax policy for more than a decade. How has the tax landscape changed over that period?
Before the financial crisis, tax was something of a Cinderella subject: it had a huge influence on the behaviour of companies and individuals but this was not widely recognised by the public. There was a lot of talk about getting tough on evasion and avoidance. But tax authorities were unable to track down money stashed in secretive offshore havens and edgy tax planning was commonplace. Globalisation and tax competition had eroded companies’ loyalty to their home countries, while businesses often said they were fed up with high taxes and likely to vote with their feet. Tax was commonly described as legalised theft and it was hard to find anyone who thought there was a moral dimension to paying it.
The bail-out of the banking system was a turning point. Tax shot up the political agenda. Anger over perceived tax abuses spilled out onto the streets. Journalists and campaigners started to trawl through the tax affairs of businesses and individuals, exposing them to far more scrutiny than they ever expected. Governments made the most of the changing climate and have cracked down on avoidance as much as they can.
Which of your reports have made the biggest splash?
Some of the best read stories have been about tax havens. They go all the way back to 2006, when I picked up rumours that HMRC was planning a quasi-amnesty to encourage tax evaders to come forward. Since then, the international effort to prise open secretive offshore centres – and efforts to counter them – has been a rich source of stories.
The low tax payments of many companies, particularly the technology giants, have been another popular theme. It started a decade ago with a report that one in three big companies paid no corporate tax, which made a bit of a splash. In 2011, I was part of a team investigating some extraordinarily contrived ploys by international banks. We also looked into the history of the ‘check the box’ rules – which enabled US multinationals to pay low rates on their foreign profits. The role played by ‘host’ governments has also provided some memorable reporting opportunities. I did a lot of digging into the role played by Luxembourg in corporate tax planning and later – after ‘LuxLeaks’ – into the reasons why the Grand Duchy succeeded in attracting so many companies.
Where the debate in tax is heading?
Immediately after the vote to leave the EU, there was a lot of talk about the UK becoming a tax haven. But, if anything, higher taxes now seem likely. Taxes are about to rise to their highest share of national income since the early 1980s. Brexit and the needs of an ageing population will increase the strain.
After the backlash against the Conservatives’ pre-election proposals for funding social care, it might be rash to predict a rise in wealth taxes. However, the longest pay squeeze since Victorian times has focused increasing attention on the distribution of income and assets. With more than half the country’s wealth owned by the baby boomer generation, politicians will be keen to find new ways to tap into it.
What makes a good tax story?
I remember a tax director tweaking the adage that ‘There is no such thing as a good tax’ to say ‘There is no such thing as a good tax story.’ That’s not always true but it’s a fair comment. Many people do not find tax intrinsically interesting but they are fascinated by tax avoidance, especially if it can be depicted as a tale of money, greed and power.
Of course, taxes directly affect us all, so some of the best read stories are about the tax system and how HMRC interacts with taxpayers. Many FT readers also want to understand the economic and political drivers behind tax policy. That creates scope for exploring for why the tax system is so inefficient, complex and unfair and what could be done to improve it. That can only be a good thing. For all that we argue incessantly about taxes, the level of debate about them is often pretty poor.
Finally, you might not know this about me but…
Many years ago, when I was learning to sail, I managed to sink a supposedly ‘unsinkable’ buoy. As Audrey Hepburn said, nothing is impossible.
