The people of Crickhowell in Wales are taking their town's businesses "offshore" to avoid paying tax much in the way that big multinationals do. As part of a BBC documentary to be televised next year, a group of shopkeepers and independent business owners from the picturesque Powys town, have mimicked the accounting tricks of large corporations and presented their own DIY offshore tax plan to HMRC.
The documentary, The Town That Went Offshore, will highlight the tax-dodging schemes of companies like Facebook, which paid less tax than an average single worker last year, or Caffè Nero, which hasn't paid UK corporation tax since 2007. And the Crickhowell shopkeepers hope it will encourage other towns across the UK to follow suit.
Now I think that is a brilliant idea. Just imagine a country in which, one by one, all the towns start moving offshore. You could have Totnes opening a subsidiary of itself in the Cayman Islands. Ipswich denying that any part of itself is actually based in the UK, or a flimsy cardboard version of Southend popping up in the Isle of Man (actually that one might already exist).
Towns could start funnelling all their profits into countries with lower tax rates. It would bring a whole new meaning to the idea of twin towns. It could get slightly monotonous in terms of signposts – "Oh, look dear, another town that's twinned with Luxembourg" – but hey, we'll have to make some sacrifices.
Once our towns have got toeholds in offshore tax havens, we can all go about siphoning off our profits, making internal loans and interest payments and paying huge bonuses to ourselves in Liechtenstein. Just imagine the scenario – a butcher in Southport could sell his shoulder of lamb at a knock-down price to Southport-in-Anguilla, then sell it back at an inflated price to Southport-in-UK (as it will now have to be known).
One of my favourite schemes is the so-called Double Irish used by Google to dodge millions of pounds worth of tax in the UK. This one might take a bit longer. It would involve UK towns setting up two "Irish" versions of themselves. The first "Irish" version of the town would have to be set up in a (non-Irish) tax haven like Bermuda. The second "Irish" version of the town would be based in Ireland itself. If say Portishead were to adopt this scheme, it could then transfer its overseas intellectual property rights to Portishead-in-Bermuda before licensing them to Portishead-in-Ireland, a fully-owned subsidiary of Portishead-in-Bermuda. Payments between these two towns would then be non-tax deductible for the original Portishead.
Simple really. If they wanted to be even more cute, they could then book their profits via a Dutch "shell" town (Portishead-in-Netherlands, presumably). This would finish off the classic "Double Irish with Dutch Sandwich" – something I'm sure I've tried to order after a heavy night on the town.
Towns with lots of coffee shops like, say, Brighton could use a similar scheme to one that enabled Starbucks to make sales of £400 million in the UK last year whilst paying no corporation tax. Brighton could simply transfer profits in royalty payments to its Dutch sister town (Brightdam perhaps?), then buy all its coffee beans from somewhere like, say, Switzerland and finally pay high interest rates to borrow money from the foreign bits of itself.
My own home-town of Poole has a rich history of black-marketeering, so I'm sure my fellow Poolites would jump on the opportunity to move offshore. My favoured option for my place of birth would be the "Perpetual Traveller" tax dodge. It would suit, I feel, our historic modus vivendi as pirates and smugglers.
We could have our citizenship in a country that doesn't charge taxes on money earned abroad, our legal residence in a nice tax haven like, say, the Bahamas, our business base somewhere with low corporate tax rates, our asset haven in a country with little or no capital gains tax, and our "playground" – where we spend our earnings – somewhere with no VAT. I quite fancy Dubai.
All in all, I can see why the business people of Crickhowell have jumped on this idea. It really is an exciting vision of Britain moving forwards (and kind of outwards). Soon I'm sure every town in the UK will have followed suit.
Soon the only people left paying tax in the UK will be immigrants – a situation that might cause Nigel Farage to spontaneously combust in a sticky mess of confusion and misplaced anger.
And no doubt George Osborne will do nothing other than praise us all for our entrepreneurial spirit. He certainly won't do anything to crack down on our tax avoidance. After all, as he well knows, if you're too strict on companies, they'll all move out of the country, and then where would we be? Er...