I just got round to watching the Panorama documentary on corporate tax avoidance, originally broadcast on Monday:
http://www.bbc.co.uk/iplayer/episode/b01hzg7y/Panorama_The_Truth_About_Tax/
If you read Private Eye, there's nothing new in it - the prevalance of high profile British corporations shifting profits to Luxembourg to slash their tax bills has been exhaustively covered there. I'm sure it will have been eye opening to many viewers though.
Most interesting were the ideas discussed in the last few minutes - the implications of changes in modern business and tax planning. as opposed to their mechanics.
The suggestion is that, as countries compete to create attractive tax regimes to tempt multinationals to their shores, governments will just have to accept this siphoning of profits to low tax regimes if they want the multinationals' presence. I think that's probably completely accurate. It used to be the case that the head office of a massive company was an almost impossible thing to move. Now it's an inconvenient thing to move. If the tax savings are big enough, the the inconvenience can happily be swallowed. So anybody hoping that some kind of aggressive crackdown on this type of corporate tax dodging/planning is going to be disappointed.
The logical conclusion that follows on from that is that low tax/low spend government is going to be much more compatible with modern business than high tax/high spend government. It's easy to forget that almost all tax revenues are ultimately derived from the activities of business, but governments will overlook that at their peril. At the moment, though, it seems fairly clear that the public mood is very much anti-business. It's a tough spot for a politician - on the one hand, the reality is that they must be business-friendly, because that's where all the money comes from. On the other hand, they must convince a large part of the electorate that they're going to come down hard on businesses and somehow punish them. That can't be sustainable indefinitely.