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Should The Billionaire Topshop Tycoon Be Allowed To Avoid Tax?

02/01/2011 22:51 | Updated 22 May 2015

When I heard about the protestors who brought shopping to a standstill at the flagship Topshop store on London's Oxford Street over the weekend, my first reaction was: wish I'd been there!

The sight of a group of people demonstrating against tax avoidance – And in a fashion store! With slogan T-shirts! - was a gratifying one in an era when preaching tax cuts has become acceptable for politicians of all hues.

Sir Philip Green, owner of the Arcadia Group which has Topshop and half the high street - Dorothy Perkins, Miss Selfridge, Wallis, Evans, Burton and BHS - under its belt, is a billionaire. The Sunday Times Rich List put his personal wealth at £4.4bn at 2008.

He is also a tax avoider. Although Sir Philip runs his hugely successful retailing empire in the UK, the company is actually registered in his wife name and since she lives in Monaco, she does not pay a penny of income tax.

In 2005, Philip Green wrote himself a paycheck of £1.2bn – the biggest in British corporate history. UK Uncut, the group that organised the protests over the weekend, estimates that by channelling this through his network of offshore accounts he saved close to £300m in tax.

Sir Philip has no shame about this state of affairs. His favourite line is that he already pays "tens and tens of millions of pounds" through corporation tax and as one of Britain's largest employers.

But this just doesn't wash. I can't imagine him taking the same approach to profits, as in: "Look guys, we've made pre-tax profits of £213m this year. I'm happy with that. Let's not try to make any more. It's just greedy."

As if this were not galling enough, David Cameron personally hired Sir Philip to lead an Efficiency Review into government spending earlier this year.

Commenting on the retail tycoon's findings, Francis Maude, minister for the Cabinet Office, said: "Every pound that we can take out of the cost of government is a pound we can protect on the front line." Hmm. What about every pound we can pay into government?

Of course Sir Philip is not alone. Only this week Kraft Foods, the new owners of Cadbury, confirmed plans to move part of the business to Switzerland, therefore avoiding millions of pounds of corporation tax.

Tax Research UK estimates that £25bn is lost to government coffers each year as a result of avoidance and planning. That's enough to cancel out nearly a third of the £81bn of cuts the government is planning to impose.

At the risk of sounding hopelessly naïve, I do believe in paying taxes. Where else will the money for schools, roads, hospitals, welfare, mental health care and the myriad other unsexy but essential public services and safety nets come from?

This isn't about being anti-business or anti-success. It's about saying that we all have a responsibility to contribute to the society we live in, however imperfect it may be.

As well as shutting down Topshop and other London stores, UK Uncut's day of action on Saturday also targeted stores across the country in Nottingham, Leeds, Manchester, Birmingham, Newcastle and Oxford, among others.

Further days of action will follow – there's a full list on their website. Maybe I'll see you at the next one?

Laura Smith is a freelance journalist, writer and editor who has written for publications including The Guardian, The Independent, Marie Claire and the Evening Standard. www.laurasmith.org

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