Last week, former Radio 1 Disc Jockey, Chris Moyles, became the latest well-known figure to be caught out trying to avoid paying tax. During the time of his attempted cheating of the system, he was in a handsomely remunerated, publicly-funded position.
The attitude he displayed was one of, 'What can I get away with?' It is indicative of a problem that seems to affect so many when it comes to paying tax. The majority of persons, entities or corporations who follow this position are of course those wealthy enough to hire the accountants and lawyers who will back up their assertions that this practice is legal (sort of and in so much as you probably won't get caught) and therefore okay. Morality is never a consideration.
Let us not blame only the super-rich for tax avoidance, plenty of averagely wealthy people are getting away with a lower tax bill too. Government should be cracking down heavily on loss-making schemes like the one attempted by Moyles. The amount of prosecution and punishment is still too low.
Non-domiciling is another common method of avoiding tax. This involves an individual (the Non-dom) being registered abroad for income and inheritance tax purposes in order to take advantage of a lower rate. This practice is commonplace, poorly regulated and laden with loopholes. They may cite legality, but in many cases it is certainly immoral and based on thin and questionable legal justification. Don't believe me? Type 'non-domiciled status' into any search engine and you will find a number of accountancy firms offering to administer the best deal for you.
A total investigation of all those indulging in these kinds of practice should be undertaken. Fines for non-compliance should be retroactive and punitive. Claimed ignorance or responsibility-shifting to accountants or lawyers not an option. Your money, your responsibility. Interest should be charged on any underpayment where it can be proven that each claimant was not meticulously adhering to the rules. Progress has been made in this area, but still not enough. Maybe ATOS could do a side-line in a different kind of assessment?
Of course, some wealthy citizens are decent, moral and responsible. Too easily detractors will claim that articles like this are 'an attack on the rich'. Let's be clear, this is not an attack on the rich, it is an attack on the unscrupulous.
Tax avoidance is a practice that has a profoundly negative effect on the UK economy. Estimates on how much these practices cost the public purse every year vary with one putting it as high as £69.9billion. HM Revenue and Customs differ, estimating it was £35billion for the tax year 2011-2012.
So what should government do? If we tax these 'wealth creators' won't they just move abroad and take all their valuable wealth with them? Some of them might, and good riddance if they do, but maybe then closer monitoring of their remaining shares and companies in this country could come into force. If more forensic accounting was threatened against these characters then they would have to face up to the same responsibilities the rest of us do, or face prosecution and fines. If they hide behind international borders then measures need to be available to freeze or seize any UK assets.
But look, this company created some jobs. So what? Does job creation mean a company or individual is above the standard applied to the rest of society? Should every act of employment make you a saint who need not be held to account. If such a ludicrous and outside-the-law principle is applied then where do we draw the line? Should taxation all be about the best deal that can be done with HMRC? When I was little my dad paid me to clean his car, does that mean he should have paid less income tax?
A beefed up investigative approach to these figures who rob the public purse with an outrageous sense of entitlement would reap returns that far exceed the cost of investigation. They did it in El Salvador, with incredible results.
The media should also contribute. Seldom can you pick up a newspaper or turn on the television without hearing about benefit cheats. This is undoubtedly dishonest, but in comparison they cost the economy very little. Let's see more shows focusing on high-budget tax dodgers and their accountants. Why don't more newspapers investigate some of the high-profile business people and wealthy individuals with questionable tax arrangements? Why is there not more on TV? 'Tax-Dodge Street' maybe? The number of public exposures compared to the amount of money lost each year is not at all proportional. Greater coverage of corporation tax avoidance could be combined with boycotts of companies and their subsidiaries. Tax avoidance should be framed for what it is, a crisis that is costing (most of us) an obscene amount of money.
This is an issue that doesn't stand on the left or the right of politics. Any decent and moral citizen would agree. Politicians, do what is right, ramp up your efforts both domestically and internationally. The money that these unprincipled figures might donate to your parties will be irrelevant in comparison to the public approval you will gain. There really is nothing to lose.Suggest a correction