Christian Aid announced the launch of a ‘tax justice bus tour’ of the UK and Ireland as a new survey indicated that almost three quarters of British adults believe David Cameron should ‘demand international action’ to tackle avoidance and evasion. But the results of the poll, conducted by ComRes for Christian Aid, paint a more complex picture than some tax justice campaigners might have expected.
More than a third (37%) of respondents said they would consider using a tax haven to reduce their tax bill if they knew how to. More than half (54%) of 25-34 year olds, but only a quarter of those aged 55-64, said they would consider doing so. A tax haven was defined for this purpose as an ‘area or country that enables people to pay low or no tax’.
The online survey of 2,026 adults found that 56% regarded ‘tax avoidance by multinational companies in different countries across the world’ as ‘morally wrong’.
Those who associated the phrase with such activity included almost seven out of ten respondents aged 65 or over but only 39% of those aged 18-24. Only 4% of respondents thought such activity was ‘fair’.
No definition of ‘tax avoidance’ accompanied the poll results but a Christian Aid spokesperson told Tax Journal that the following distinction between avoidance and evasion was presented to the participants: ‘Tax avoidance is the use of legal loopholes to alter a person or company’s financial position in order to lower the amount of tax that they are obliged to pay. This differs from tax evasion where a person or organisation does not pay tax by illegal methods.’
‘Too easy’ to avoid tax
Almost four out of five respondents, including two-thirds of 18-24 year olds, agreed that it was ‘too easy’ for multinational companies in the UK to avoid paying tax. Just over half (55%) believed that the British government should make ‘make supporting developing countries tackle tax avoidance (sic) a greater priority than it currently is’.
Joseph Stead, Senior Economic Justice Adviser at Christian Aid, said: ‘This poll shows there is a huge public appetite for international action to tackle tax dodging both domestically and in developing countries. The public are clear that the government is not acting sufficiently, and that companies need to open their books more.’
Tax havens
A petition launched earlier this month by the campaign group 38 Degrees, calling on Google to pay its ‘fair share’ of tax, has attracted more than 48,000 signatures. Google defended its ‘substantial contribution’ to the UK economy through local, payroll and corporate taxes.
A contributor to The Guardian’s ‘comment is free’ pages claimed on Friday that the government had ‘better swiftly catch up with the gathering momentum of tax avoidance backlash’.
Tax professionals have acknowledged that the government’s proposed ‘general anti-abuse rule’ will not hinder international tax planning by some multinationals that choose to use tax havens to reduce their tax bills.
In a joint submission to HMRC earlier this year, the CIOT and ATT said it was ‘very telling’ that Private Eye had recognised that a GAAR would not meet the aims of the politicians and would ‘disappoint public opinion’. Private Eye had observed that a general anti-abuse power would not touch ‘big-time offshore avoidance’ that was considered ‘mere planning’.
In April the CBI defended ‘tax management’, which it defined as compliance with complex tax systems and the employment of experts to ensure that ‘[businesses] follow all the rules and take advantage of any tax reliefs available to them’. CBI Director General John Cridland said UK businesses needed to be competitive on the world stage and were ‘perfectly entitled to operate in low-tax jurisdictions for legitimate business purposes’.
‘Would my kids be proud of me?’
Today’s Financial Times reported that KPMG’s newly-appointed UK Chairman and Senior Partner, Simon Collins, ‘defends the right to mitigate tax liabilities but says some taxpayers have been taking things too far’. Adam Jones, the FT’s Accountancy Correspondent, wrote: ‘Tax advisers need their own moral compass, [Collins] says. But what does that mean in practice? “A test I often use is: would my kids be proud of me?” he suggests.’
But one tax adviser has claimed that ‘moral positions’ in relation to tax ‘are often fuelled by envy and a desire to disadvantage the influential or relatively prosperous’.
Writing in last week’s Taxation, Iain Macleod, a chartered tax adviser who heads the tax investigations department at EDF Tax Ltd, said: ‘It has been ingrained in our constitutional thought since Magna Carta in 1215 that citizens are ruled by law not by whimsical power plays. Tax planners don't expect, and don't get, any special favours. But we are all entitled to expect that we will be governed by law and not by pressure from special interest groups advancing arguments based not on the law, but on arbitrary and unexplained “moral” positions.’
Christian Aid announced the launch of a ‘tax justice bus tour’ of the UK and Ireland as a new survey indicated that almost three quarters of British adults believe David Cameron should ‘demand international action’ to tackle avoidance and evasion. But the results of the poll, conducted by ComRes for Christian Aid, paint a more complex picture than some tax justice campaigners might have expected.
More than a third (37%) of respondents said they would consider using a tax haven to reduce their tax bill if they knew how to. More than half (54%) of 25-34 year olds, but only a quarter of those aged 55-64, said they would consider doing so. A tax haven was defined for this purpose as an ‘area or country that enables people to pay low or no tax’.
The online survey of 2,026 adults found that 56% regarded ‘tax avoidance by multinational companies in different countries across the world’ as ‘morally wrong’.
Those who associated the phrase with such activity included almost seven out of ten respondents aged 65 or over but only 39% of those aged 18-24. Only 4% of respondents thought such activity was ‘fair’.
No definition of ‘tax avoidance’ accompanied the poll results but a Christian Aid spokesperson told Tax Journal that the following distinction between avoidance and evasion was presented to the participants: ‘Tax avoidance is the use of legal loopholes to alter a person or company’s financial position in order to lower the amount of tax that they are obliged to pay. This differs from tax evasion where a person or organisation does not pay tax by illegal methods.’
‘Too easy’ to avoid tax
Almost four out of five respondents, including two-thirds of 18-24 year olds, agreed that it was ‘too easy’ for multinational companies in the UK to avoid paying tax. Just over half (55%) believed that the British government should make ‘make supporting developing countries tackle tax avoidance (sic) a greater priority than it currently is’.
Joseph Stead, Senior Economic Justice Adviser at Christian Aid, said: ‘This poll shows there is a huge public appetite for international action to tackle tax dodging both domestically and in developing countries. The public are clear that the government is not acting sufficiently, and that companies need to open their books more.’
Tax havens
A petition launched earlier this month by the campaign group 38 Degrees, calling on Google to pay its ‘fair share’ of tax, has attracted more than 48,000 signatures. Google defended its ‘substantial contribution’ to the UK economy through local, payroll and corporate taxes.
A contributor to The Guardian’s ‘comment is free’ pages claimed on Friday that the government had ‘better swiftly catch up with the gathering momentum of tax avoidance backlash’.
Tax professionals have acknowledged that the government’s proposed ‘general anti-abuse rule’ will not hinder international tax planning by some multinationals that choose to use tax havens to reduce their tax bills.
In a joint submission to HMRC earlier this year, the CIOT and ATT said it was ‘very telling’ that Private Eye had recognised that a GAAR would not meet the aims of the politicians and would ‘disappoint public opinion’. Private Eye had observed that a general anti-abuse power would not touch ‘big-time offshore avoidance’ that was considered ‘mere planning’.
In April the CBI defended ‘tax management’, which it defined as compliance with complex tax systems and the employment of experts to ensure that ‘[businesses] follow all the rules and take advantage of any tax reliefs available to them’. CBI Director General John Cridland said UK businesses needed to be competitive on the world stage and were ‘perfectly entitled to operate in low-tax jurisdictions for legitimate business purposes’.
‘Would my kids be proud of me?’
Today’s Financial Times reported that KPMG’s newly-appointed UK Chairman and Senior Partner, Simon Collins, ‘defends the right to mitigate tax liabilities but says some taxpayers have been taking things too far’. Adam Jones, the FT’s Accountancy Correspondent, wrote: ‘Tax advisers need their own moral compass, [Collins] says. But what does that mean in practice? “A test I often use is: would my kids be proud of me?” he suggests.’
But one tax adviser has claimed that ‘moral positions’ in relation to tax ‘are often fuelled by envy and a desire to disadvantage the influential or relatively prosperous’.
Writing in last week’s Taxation, Iain Macleod, a chartered tax adviser who heads the tax investigations department at EDF Tax Ltd, said: ‘It has been ingrained in our constitutional thought since Magna Carta in 1215 that citizens are ruled by law not by whimsical power plays. Tax planners don't expect, and don't get, any special favours. But we are all entitled to expect that we will be governed by law and not by pressure from special interest groups advancing arguments based not on the law, but on arbitrary and unexplained “moral” positions.’
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