Is paying less tax immoral?
by Andy Minifie - National Managing Partner on 15 August 2012
Over the last few months and weeks there has been increasing antagonism in the media towards people who have arranged their affairs to pay less tax.
People like Jimmy Carr and Gary Barlow are being held to account for paying less tax – not by the tax authorities or in a court of law but in the press and on the 6 o’clock news.
Let’s be clear here, we are not talking about tax evasion which is not paying tax by breaking the law, we are talking about tax avoidance, which is not paying your tax and not breaking the law!
It would appear that popular opinion is moving towards a situation where arranging your tax affairs in a perfectly legal manner to reduce your tax liabilities is thought to be immoral. But more than that, it’s probably only immoral if you are rich or famous, it is deemed to be wrong for someone to avoid tax on a £1m bonus but if someone asks for a discount for cash to avoid VAT then that is ok?
I am not writing this to discuss if it is morally correct or not to reduce tax liabilities and pay less tax, as that is a matter for the individuals conscience, I am just considering the hypocrisy of the situation where legal tax avoidance on a £1m bonus is reprehensible while illegal tax evasion by paying smaller amounts in cash is done every day on every street corner.
According to the public accounts committee more than 2 million people make cash payments every year which costs the taxman (and us as taxpayers) £2bn a year.
I could understand this when the criticism comes mainly from the readers of the tabloid press but now they seem to be being joined by politicians. What right do they have to criticise the people who are trying to play inside the rules that they have set while ignoring the people who are not playing by the rules but they are not even playing the game!
If politicians have a problem with people paying less tax then they should change the rules of the game to achieve what they want not just pontificate as moral dictators. But then you have to ask yourself if after the expenses scandals over the last few years’ politicians are the right people to be playing the “higher moral standards” card at all.
My advice to them is to change the legislation so that it’s easy to understand and then enforce it rigorously, zero tolerance within a fair system will give a far better result than we have now, and there might even be enough tax monies left over for another duck house or two…
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