It's OK to quote Polly Toynbee now. David Cameron does. I'm on side, apparently. So take this from her column in the Guardian today:
Yesterday, promoting their latest survey of 87 top executives, the CBI said two-thirds complain about tax. Only two-thirds? Who are the one-third who are happy with their taxes? The CBI claims the UK's "burdensome and expensive" tax system is a major factor for the 20% of firms that shifted some operations abroad and the 30% considering it. Again, what's surprising is that they could drum up only a third of executives willing even to "consider" moving bits of their business abroad. It easy to see why: the World Bank finds UK firms have the lowest tax rate in the G7. Last year Britain had the highest foreign investment of any country in the world.
You can see why Cameron has to agree, can't you?
As for the survey itself, I have a feeling it looked like this:
Please tick all of the following you'd like:
- A tax cut
- A cut in red tape
- A free all expenses paid holiday in Barbados, care of the NHS (you know you're worth it)
Come on now, you can have all three! Don't be shy.
And still they couldn't get some to sign. That's because some, I am sure, in the CBI know that the claims embodied in the CBI survey are not just unattainable, but actually undesirable. Which is why I don't buy the arguments of those who say I am out of step with the reality of life. I back Toynbee on this one. It's some in business, and their advisers, who are acting in pursuit of profit, who are out of line. And there are some in business who seem to agree.
In society as a whole that agreement is bigger. Dave Hartnett, Director General of HM Revenue & Customs, suggested in June 2006 that research undertaken in Canada showed that 50% of taxpayers would be compliant irrespective of the circumstances, and 10% would be non-compliant. The remaining 40% were capable of being influenced into compliance. I think I'm addressing the 40% with the arguments I present. The 10% aren't ever going to agree. That may include many accountants. If they don't then the law will eventually bring them into line. And please let's have no argument about this not working. 10% did not agree with the abolition of child chimney sweeps, or giving holidays with pay, or maternity rights or the minimum wage. The environment is still available for abuse according to some. I accept that some people think that way. But the world did not and does not agree with them. And it's embraced all these issues, and the world is a better place as a result.
The world will be a better place when business sees it is utterly dependent upon government for its success, and vice versa. Then we might have a constructive partnership based on compliance, on both sides. This is possible because I think most people already believe that to be true. If accountants don't, that will be their problem at the end of the day.
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How do you draw the conclusion ‘society as a whole’ from the Canadian example? do you mean UK or global? If UK then it’s a different culture and different tax system. And VERY different from the US and its cultures.
On what basis did the Canadians think 40% could be persuaded? How?
How can you compare social issues of the kind you describe and tax law as a bludgeon? Tax evasion has been going on since the days of the tithe in English history and no doubt back into the mists of time elsewhere. It’s unrealistic to presume ‘they’ll be brought into line.’
But finally – what’s the basis for saying: ‘The world will be a better place…’ ? A Google search on business, government, partnership brings up a national development document in those terms for…Nigeria! Surely one of the most corrupt places on the planet.
I forgot – the current UK government came in on the back of trust and change. Last I saw, they were considered untrustworthy and no better than their predecessor for sleaze. Any alternative in mind, given that HMRC are there to deliver government policy?
I see from a news release yesterday the CBI thinks the imminent departure of Gordon Brown as chancellor is an opportune time to establish a committee of the great and the good to review UK business taxes.
http://www.cbi.org.uk/ndbs/press.nsf/0363c1f07c6ca12a8025671c00381cc7/64b9c70b4b30b953802572d600469cd4?OpenDocument
Anyone care to predict what might be in that review? Or more concisely, how many points off the corporation and income tax as well as SDLT rates they will be seeking?