Suppose prospective MPs were asked to sign a tax pledge before next year's general election? What might it say? This was an idea discussed at a PCS fringe meeting I spoke at last night. These are my ideas for a minimum commitment:
1. I oppose tax evasion and will demand that HM Revenue & Customs get all the resources and laws needed to beat it.
2. I am opposed to tax avoidance and will support all accounting and legal reforms aimed at exposing it.
3. I believe the tax avoidance industry harmful to the UK and will demand a General Anti-Avoidance Principle that will stop it in its tracks.
4. I believe tax abuse by multinational companies that use tax havens undermines developing countries and will demand measures to stop those companies and tax havens from undertaking that abuse.
And maybe these two are optional extras:
5. I believe that UK banks have prospered at a time when most in the UK have suffered and that the time has come to correct this. I support a Robin Hood Tax.
6. I believe in tax transparency and will put my tax returns on public record for the period during which I am an MP.
Any more thoughts?
Who will and won't sign?
And why?
I'm just thinking ahead.
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I will ensure that neither I nor my family benefit from any offshore tax arrangements.
Yes….
Pledge1 should make it clear that adequate resources for HMRC means increasing their budget, not cutting it like the coalition are now.
Agreed
“I will campaign for ALL tax returns to be made public?”
I think that simple step would go a long way to preventing some of the more egregious avoidance tactics, when the very wealthy can be easily called out on it.
As a very weary professional – how about
“I will commit to ensuring that the tax code is vastly simplified (total length not to exceed 1000 pages rather than the current 36000) and any doubts simply referred to HMRC to judge”; I suppose hand in hand with that needs to go “I will ignore point blank the ludicrous assertions that will inevitably be made by businesses that this won’t give them ‘certainty’, as though the current 36000 page mess that usually leads to court cases in case of big disputes offers anything more”.
More controversially:
“I will commit to abolishing non-domicile status; you either live in the UK and get taxed accordingly, or you don’t”. Most countries manage without it, and if you took away that one issue than almost all major tax dodging for UK resident non-domiciles would be removed at a stroke.
Interesting
What about ‘If you have a British passport, you pay British tax, less tax paid overseas on economic activities in those countries?’ No non-resident malarkey. Is that what you are thinking of Tomasso?
Also I would consider myself, putting an abbreviated income statement and balance sheet as well as tax returns on public record as I am self employed (albeit a bookkeeper and trainee accountant so it makes it easier for me!!)
Less legislation is definitely worth supporting, but not sure we’d ever get certainty anyway – governments seem to like it precisely because of the deterrent effect around avoidance.
More pertinently, the Chinese corporate tax code is well under 100 pages – but as a result of its being principles based, much decision making/interpretation does happen at the local office level. As a result, inbound MNCs are finding that identical transactions are attracting differing tax treatment depending which province the relevant subsidiary is operating in – not necessarily anything to do with avoidance, and not a good outcome; consistency must surely be a part of the regime?
And constitutionally (tripartite separation of powers etc)I’m not convinced HMRC should be the judge; properly financed independent Tribunals would be a better pledge to support.
A short tax code is always a licence for abuse
Hello Richard, hope you have recovered after your recent illness.
Here’s a suggestion: MPs should pledge to introduce a system allowing taxpayers to make additional voluntary payments to HMRC above their strict tax liability.
(I’ve heard mixed messages on whether this already exists — am not sure).
Anyone making such payments can choose to have their names disclosed publicly (e.g. on HMRC website) but only if they want to.
This would be to allow those civic-minded among us to recognise the importance of keeping the State properly funded. It is a bit like a charitable donation, but in recognition of the better concern the State has for the poor and downtrodden, compared to charities.
MPs who sign the pledge should then disclose their own contributions.
Thanks
Hi Richard,
I would strongly recommend that, despite the other good suggestions, you stick to the first four, or a similar four (or fewer) requests.
The reason being that I think it’s a great idea that, with the right publicity could really take off and be effective. It would have the best possible chance of succeeding though if it is as simple as possible. I would therefore stay away from FTT (as desirable as it may be to some). Maybe include number 6 too if there’s room.
As for who’ll sign. You’ll have no problem at all getting all prospective Green MPs to sign up – that’s for sure.
Thanks Matt
I agree re simplicity but am welcoming all ideas
Richard
I like the idea of the one regarding revenue funding and would include something along the lines of the one presented earlier. Something along the lines of
I will support all necessary funding of HM Revenue to ensure that the tax gap is reduced as much as possible and the right people pay the right amount at the right times.
thanks
I would add – Reform of the Treasury. I do hammer HMRC but the root cause of their inadequacy stems from the Treasury. And it is not just a case of Funding, it’s the stranglehold and influence it has on the management of HMRC.
I agree
They have little clue on tax
How about a preamble to the commitments, setting out what taxation is for – something like this, for example?
“Taxation expresses public policy in the distribution of wealth and of income as in the case of progressive income and property taxes; public policy in subsidizing or in penalizing various industries and economic groups; and isolates and assesses directly the costs of certain national benefits, such as health, education, infrastructure and social security.”
Amended from http://www.nakedcapitalism.com/2014/05/randy-wray-taxes-mmt-approach.html
Nice, but if it’s not short I do not think it would work
I have to say I although think it could be summarised better
You’re quite right: needs to be more simple and succinct. But I do think it important that the 2015 intake should commit not just to specific policy on taxation, but also to the justification for taxation.