The above title comes from the Observer. As they say in today's paper:
A holy alliance of church groups and bishops is demanding that Gordon Brown closes legal loopholes used by the super-rich to avoid tax.
Christian Aid, Cafod, Church Action on Poverty and the Church Council for Monetary Justice have all this weekend issued separate statements urging the Chancellor to tackle what they see as a new frontier in an anti-poverty agenda.
It is suggested in the article that Rowan Williams, Archbishop of Canterbury is backing the calls, which relate to domicile laws in the UK, the whole ethics of tax avoidance, and the specific links between tax avoidance, tax evasion, tax havens and development.
As George Gelber head of public policy at Catholic aid agency Cafod said:
As finance ministers fret over reaching aid commitments they made at Gleneagles, they should also be focusing on how they have allowed millions of dollars to pour through tax havens, draining developing countries of far more resources than are going in as aid.
Part of my motivation for doing the work I do is my Christian faith; an issue I don't usually mention as I don't feel obliged to share it with others who have made their own choices. But, I can't help but say that explicit support from all these organisations, with all of whom I have worked, is personally very welcome.
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One thing this article also mentioned is the questionable morality of using “perfectly legal” means to minimise one’s tax bill.
Where do you draw the line?
Low salary / high dividend packages for the directors of small companies?
Super-rich folks choosing to live in Monaco and commute to the UK by plane?
When does tax avoidance become immoral?
M
Emily
The law has never been a guide to morality.
Tax avoidance beocmes immoral when there is a disconnect between the economic substance of a transaction and the way it is taxed.
On the basis of this both the situations you describe could be immoral. The latter is obviously an abuse. The former less so if the dividend is justified by the risk and the salary by the effort (a point I think HMRC would agree with – as might the ECJ).
The judgement is individual – but in my opinion when tax is paid in the wrong place at the wrong time and in the wrong amount then you can be sure you’ve crossed trhe line – and 99% of times just asking the question shows people have doubts on the issue they raise.
If that helps…..
Richard