Yesterday the Methodist Church called on the UK government and multinational businesses to end tax avoidance schemes which impoverish the vulnerable. It claims that as public services are being cut, the injustice of tax avoidance is becoming more acute.
The Methodist Conference heard that the Treasury admits to not collecting a record high of £42 billion in tax in the latest available figures. But independent analysts estimate the amount of lost tax to be much higher at £120 billion. The poorest 10% pay a much greater proportion of their income to the Government in tax than the wealthiest tenth (46% compared to 34%).
“Having a team of expensive lawyers doesn't absolve you of the moral responsibility to pay a fair level of tax,” said Paul Morrison, Public Issues Policy Adviser. “Taxation shouldn't be a game of strategy where you win by paying the least. Paying tax is a moral obligation — it is unacceptable to engage in complex financial arrangements in order to wriggle out of paying your fair share.”
Britain's 20 largest companies between them operate a vast network of over 1,000 offshore companies, potentially allowing the companies and their clients to avoid huge sums in tax.
The Methodist Church is adding its voice to the ever-growing number of organisations demanding tax justice and is supporting Christian Aid's tax campaign, which calls on the Government to end tax haven secrecy. The campaign also argues that multinational companies should be required to publish financial information such as the profits they make and the taxes they pay for each country in which they operate.
The Church is also supporting Church Action on Poverty's ‘Close the Gap' campaign, which highlights the impact of the ‘Tax Gap' in the UK.
“Every pound avoided in tax is a pound less to spend on childcare, social care, health or education,” said Niall Cooper, National Coordinator of Church Action on Poverty. “At a time when spending cuts are having a real and damaging impact on the lives of some of the poorest and most vulnerable people in the country, it is morally indefensible for some ofBritain's richest companies to be avoiding paying their fair share of UK taxes.”
The report, entitled Of Equal Value: Poverty and Inequality in the UK, adopted by the Conference, also asks all Methodists to examine their own practices to ensure they pay all the taxes they owe, both legally and morally.
I'm delighted to have made a small input into this process and warmly welcome this move by the Methodists.
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A copy of this needs to be posted to one very particular Methodist Local Preacher, a Mr R R Jeune of St Saviour, Jersey – better known as former Senator Reg Jeune, the man who turned Jersey into the tax haven it undoubtedly is.
@James
Is this the same Reg Jeune who put pressure on me (in my capacity as director of Jersey’s Retail Prices Index) to fiddle the figures because the inflation rate was inconveniently high, largely due to his policy of over stimulating Jersey’s economy by licensing new banks and other financial operators? I have fond memories of his attitude to economic advice: say what I want to hear or keep your trap shut!
John Christensen
That’d be him.
There are others who would confirm that attitude from his behaviour over them when they questioned his stance on development.
Take a look at this thread – the really interesting post is Nick Palmer’s at reply number 23…
The frightening thing is that I hear from others that he is still ‘lucid’ at 90, and there are certain bodies of which he is a member where he will not let go the reins…
Would that be the same Reg Jeune who used his political position as Senator – and President of the Policy & Resources Committee – to support the fast-track introduction of the Jersey Limited Liabilities Partnerships Law?
A law that was being introduced at the sole and express request of the law firm of which he was a founding partner – Mourant de Feu & Jeune – and for which he continued to work, and to have financial relationships with?
The same Reg Jeune – OBE – who was briefed by Ian James of Mourants on the supposed “need” for the fast-tracking of the drafting of the law – two weeks before it was considered by the Policy & Resources Committee – which Jeune Chaired – and at which he failed to declare an interest?
The same Methodist preacher – and big-time Freemason – who proceeded to make a speech in support of the passage of the law in the Jersey parliament – and, again, failed to declare an interest?
The same Reg Jeune who got his friend, Philip Bailhache, to have me illegally suspended from the Jersey parliament for six months – for exposing his conflicts of interest?
Yes – it is that Reg Jeune.
You just can’t make up this stuff.
Stuart
how far do you take this though, is putting money in an ISA to avoid tax morally unnacceptable?
No, that’s fine. That’s tax compliance
Tax compliance is seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes.
Tax avoidance is getting round the law
its a tricky line to draw richard im sure you would agree….
if a company wishes to sell a business it can either sell the trade and assets and pay tax on the gain, or it can sell the shares of its subsidiary which carries on the business and pay zero tax on the gain.
the end result is the same (i have sold a business) but the tax consequences are vast – imagine a huge PLC selling one of its businesses – millions in tax would be saved.
is the choice in this example morally unacceptable? would you still consider that compliance?
Tricky indeed
Both are tax compliant – and therefore in this case acceptable
The relief you refer to for corporate – a Brown creation – is clearly absurd though and should not exist
But that is a separate campaigning issue
The fact is the company is compliant when using it even if the result is wrong
i think it exists as most of the other EU countries have something similar – if we didnt have it then the argument would be that we would be “uncompetitive” in terms of attracting investment with all the benefits that brings etc
having said that – i think we have some of the lowest headline corporate tax rates in the EU (or if not currently then we will over the next few years)
Paul Morrison says “it is unacceptable to engage in complex financial arrangements in order to wriggle out of paying your fair share” but again what is a “complex financial arrangement”? is moving a trade into a new company to sell it to get the exemption within this definition? Is borrowing from an overseas group company rather than a bank within the definition?
The EU constitution sets out freedom of movement of capital etc so if a Luxembourg or Dutch company is used to acquire something rather than the UK, then are we to rule that as morally unacceptable?
The trouble with international finance and tax rules is that they are inherently so complex that they are difficult to categorise in terms of whether something is morally wrong or not.