My suggestion that the next, and biggest, issue to be addressed to deliver tax justice in the UK is tax evasion has already appeared to have had a welcome reception amongst tax professionals. There is also very obvious agreement that there can be no success on this issue without more resources being dedicated to tackling tax evasion, which would require a considerable reversal of the trajectory of travel in HMRC's business plan and minister's expectations of it. When I talk to many people with no obvious interest in politics tackling this abuse also appears to be popular. So what is the problem in making progress?
As I explain in my report for PCS, one of the biggest problems appears to me to be a lack of political will on politicians part to tackle this issue. The absence of this will has, to some extent, always baffled me. After all, politicians want to be elected to have power and to keep people happy through the use of that power so that they might be re-elected. You would have thought that in that case firstly collecting all the tax owing delivers power, secondly it stops a majority who are being cheated from being annoyed and third it maximises resource delivery by government at lowest overall cost (as well as creating a fair and level playing field on which all business can operate) and so it has to be a win: win.
And yet when I talk to some MPs (and not all from the same parties) I sense an enormous reluctance to take on what they see as 'white van man' (as the tax evader is almost always, and inappropriately I am quite sure in the majority of cases, described). There is a widespread fear that to talk about tax evasion is a vote loser. Implicitly that, of course, also acknowledges how widespread many realise the problem to be.
The outcome is that we have an apparent tacit agreement between politicians and tax evaders that the actions of the latter will be ignored, which is also, of course, a good explanation for HMRC doing the same.
I think this is ludicrous and believe that is this is the case then the time has come when a cross party platform on this issue should be created. Such cross party consensus exists on many issues, implicitly or explicitly (we will see it in action today on the perceived need to bomb ISIS). Why isn't it possible for all main parties to pledge to tackle tax abuse?
There is after all, broad consensus on the need to tackle other crime, even if there are some policy differences on occasion on how to then treat the offender. So why isn't there cross party consensus on the need to fund HMRC to beat tax crime? And given that doing so would provide the funds to help beat the deficit that is apparently the highest order issue on most politician's agenda, why hasn't this happened to date?
I have no idea how much a war will cost. But, however much it is, investing in HMRC would pay for it. I am totally confident of that. In that case surely the time has come for all parties to agree that a new consensus be built on this issue?
And if not, why not? Because if it can't be created what does that say of politicians thinking on tax evasion? I can't imagine any of them want to be seen condoning it, so why not join together to make sure that there is no electoral advantage from silence on this issue?
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The authorities know that tax evasion, criminal activity, is happening. They do nothing about it. Doesn’t that make them accessories after the fact? (Or is it now called ‘aiding an offender’?)
You know that answer to that, and so do I
Well followed through from yesterday’s blog, Richard. And framing it as something that should be a cross party issue is both the way forward, but also touches on why it hasn’t and probably won’t happen. That’s because in one form or another tax evasion is an opportunity and a benefit for each of the “classes” in our society, and therefore the political parties that are regarded as protecting or advancing their interests, and thus gaining their support at election time. Nevertheless, if Labour were to announce they were putting more resources in HMRC (as they should) which would lead to a crack down on cash in hand payments for goods and services (amongst other things) it would be interesting to see how The Sun would handle the story, given many of the “white van men” that it is generally believed are keen on cash in hand also happen to represent a significant chunk of the readership of The Sun.
Indeed
The majority of politicians in all parties are a)tax avoiders as has been shown; b) in the sway of large multi-national corporations; note the sweetheart deals (Barclays/ GS to name but 2). Pressure on these will see capital flight etc. White van man/ immigrant cleaners to the wealthy etc. This avoidance is a tiny fraction of the total.
Remember a former (not too long ago) German economics minister–Oscar de la Fontaine ‘ there can be no European economic integration without tax harmonisation’. Two weeks later he was sacked! due to pressure from the multi-nationals. This, the main reason for a lack of political will to crack down on tax evasion.
Evasion is the big issue in truth right across Europe
While I agree with Richard that more SHOULD be done to tackle, the realistic position politically is that it would be a vote loser unless it was possible first to have tangible, undeniable evidence that corporate tax avoidance has been significantly reduced.
Otherwise, if (say) the Conservatives made a commitment to tackle tax evasion, they would be open to an easy (if lazy) attack that they are going after the “man on the street” while leaving the corporate world alone. Not that this argument actually makes much sense, but that’s never stopped any previous political attack.
There is no way I say this should replace tackling tax avoidance
This is an addition to that
As, I believe, they say in Italy
“a fish rots from the head down”.
The majority of people need to believe that their ‘superiors’ also obey the law for them to obey it. Once it is seen as easily transgressed it will be.
“From now on, I’m only thinking of myself”
“But Yossarian. that’s terrible, suppose everyone thought that way?”
“Then I’d be a damn fool to think any other way wouldn’t I?”