Those who know me and those who read this blog will know I'm no fan of aggressive tax avoidance. I'm also critical of those in the media whose attempts to comment on tax issues reveal a woeful lack of knowledge and understanding of our tax system.
The protests outside big companies' stores around the country derive from this invitation set out on UKuncut's website:
"At the same time as making massive cuts to public services, this government is letting rich individuals and corporations avoid billions of pounds of tax. Join UK Uncut’s Big Society Revenue & Customs (BSRC) and become part of an army of citizen volunteers determined to make wealthy tax avoiders pay."
I do understand the need to simplify complex issues so that these can be understood by the man in the street. Equally I deplore the way that some people use the need for simplification to manipulate their readers and viewers. It seems to me that this is part of the background to the recent tax protests.
Part of me really wants to admire what UKuncut has achieved in recent weeks. Leaving aside the anarchists who have joined in, I'm in awe of the level of genuine support UKuncut have secured for their protests. In this regard I heartily reccommend a recent article by Alan Finlayson writing on The philosophical significance of UK-Uncut.
BUT I'm also saddened by the confusion caused by conflating different issues. And also by what some might see as cynical manipulation of public anger. In this regard I have identified 8 fallacies that seem to me to undermine the tax protests.
1 - Who is to blame for the UK's complex tax system?
It's long been complicated but it was Labour who layered our tax system with complexity upon complexity over a 13 year period in office. It was Gordon Brown who resisted calls for effective consultation - and instead rushed new tax rules into law with loads of anomalies and gaps. The Coalition Government have promised a new approach and the evidence todate is that they will do as they have promised.
2 - Who let the Big Companies reduce their tax bills?
The unpaid taxes that UKuncut complain about relate to the 13 years that Labour were in power. You can't blame the Coalition Government for tax avoided before they were elected.
3 - The Coaltion Government are taking action to reduce aggressive corporate tax avoidance
The Coalition Government has announced numerous anti-avoidance tax rules to further reduce the opportunities for aggressive tax avoidance. They aren't ignoring the issue.
4 - Who is the bad guy here?
Either UKuncut is protesting about the Coaltion Government's cuts or about tax avoidance being allowed to continue. Either way the complaint is against the Government rather than against the workers and customers of the stores being attacked by the protests.
5 - There is a degree of naivity at stake here - especially by protesters who don't pay tax
Only a minority of the protesting students have ever paid tax on their earnings. Most employees who pay tax through the PAYE system are understandably frustrated at how much of their pay goes in tax. They want to pay less. If they could, they would. The tax rules for employees make this more difficult than for the self employed and for business owners. But it's still a natural reaction. Those who've not paid tax to date seem not to have conisdered what their reaction will be to the payment of tax.
6 - And there are clear double standards too
Almost every self employed person and small business operator in the UK expects their accountant or tax adviser to help them pay less tax than they otherwise would do so. I wrote a piece recently: Doesn't everyone try to avoid or evade taxes? Common requests are "What can I do to pay less tax?" "What can you do to reduce my tax bill?" and so on. As long as such tax avoidance is within the rules they break no laws. Why should big businesses be held to a different standard?
7 - What about tax avoidance by footballers and football clubs?
Not only do top players receive outrageously high salaries but their contracts invariably entitle them to payments for 'image rights'. Substantial amounts of tax are avoided (legally - most of the time) but no one seems to care, except HMRC who regularly petition Governments (old and new) to change the rules to limit the capacity for such tax avoidance. However it seems no one wants to protest outside football clubs though to make these "wealthy tax avoiders pay".
8 - No one pays tax unless it is due
If an individual or a company arranges their affairs so that less tax is payable than would otherwise be the case, that is all they will pay. Paying more than this isn't an option. If there was a way in which you could change things and be liable to pay extra tax in future years, it's likely to take some time to make the necessary changes to your business structure etc. Simply stated, no one should be expected to make excessive payments to the taxman. And even if they did, HMRC's computers would simply show such sums as overpayments and then refund them at a later date!