The last 24 hours has seen an extraordinarily personal attack on Jimmy Carr, who has apparently availed himself of an entirely legal tax avoidance scheme to minimise the amount of income tax that he is required to pay. No-one has suggested he has done anything against the law, but politicians and a myriad of other commentators, including the Prime Minister himself, have lambasted Mr Carr for what they have labelled a "moral failure" on his part to pay what he should.
If indeed the Government believes that such schemes are morally wrong, then it should legislate to prevent it, but the metaphorical public flogging of someone who has, presumably, taken professional advice and followed it to ensure that he stays within the existing rules, seems to me to be to be a peculiarly unpalatable form of bullying.
But quite aside from this, David Cameron's comments seem to me to be rank with hypocrisy given that his condemnation of Mr Carr's tax avoidance came less than 24 hours after he apparently sent a message to wealthy French residents that the UK would welcome them with open arms (and permit them to avail themselves of the UK's very generous non-dom tax rules) if they wished to relocate to the UK to avoid having to pay the new higher top rates of income tax being implemented in France. Do they, under David Cameron's logic, not have a "moral obligation" to the French people to pay tax to the French exchequer, and not to relocate for tax purposes?
Surely Mr Cameron must see the duplicity in his position.
This blog is not the place to argue the case regarding where the line should be between tax evasion and tax avoidance, or indeed to pontificate on the morality of trying to lessen one's tax burden at all - that is a lengthy and complex debate which requires much more in-depth analysis than is permitted here. But at the very least there should be a consistent position. The UK government cannot lambast Islands such as Jersey for facilitating tax planning by individuals (and vilify the individuals who avail themselves of the opportunities) when it offers (and indeed encourages) methods of avoiding tax for those who live in the UK, but were not born there.
Or are we perhaps to draw the conclusion that whilst it is immoral to avoid paying money to the UK Exchequer, to do the same to a "foreign" Exchequer is perfectly legitimate?
I am in total agreement with these comments. There is a level of media attention around what is usually legitimate and appropriate planning which is bordering on hysteria. It is perhaps inevitable that Governments will need to be seen to react to such "public" outrage and advisors and finance centres may face the prospect of adapting to a new reality built around morality rather than legality.
ReplyDeleteNicola: the hypocrisy point is well made: there could not be a greater irony than the tax avoider George Osborne lecturing us on the immorality of tax avoidance! But there are many of us who have consistently opposed and refused to engage in tax avoidance, over many years, to our own personal (significant) cost because it is morally wrong to do so.
ReplyDeleteWe cannot determine our morality through the law. What is legal may well be immoral (think of slavery 250 years ago for eg. Or the exclusion of women from political participation 100 years ago). The tax laws are never going to be able catch up with those who think "taxes are for the little people". So yes: Jimmy Carr may have availed himself of a 'perfectly legal tax avoidance scheme'. But it is profoundly immoral to do so. And I note that his apology is evidentially just 'sorry I was caught'. If it were more than that then a fat cheque would be on it's way to the exchequer. But it isn't - so we know definitively that he isn't sorry at all.
This is all just very easy: if you earn, then pay your taxes. If you don't then get off my pavements, my roads, don't ever call my police, don't mix in the society that I pay to make safe and legislate with my taxes. Those who avoid tax negate their rights to participate in the society paid for by the rest of us. We all have moral agency and can make personal moral decisions.
And it is particularly galling to see how many continue to fail to do so, shafting the country royally while it is on its knees. We can find many reasons for the current economic situation: but tax avoidance remains morally repugnant - and has surely contributed its fair share to our fiscal problems.
Our offshore jurisdictions need to get out of bed on this one and stop engaging this type of business.
Cheers, Jim