Tax ‘em till the pips squeak!

One thing that has become clear during the economic downturn in the UK, is that there is now a political consensus around the fact that savage cuts to public spending are going to happen whomever wins the election.

All of the main stream political parties seem resolute that the raising of taxes is not an option, presumably considered politically impossible for anyone to countenance.

One thing I cannot get my head around though is why, oh why, do we not do more to collect the tax we are owed? I am talking here specifically about corporate tax, and tax from the super rich.

The reality is huge amounts of money is diverted away form public coffers, due to “Tax Avoidance”. This is people using clever tricks, and legal loopholes, to avoid paying their fair share. This is not technically illegal.

I have attached a report from the TUC which gives their estimate of how much money is lost to public coffers form tax avoidance every year. Now I would ask any readers who are drinking from a cup to put it down now.

The reason being is that the figure the TUC estimate we lose every year, is Twenty Five Billion Pounds! A really quite astonishing figure, and we lose that every year. Now to put that in perspective we lose from benefit fraud around about 600-700 million pounds a year.

Now I think benefit fraud is of course a bad thing, but if you read the press, or watched all the TV adverts I am sure you would imagine these figures were the other way around. The people really stealing from us, in a way that costs us all, are those not paying their fair share.

Now I have heard loads of reasons why this cant be tackled, but I think I have come up with a plan for dealing with this. So here we go.

Pass a law that sets a principal that it is a criminal offence for companies to pay less than their fair share. Make it so that the board of directors are ultimately responsible and will serve jail time if it is found they presided over a regime designed to pay less than their fair share, even if they were not directly involved.
Make this law also apply to those in the accountancy industry and consultancy industry. So that if a company pays less than their fair share the accountants AND the board will go to prison.
Have in the law a clause that states that when a company has been found guilty of not paying their fair share they are prevented from paying any share dividend for 3 years (a bit of shareholder pressure should go a long way to making companies pay up!)
It is often said that HMRC will never be able to keep up with all the wheezes the accountants come up with. So lets have in the law a “statutory instrument” (where a law subcontracts out the finer details to a committee, quango or NGO) that allows the HMRC to retrospectively outlaw tax avoidance schemes where they let a company pay less than their fair share.

Now this might all sound a little draconian. But I really don’t think it is, I mean lets face it none of this would apply to any company paying their fair share would it? A company that makes 100 million pounds profit, and pays 30 million in tax would never fall foul of this stuff.

It would only ever effect those not pulling their weight and chipping in. Us workers are mostly on PAYE, we automatically pay our fair share. All this would do would be to make it easier, and less risky, to companies to just play fair and pay their bit.

Surely that is something we can all get behind!