Widespread anger at millionaires who fail to pay the required portion of their income in tax and multinational companies which use complex networks of overseas subsidiaries to keep billions of pounds out of reach of the revenue authorities has so far resulted in little effective action being taken against such scams.
The problem is that they are not illegal: examples of tax avoidance rather than tax evasion. Closing the loopholes therefore requires changing the regulations. Naming and shaming those who fail to pay their dues and go to considerable trouble and expense to reduce their bills is therefore the fastest and most efficient weapon available.
In the case of the comedian Jimmy Carr, who sheltered £3.3 million in an offshore scheme, the public opprobrium resulted in an eventual apology. However, thousands of other wealthy individuals use similar legal but highly unethical accounting schemes to reduce their tax liability, sometimes to as little as 1%, costing the country about £5 billion a year.
Margaret Hodge, the robust and tenacious chairwoman of the House of Commons Public Accounts Committee, has taken a positive step towards shining some much-needed light on the morass of complex tax avoidance schemes by calling for HMRC to publicly name and shame those who sell these under-the-radar ways of reducing liability as well as the individuals who use them.
As she points out, the schemes deliberately abuse the law knowing it will take time for HMRC to change the regulations and shut them down. It is a game of cat and mouse in which HMRC and the UK taxpayer are always the losers and the winners are never penalised.
This would be unacceptable at any time but when services are being cut, public outrage ought to force action.
In the case of Starbucks, a consumer boycott resulted in an offer to make a £10m payment. Other global companies including Google and Amazon are more difficult for people to deprive of their custom but finance ministers at the G20 last weekend agreed to carry out a major investigation into global corporate tax avoidance to find a way of bringing about international regulation.
That will be difficult but must be done. Time must also be called on wealthy individuals and their financial magicians in the UK. Those who deliberately cheat the system cannot expect to hide. If they believe their actions are defensible, they must justify why they should not pay their share towards all the elements which make up a civilised society.
When taxpayers who earn a fraction of the dodgers' income pay their share towards the common good, the naming, shaming and penalising of the rich who abnegate their responsibility is long overdue. There is not only a clear moral case for holding them to account. The financial one is also compelling.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article