3 simple steps to reduce tax avoidance

With only weeks to the election, voters should be clear on at least one issue: this Tory-dominated coalition has never been serious about dealing with what Margaret Hodge has frequently called the  'Tax avoidance industry'.

    Of course, there has been an abundance of the usual heart-rending rhetoric from the Tories, Cameron and Osborne in particular; the public has been inundated with descriptions of how vile the practice is, with Osborne`s "morally repugnant" taking some beating. Then there`s the tax avoiding companies, with the focus presumably on Starbucks, being told by Cameroñ that it`s time to 'Smell the coffee'! Budget after budget has introduced new coalition measures to reduce the huge total of 

£35 billion being deprived of the Treasury each year by tax avoidance, with the latest, the so-called 'Google tax' estimated to raise a measly £570million by 2019!

Clearly,  when it comes to tax avoidance, it`s just another example of the Tories taking us for mugs. Should the election set the them up for another five years of government, there is absolutely no reason to expect anything other  than a bumper time for the avoiders, be they rich individuals, profit-hiding companies, or the accounting firms making billions out of selling avoidance schemes.

  However, a new government could easily take three simple steps to make the problem both more manaģeable and mòre tŕansparent.

   A new goveŕnment depàrtment focussed entirely on tax matters, with a minister reporting back to the Commons and the Cabinet on a weekly basis, would at least indicate serious intent. A popular choice for minister would obviously be Hodge, whilst a further sensible appointment would be the tax expert, Richard Murphy, in an advisory capacity. 

   This Ministry of Tax Affairs would not only be on top of all Treasury figures realating to tax, it would have responsibility for all actions taken by HMRC, the agency in charge of tax collecting. Any of the `sweetheart deals` whereby companies and individuals reach agreement on a payment of a lump sum, rather than pay the full amount avoided over years, would first have to be agreed by the Minister, with all the necessary disclosure and publicity. Similarly, all companies avoiding tax would gain due publicity in parliamentary discussion, and this could act as some further deterrent. The more the public is made aware of the scale of the companies` avoidance, the more likely they are to take avoidance measures of their own, such as avoiding making purchases from them!

    The Ministry could also develop further Murphy`s idea of a Fair Tax Award, for companies which regularly pay the correct amount of corporate tàx, which they can use for self-promotion.

 A third step certainly never reaches the realms of rocket-science, but it seems, nevertheless, to have been too difficult for the coalition to comprehend: the majority of the electorate do not agree with tax avoidance, knowing the contribution tax plays to a civilised society, so they would certainly support a government which refused to award any contracts to corporations known for their tax avoidance practices. Companies refusing to pay a living wage to all employees should suffer the same fate!

  Three simple steps which could transform the way tax is not only collected but perceived by the public; it is not a matter for accounting firms to decide how much revenue is collected by the Treasury, and the sooner governments take full responsibility, the better.