Decision Time: The tax avoidance issue

 
Policemen outside Fortnum and Mason In March police arrested 145 people for staging a sit-in at London's luxury food store Fortnum and Mason

With the country facing a squeeze, with tax rising and spending being cut, the demand that companies and the rich should pay what they owe grows louder and louder.

You don't have to be one of those who occupied Topshop or Fortnum and Mason to wonder why the taxman can't get his hands on billions of pounds shielded by offshore schemes and onshore wheezes.

But on the other hand, you may worry whether Britain really can afford to increase the taxes paid by those who create wealth and jobs and who are, after all, minimising their tax bills quite legally.

Could the final cost of a crackdown on tax avoidance be higher than the bill of letting it go on?

A new series of Decision Time on Radio 4 examines decisions that could face any government at this time - whatever its political colour, and examines how and whether an idea might make its way through the corridors of Whitehall and the chambers of Westminster.

Tonight, a former head of the Inland Revenue, a campaigner against tax avoidance and a champion of business discuss whether ministers could and should tackle tax avoidance.

The programme commissioned a poll on the subject which reveals that in general, people (84%) think that the government should crack down on tax avoidance in the UK.

Even if this causes unemployment or companies to leave the UK, the majority (60%) still believe the government should crack down on this practice.

However, opinion is split over the role of companies in minimising tax, through lawful means, in order to maximise returns to their stakeholders - highlighting the tension that tax avoidance brings for companies.

Decision Time is on BBC Radio 4 at 2000 GMT and will available online after broadcast.

 
Nick Robinson, Political editor Article written by Nick Robinson Nick Robinson Political editor

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  • Comment number 93.

    This comment was removed because the moderators found it broke the house rules. Explain.

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    Comment number 92.

    The easiest way to crack down on tax avoidance is for govt to write better legislation. Tax avoidance is simply people taking advantage of tax legislation in a way (or in amount) not anticipated by politicians and HMRC.

    Politicians have made tax so complex that unanticipated effects are inevitable. Do not blame the tax payer for this

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    Comment number 91.

    Haye@ 89
    You can crack down on tax avoidance by tightening up the legislation.

    I don't think anyone has suggested punishing people who legally avoid tax, have they?

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    Comment number 90.

    JH66 @ 81 There's no watertight definition because it isn't a precise term. But don't fall into the trap of thinking that a concept is invalid just because it can't be precisely defined. Anyway, to me, tax avoidance means reducing tax liability by means which are currently not illegal but which might be viewed as a misuse (or more neutrally an unforeseen use) of the existing tax regulations. OK?

  • rate this
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    Comment number 89.

    You can't "crack down" on tax avoidance. It is simply impossible to punish people for not breaking the law.

    You can either create more legislation to close the avoidance loopholes. Or you can make avoidance less attractive in other ways.

    But lets consign to the dustbin this idea so many seem to have that avoidance should be punished. Its illogical and ignorant.

 

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