31 October 2011
Churches ask Chancellor of the Exchequer to tackle tax avoidance
Representatives from a range of Christian denominations and
charities will hand over a letter to the Chancellor today (October
31) asking the Government to tackle tax avoidance in order to Close
The Gap between rich and poor in the UK. There will be a media
photocall at 12 noon at 1 Horse Guards Road, SW1A 2HQ when the
delegation, which will include Anglican, Catholic and Methodist
representatives, deliver the letter to the Chancellor.
The Twitter hashtag for the campaign is #fairtaxes.
The text of the letter to the Chancellor follows:
Dear Chancellor,
We are writing as senior representatives of a range of Christian
denominations and charities who have come together out of a shared
concern about the urgent need to Close the Gap between rich and
poor in the UK.
As the Institute for Fiscal Studies has shown, not only is the gap
between rich and poor in the UK higher than at any point for at
least the last fifty years, the numbers of people in both absolute
and relative poverty are projected to increase substantially in the
coming years. It is our experience that this level of inequality is
tearing at the fabric of society. The consequence is that
increasing numbers of individuals and communities feel that they
have no stake in wider society and have no realistic hope of their
children bettering themselves.
We welcome the Coalition Government's commitment to protect the
poorest and most vulnerable from the impact of the spending cuts,
but we are concerned that the cuts are nevertheless having a severe
impact on many of the people we work with on a daily basis. In this
climate, as Churches, Christian organisations and individual
Christians, we are increasingly concerned about the impact that tax
avoidance and tax evasion are having on the public purse. In an age
of austerity and spending cuts, we believe that tax avoidance is
morally unacceptable and tax evasion has to be seriously addressed.
Tackling these issues will reduce the need for further damaging
cuts in public spending.
Tax evasion and avoidance is estimated by the Treasury to cost the
UK purse at least £35 billion annually. Others estimate the number
to be substantially higher. This is nearly 9% of UK tax revenue and
the efficient collection of this revenue would lessen the demand to
cut social and welfare expenditure which is hurting the poorest in
our communities so much. Treasury estimates also suggest that those
who are avoiding paying their contribution are mainly wealthy
individuals and corporations, so the recouping of this money would
not harm the poorest and most vulnerable.
We welcome existing initiatives on the part of Government to reduce
levels of tax avoidance, but would urge that you take stronger and
more decisive action to crack down on unjustifiable tax avoidance
measures.
In particular, we would urge you to consider three specific
measures.
A first, simple step would be to end the anomaly that when goods
are bought by internet or mail order from a company based in the UK
they attract VAT, but if they are bought from some off shore
territories they are entirely tax free. A tax avoiding industry has
sprung up, routing purchases though these territories purely to
avoid tax. The £130 million that this costs the UK exchequer is
small in comparison to the total loss, but for instance would be
enough to largely protect the Sure Start programme and children's
services from the 11% cut in the Early Years Intervention
Grant.
Secondly, we would urge you not to proceed with the draft proposals
on Controlled Foreign Companies announced on 30 June. Whilst
advocates of the policy claim that it will increase the UK's
'business competitiveness,' what it actually offers is big
incentives for companies to shift their financial operations to
'off-shore' tax havens as a means of avoiding paying UK taxes. Even
on the Treasury's own estimates, this will cost £840 million in
lost taxes a year.
Lastly, we would also urge you to seriously consider the
introduction of a General Anti-Avoidance Rule into UK domestic law.
Whilst we all await the outcome of the Aaronson inquiry, due to
report today, we are convinced that such legislation could be
framed to meet the objectives of deterring and countering tax
avoidance in a fair way, whilst at the same time providing
certainty for business.
Yours sincerely, Rt Rev David Walker Bishop of Dudley
Gwen Shaffer Co-clerk of Quaker Peace and Social Witness Central
Committee
The Revd Leo Osborn The President of the Methodist Conference Revd
Richard Mortimer Deputy General Secretary United Reformed
Church
Niall Cooper National Coordinator Church Action on Poverty
Sr Maureen Tinkler Director Vincentians in Partnership
Anne Peacey Chair of National Justice and Peace Network
Alison Gelder Chief Executive Housing Justice
The Revd Jonathan Edwards General Secretary The Baptist Union of
Great Britain