Clever accounting has consequences

“We’d all do it if we could get away with it, wouldn’t we?”. Anyone who has ever discussed tax avoidance will have heard this phrase at some point. The underlying assumption is that we would all be siphoning our money off into foreign bolt-holes if only we had the fees to pay an effective accountant. And perhaps the cynics have a point. Even supposedly left-wing politicians are turning themselves into “companies” these days, in order to pay corporation tax at 20 per cent rather than personal income tax at 50 per cent. Pop stars are feeling the urge to “go and buy a gun and randomly open fire” when they see their tax bill because “state schools are shit”, and the country’s most famous Formula One driver upped sticks and left for tax-lite Switzerland long ago (under the guise of “safeguarding his privacy”, you understand).

It would seem that those who are able to are keeping what they can. And as for the rest of us, if we could, we would all be doing exactly the same.

It is often said of Thatcherism that it encouraged us to see greed as a virtue. It would be more accurate, however, to say that it very successfully smeared altruism as at best naive and at worst foolish. In 2012, it is not the fact that you are minimising the tax you pay that requires an apologetic disclaimer attached, but the fact that you were ever happy about paying tax in the first place. As U2 guitarist David Evans, aka “The Edge”, once rhetorically asked (presumably during time-out from telling the Irish government to give more aid to Africa) “who doesn’t want to be tax-efficient?”.

Continue reading at The Independent.