Isaiah 65.17 – 25 and the #ParadisePapers

Yesterday I officiated at the patronal service of my church and the subsequent AGM. By the time we had cleared up it was too late for me to go to a special choral evensong at my cathedral, as I had hoped to, so I returned home, had an early meal and settled down to watch TV. I was shocked by the Panorama programme on the involvement of our monarch with all the others in the murky tax avoidance activities that we associate today with some ‘paradise’ islands. Having based my sermon that afternoon on what we imagine ‘saints’ to be and the nature of their heavenly home, based on Isaiah’s imaginings (65.17 – 25), Her Majesty is currently in a different place.

I thought back to my time as a policymaker in Her Majesty’s Inland Revenue, before it merged with HM Customs. I remembered the annual round of meetings with ‘the lobby’, seeking the views of ministers wrestling with tax governance, the consultations with the board’s solicitor or parliamentary counsel, before eventually committing ourselves to drafting the Finance Bill that we would have to steer through its various stages in Parliament before becoming law. Drafting law is a particular art, applying a particular language, always with a nervous eye on how a particular phrase might be interpreted by the Courts. We all wanted a fair tax system but sometimes a judge’s view of fairness came at a stretch, and consternation filled the corridors in Somerset House, where I worked in Georgian splendour in the New Wing completed in 1856. I understand that the budget of the HMRC and staffing levels are now below half they were in my time. I cannot imagine what working conditions must be like for a tax employee now.

Other thoughts came into my mind watching the programme. Earlier in the year we had invited the manager of a local foodbank to come and tell us about her work, as we had decided to tithe some of our income to help them. The Foodbank Network now supplies over a million people with three-day emergency food supplies to families, who are in crisis, not all of whom are unemployed. It is estimated that by the end of the decade a million children could be living in severe poverty, lacking heating and the basic needs of life that most of us take for granted. Our congregation received this information and more, in shocked silence, unlike the aggressive tabloid press and social media that tries to shout down these facts and place the blame with the people who find themselves in desperate circumstances.

I also remembered that, at the beginning of my civil service career, I had been employed in an employment exchange and my job was to suspend the unemployment benefits of those signing on who had either voluntarily left their employment or had been dismissed for misconduct. There was an appeals procedure and part of my job was to prepare the papers for the insurance officer to adjudicate on their claim. Meanwhile the claimant could ask for a B1 form to take to Social Security for some help to tide things over. I was technically part of the branch set up to uncover fraudulent claims. Back to the present, I tried to recall the ratio between benefit fraud and tax avoidance. The exact figure doesn’t come to mind but I seem to remember that it disappears behind a series of zeros.

Contrast all this with the lives of the rich and powerful who, aided by the lawyers, accountants and shell companies, are avoiding paying a fair share of this country’s tax revenues on an industrial scale, by using the lack of transparency of tax havens to hide away their cash, not necessarily illegally of course. As a tax employee I was taught to train my objective gaze on the legality of a transaction, not the morality. And yet, and yet.

Parliament allows many of us to ‘avoid’ our full liability by applying certain reliefs in a purposeful way but what about the wealthy taxpayers and their advisors who go against the grain of the legislation’s intention? Financial instruments are very complex and if a particular set of facts results in a lowering of the expectation of tax liability then who can argue? But when the avoidance of tax liability becomes ‘creative’, does the taxpayer stop to think, “Am I being fair to my tax paying neighbour?”. Or, “Am I being fair to the less fortunate person who is being impoverished because the government lacks the funds to provide a more generous underpinning of the common good?”

It seems many do not and I am left spluttering impotently at my TV screen. The best I can do, so far as rogue companies and businesses are concerned, is to deny them my albeit modest custom. The list grows daily. More of us should do the same, and public authorities should be more discriminating when awarding publicly funded contracts. Then we might see some redemptive policy action in the boardroom.

What is clear is that the current state of affairs cannot continue. Our tax system is broken. Public services are being devastated, harming us all, while individuals and companies avoid tax. We need a properly funded HMRC with powers of enforcement, a tightening of regulations over the advisors and bankers who for a fee smooth the path to a paradise of nil or nominal liability for their rich and the powerful clients. Otherwise, if we do not, very soon HMRC might become just the ‘Department of Revenue & Customs’.


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