TAC0008

Written evidence submitted by Church Action for Tax Justice

 

Church Action for Tax Justice (www.catj.org.uk) is a programme of the Ecumenical Council for Corporate Responsibility, a registered UK charity.

 

Any tax system needs to achieve multiple objectives. It must raise sufficient revenue and not harm economic growth. It must be simple, transparent and able to be administered with relative ease by both officials and taxpayers. However, above all else, it must be fair and be perceived to be fair. As such, there is both an objective and subjective dimension to the issue of tax fairness and the current UK tax system is neither.

 

And fairness matters. One of the reasons why the NHS is loved so much in the UK is precisely because it is perceived to be fair – the same healthcare provided for free at the point of delivery.

 

Since the financial crisis of 2008 at least, successive governments have however prioritised revenue raising and the theoretical pursuit of growth at the expense of transparency, simplicity, administrative ease and in particular fairness. It is time to redress that balance.

 

The coronavirus has only made this situation worse. It has exacerbated existing inequalities and it has revealed new ones. For this reason, any reform of the UK tax system has a moral and political imperative to prioritise the issue of fairness above all else.

 

Consider the following:

What does this mean in practice?
It means that the average cleaner in the UK is paying more in tax as a proportion of income than the average CEO whose office is being cleaned. It means the average security guard pays a higher rate of tax than the average executive whose building they are keeping safe. This is fundamentally unfair – and the British public think so too.

We commissioned a survey of over 1,000 working age adults this year. Right across the political spectrum, over 80% of the public thought that tax avoidance (let alone evasion) was morally wrong. This belief was actually even higher among Conservative than Labour voters, and it was especially high among older age groups. In response to a question about why it was morally wrong, the issue of ‘fairness’ came top of their list with 75% stating that we all need to pay our fair share.

In light of this, we would argue that any reforms to the tax system in light of coronavirus must prioritise the issue of fairness both in its subjective (do the public perceive it to be fair) and objective senses (does the system actually promote greater equality – is it progressive?).
 
Specifically, we would call for the following measures to be implemented:

While tax must generate revenue, and while we recognise that it must not harm economic growth – the current system is embedding a culture of unfairness that the British public will not tolerate for much longer. Ensuring a fair tax system must be the priority for any reforms and we have set out some headlines as to how this could be done.

 

Dr Justin Thacker

Director

Church Action for Tax Justice

 

August 2020