Editorial

A 'Fair Share' of Tax

At the recent Public Accounts Committee (PAC) meeting on tax avoidance, it was the turn of Google and HM Revenue & Customs (HMRC) to be in the firing line. HMRC were represented by Lin Homer, Chief Executive and Permanent Secretary and Jim Harra, Director General, Business Tax.

The meeting (all 3 hours of it!) can be viewed on the Parliament TV website: HOC Public Accounts Committee Thursday 16 March. It makes for very interesting (and, some would say, entertaining!) viewing.

At the end of the day, HMRC's role is to collect tax that is legally, not morally, due. In other words, not what the PAC or anyone else considers to be a 'fair share' of tax.

With all the rumours of 'sweetheart deals' between HMRC and some of the larger corporations, only HMRC will probably know for certain (notwithstanding the perceived 'tax gap') whether HMRC is fulfilling the basic function of collecting all the tax that is legally due. But that's another story.

The whole tax avoidance debate has been worthwhile and, to a large extent, necessary. Why? Because it has shaken the tree of tax avoidance in the UK in a permanent and positive way. However, in my view there's a danger that if the debate drags on for too long, any positive momentum (and also the public's interest) will start to wane.

It's now time for the moral crusade to cease. If the PAC thinks that the likes of Google are not paying their fair share of tax, it must stop the talking and start pressing the Government for changes in the UK's tax laws.

Of course, if they're successful in doing that, there's a major risk of the UK losing the business of large multinationals. That will probably cost the Government far more in lost revenue than the tax that the PAC would apparently like those businesses to pay.

It's a fine balance. As the saying goes, "be careful what you wish for".

Best wishes,

Mark McLaughlin 

Managing Editor