Energy giant Shell has posted record profits of £32 billion, the highest in the company’s 115 year history.
These obscene profits, double what they posted last year, are largely down to soaring oil and gas prices following the Russian invasion of Ukraine.
The profits will boost the bank accounts of Shell's shareholders – Shell handed out £21 billion to shareholders in 2022 – while families across the UK struggle to pay their energy bills.
Last year we helped push the government to introduce a windfall tax on oil and gas companies. But it didn’t go far enough then and it doesn’t now.
The government must increase the rate of the windfall tax and claw back more of these profits. They must close loopholes used by oil and gas companies to reduce the tax they pay.
And, as our friends at the IPPR and Common Wealth think tanks have said, the government should tax shareholder returns at a much greater rate.
Former Chancellor Nadhim Zahawi was finally sacked on Sunday over his tax affairs. He was found to have breached the Ministerial Code.
This is a victory for tax campaigners. Those in public office must have the highest standards when it comes to their own personal tax affairs.
An ongoing problem is that HMRC is under-resourced. As I mentioned in last week’s newsletter, this may have led to them failing to collect billions of pounds of tax owed.
There is a broader problem - many super rich people will use any and all means to avoid paying tax, as I wrote in a comment piece for The Guardian last week. HMRC needs the tools necessary to investigate them.
We will continue to campaign for HMRC to be given more resources, so they can properly enforce our tax laws – and scrutinise the tax affairs of the rich and powerful.
Illicit offshore wealth exposed
Now for some good news. Owners of UK property will no longer be able to hide their identities behind overseas shell companies – long a tactic used to conceal what is estimated to be £100bn of illicit financing flowing through the UK.
A new property register forces everyone who owns a UK property through an offshore shell company to come forward and identify themselves publicly. The deadline for registering was Tuesday.
Unfortunately up to 13,000 offshore companies failed to meet the deadline. But many did, and thousands of offshore owners have been identified for the first time on the register.
This transparency will make it much easier for our tax authorities, journalists and campaigners to track the wealth of the mega rich.
The register was established as part of the Economic Crime Act, which we tirelessly campaigned for, alongside our allies. You helped push this over the line, with almost 120,000 signing our petition.
It’s been a busy week for tax campaigners. It was reported that the Conservative party chairman, Nadhim Zahawi, has paid a £1 million penalty to HMRC for being ‘careless’ with his taxes.
Zahawi initially didn’t pay the right amount of tax on £27 million of income from YouGov, the polling company he founded. It’s been suggested he simply forgot. This stretches credulity, as our Executive Director Robert Palmer told GB News. Zahawi describes his actions as ‘careless’.
We all have to pay tax. When rich individuals and wealthy companies don’t fully comply, it dents confidence in the system for everyone else – and takes money away from our public services.
It’s staggering to believe that someone who was briefly Chancellor of the Exchequer, and in charge of our tax system, failed to pay his own taxes properly. It’s untenable that he remains in public office. Zahawi must go.
As Robert said on Sky News, the episode raises broader questions about how the UK’s tax authority, HMRC, operates.
The Zahawi case came to prominence following the relentless digging and media work of former tax lawyer Dan Neidle.
This case raises serious questions about HMRC’s own ability to investigate complex tax cases. HMRC’s problems go beyond Zahawi. The department lacks the tools and resources it needs to do its job properly.
Parliament’s spending watchdog said two weeks ago that there was a £42 billion black hole of unpaid taxes, in part because HMRC didn’t have the staff to enforce compliance.
HMRC staff who usually deal with tax dodging have been moved to work on Covid and Brexit in recent years, making the problem worse.
HMRC staff are under such a strain that they have announced they are balloting to go on strike. We're fully behind the over-stretched tax inspectors fighting for better pay and conditions.
These issues with HMRC are explored in greater detail today in a Guardian comment piece Robert wrote. In the piece he also sketched out the unfair – but legal – routes that are open to wealthy individuals and companies to reduce their tax bills.
In order to have a fair and effective tax system – that stops the rich and powerful playing by a different set of rules – HMRC needs to be properly resourced, as Robert told Julia Hartley Brewer on Talk TV.
HMRC staff are worth their weight in gold when it comes to bringing in tax. The government must invest more in the tax authority – and such investment would easily pay for itself through improved tax receipts. It’s an easy decision.
As Robert said on Talk TV, there are grounds for optimism. Over the last ten years governments around the world have made some progress on cracking down on tax dodging, in part due to pressure from tax justice campaigners. There’s so much more to do, but it is possible to change things.
News that the Prime Minister has ordered an ethics investigation into the tax affairs of ex Chancellor Nadhim Zahawi, is welcome, but will come too late for the public.
Zahawi has reportedly paid a penalty to HMRC of £1m as part of a tax settlement over allegations that he failed to pay the correct amount of tax.
But the damage to public confidence caused by the scandal has already been done.
Tax Justice UK Executive Director, Robert Palmer, said:
“Clearly it’s unsustainable for someone in these circumstances to continue to attend cabinet. Zahawi has to go.
“But the damage has already been done. At this time of year millions of people are filing their own taxes.
“The vast majority of people don’t have access to complicated means of slashing their tax bill. We need a wholesale reform to ensure that everyone, especially those with wealth, pay their fair share.”
The super rich just keep getting richer. And calls for wealth taxes are growing louder.
Since the start of the Covid pandemic, the world’s richest 1% have increased their wealth by a staggering £21 trillion – enough to lift 2 billion people out of poverty. That’s the shocking finding of a new report from Oxfam.
The report showed that the UK’s richest 1% are now worth £2.8 trillion, making them wealthier than two thirds of the UK population combined, as the Mail reported.
Rise in extreme poverty
Not only are the rich getting richer, but the poor are getting poorer.
Oxfam said the rise in extreme wealth was being accompanied by a rise in extreme poverty globally for the first time in a quarter of a century.
The charity is calling for the introduction of global wealth taxes on the super rich to reverse this rise in extreme inequality. And they are getting some important backers.
In October we set out five wealth policies that could raise £37 billion a year in the UK.
Big backers for wealth taxes
Tech billionaire Bill Gates backed the Oxfam report and said last week he supported the introduction of greater taxes on wealth.
While 200 millionaires from around the world have demanded leaders gathering at Davos this week consider wealth taxes. The Guardian newspaper also came out in favour in an editorial this week.
Bussinessman Ian Gregg, former director of highstreet baker Greggs, also said he supported our call for wealth taxes in a video in the UK this week.
Pressure is growing on governments around the world to take action on soaring wealth inequality. Public support for wealth taxes is spreading.
It’s been a great start to the year for the UK’s top earners. Our friends at the High Pay Centre calculated that FTSE 100 bosses were paid more in three days than the average worker will get across the whole year. The pay of the top company bosses is up almost 40% compared to last year.
But while the CEOs of Britain’s biggest companies are raking it in, many people working in our public services haven’t had a proper pay rise in over a decade. Given the ongoing cost of living crisis, it can’t be a surprise that nurses, ambulance drivers and rail workers have started 2023 with more strikes.
We can change things in 2023
If we are to tackle the problems our country faces, such as the collapsing NHS and care system, then we need much more public investment, supported by taxing the wealth of the super rich. I want 2023 to be the year when we start to see politicians act.
The budget in March is the first big chance this year for the government. Once again we’ll be pressuring Rishi Sunak and Jeremy Hunt to bolster public services by taxing the very wealthy more, as well as making the tax system fairer overall.
So much needs to be done
The crisis in our hospitals is a good example of the kind of battle we face this year but a version of that story could be told about a swath of public services. This fascinating Twitter thread from journalist John Burn-Murdoch sets out the impact of a decade of austerity. The state’s ability to respond to crises has been severely weakened.
We need politicians to prioritise long term funding for our public services. The fair way to do this is through taxing wealth more.
There is little doubt that the cost of living crisis has made things worse, but in 2022 we showed we can make the government act. Read more about what we achieved in 2022 here.
Election on the horizon
This year we will see all the political parties start to jockey for position in the run up to a general election due in 2024. It is a crucial moment to build the case for the role that a transformed tax system needs to play in dealing with the many crises this country faces.
It's been an important year for tax justice in the UK. We've achieved some big campaigning wins with the help of our supporters.
Our research, that showed £37bn could be raised from wealth taxes, has been shared widely: on TV, on the radio, in newspapers and magazines.
MPs have quoted it in the House of Commons. It’s been debated by cross-party MPs in committee rooms throughout the Palace of Westminster.
Our focus will continue to be on wealth taxes next year. As a general election looms, we’ll have an even bigger opportunity to push for new taxes on the super rich.
With the help of our supporters, we had several other big campaign wins this year.
We won an oil windfall tax
North Sea energy companies have been booming this year, announcing record profits on the back of soaring oil and gas prices.
Alongside our allies we campaigned hard for a windfall tax on oil and gas producers. 89,000 of our supporters signed a petition demanding a windfall tax.
And in May, after much resistance, the government u-turned, and announced the introduction of a windfall tax to raise £5bn.
We fought dirty money
We’ve campaigned for a clamp down on dirty international money flowing through the UK for years. And in 2022 we helped force the government to tackle it.
The Economic Crime Bill was about to be dropped from the government's legislative agenda at the beginning of the year. We helped force a u-turn in March, making the government keep it on the table.
The Economic Crime Act was voted into law in August, bringing in strong new enforcement powers to uncover dirty money flows in the UK.
You convinced local councils to back fair tax
In May and June, thousands of our supporters sent over 16,000 messages to their local councillors demanding they take a stand against tax avoidance and companies with links to tax havens.
In response to our campaigning 22 councils have pledged to take action, signing up to the Fair Tax Foundation’s pledge.
The most recent council was Brent in London on Monday. You can see a full list here.
Thank you if you supported our work this year. We've made real strides towards a fairer tax system. While many things are tough as we end the year, it’s important to remember that we can change things.
The UK is entering a period of major disruption. Nurses are striking for fair pay for the first time ever this week. Paramedics will walk out next week with soldiers being drafted in to drive ambulances.
Physiotherapists in the NHS have voted to strike, as have midwives in Wales, while junior doctors are balloting on whether to strike.
All of these workers are battling to keep the NHS running through one of the worst winter crises ever (as they did through Covid).
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However record numbers are leaving the health service because of stress and low pay, following years of government neglect. 1 in 4 hospitals have set up food banks for their staff.
The strikes have been called because, on top of all of this, NHS workers have been offered pay ‘rises’ well below the rate of inflation. This means that their real pay will fall.
The government is refusing to negotiate. Ministers have repeatedly said there’s no money available to protect NHS workers’ wages. This isn’t true.
How to raise £37bn
The UK is a wealthy country, home to some of the world’s richest people. Taxing the wealth of multi-millionaires could fund a pay increase for NHS workers – and protect the health service into the future. As our analysis shows, £37bn could be raised from wealth taxes alone.
The government knows this. They know that wealth taxes could be introduced on the super rich. They know this money could be used to pay nurses and other public sector workers properly. They know the strikes could be averted.
And yet they choose not to tax wealth.
Doing nothing as the UK enters huge industrial disputes is a political choice on the part of the government.
They are to blame for the disruption and upheavals that will be felt in the coming weeks and we must hold them to account.
Amazon paid no corporation tax in the UK in 2021. At the same time its employees’ real wages are dropping despite record revenues and Amazon’s global carbon emissions are increasing. We need to act.
Using the UK government’s ‘super deduction’ scheme, Amazon offset expenses against profits in 2021, which resulted in the company paying no tax in the UK. The situation is no better in Europe.
In the US, the company has been accused of using union busting tactics.
That’s why we’re supporting the Make Amazon Pay day of action on Friday 25 November.
Make Amazon pay on Friday
On Friday campaign groups and trade unions will join forces to demand Amazon pay its taxes, pay its workers and tackle its carbon emissions.
You can help by retweeting the video on Twitter and you can share it on Facebook.
If you don’t use social media, you can share this email with friends and family: it’s on our blog here [add link once uploaded].
Together we can make Amazon pay its fair share, and take responsibility for its workers and the planet.
A historic win at the UN
We had some good news this week. The UN passed a historic resolution making international tax cooperation more inclusive and effective. The move will help tackle global tax dodging.
The resolution, which was passed unanimously, starts to move rule-making on global tax to the UN, away from the Organisation for Economic Co-operation and Development (OECD), which is dominated by rich countries. Developing countries will now have a greater say on global tax.
As our friend, Dereje Alemayehu, from the Global Alliance for Tax Justice, said “This is a historic win for … tax justice”.
The Chancellor, Jeremy Hunt, has just delivered his long anticipated autumn statement.
This was his chance to use higher taxes on the super-rich to invest in our public services. Instead he announced plans for billions of pounds of spending cuts in the coming years.
This return to the failed austerity policies of the past will put the UK in a doom loop of longer hospital waiting lists, collapsing social care and an ever more frustrated public.
And this is all amidst the biggest drop in disposable household incomes on record and a recession.
There were some silver linings to the statement. The existing windfall tax on oil and gas giants was beefed up, even though loopholes still remain. However, the tax incentives given to oil and gas have not been extended to renewables.
Taxes on income from wealth, such as investments and dividends, were increased slightly. The top band for income tax now kicks in at £125,000, rather than £150,000.
But this misses the scale of what was needed to protect public services. A few weeks ago we showed how the Chancellor could have raised £37 billion from wealth taxes.
Instead, the current plans mean that we will be hit by another round of cuts to public services from 2025.
We still have time to stop the worst of the planned cuts from happening. Spending cuts are a political choice, a Guardian article quoting our research argued this week. They are unnecessary and reversible.
Hunt’s capital gains tweak shows we’ve clearly got our foot in the door on wealth taxes. It wouldn’t have happened without our campaigning.
That’s why we’ll keep pushing for the super rich to be taxed more – and for this money to go straight into our public services and to help struggling households.
We’ve been busy this week. Yesterday we launched research showing how £37 billion a year could be raised through five simple changes to the tax system. Five changes that would see the super rich taxed more.
Our research was picked up by The Guardian. And Labour MP Clive Lewis quoted our recommendations live on the BBC while making a case for wealth taxes.
The research has been shared thousands of times on Twitter and Facebook.
It’s been shared on Twitter by George Monbiot and Paul Lewis of Radio 4’s Money Box. And by Members of Parliament Marsha de Cordova, Beth Winter and Clive Lewis.
The revenue from wealth taxes could be used to fund our struggling NHS and public services. Spending cuts mooted by the government are not inevitable. There is an alternative.
Protect our NHS
We’ve launched a new petition to make sure Rishi Sunak can’t ignore this issue.
We’re demanding the government urgently avoid any cuts to the NHS and public services. Instead Rishi Sunak should introduce taxes on the super rich.
Will you support taxes on the super rich to stop cuts to the NHS and public services?
Sign the petition.
With your backing we can make the super rich pay more tax to support our public services.
Cost of living scandal
Our tax system must take more from the rich to support everyone struggling with the cost of living crisis. We’re making strides towards achieving this.
Labour leader Keir Starmer was pushing for the abolition of non-dom status at Prime Minister’s Questions on Wednesday.
I was on LBC News on Tuesday, setting out just how damaging cuts to public services would be in the midst of a cost of living crisis.
Today we’re launching the Stop the Squeeze campaign. We’re demanding that Rishi Sunak reject the failed economics of the past and pursue bolder solutions to solve the cost of living crisis. You can read more about it here in The Guardian.
The campaign brings together trade unions, charities, campaign groups, including Greenpeace, Save the Children and Oxfam. Follow the campaign on Twitter.