2021 has been a hard year for many of us. The pandemic has dragged on and the cost of living is skyrocketing. 

As the year draws to an end we've been reflecting on the positives. 2021 was the year when Tax Justice UK properly arrived. We’re a small team of four people, but we’ve had some real impact. ​

Back in June, we helped force the UK government to support a minimum tax rate for global companies. We worked with the media, politicians and our partners to ramp up the pressure. Although the final outcome wasn’t everything we'd hoped for, it is still a big step forward.

In September we hit the headlines by appearing on BBC Panorama about the Pandora Papers revelations. Journalists around the world revealed how the rich and powerful use offshore structures to slash their tax bills and hide what they’re up to. 

In response more than 116,000 people signed our petition to close the tax loopholes. Last week politicians in Westminster were debating how to deal with the problem. 

In other ways we feel that the media narrative on tax and wealth is starting to change in our favour. In October our Head of Advocacy, Tom, traveled to the Conservative Party Conference. At one event on tax, the first three questions were about taxing wealth more. That wouldn’t have happened even a year ago. 

However, there are some clouds on the horizon too.

As we approach Christmas, it is troubling to know that families navigating the social care system still face misery. The 2.5% increase to national insurance announced over the summer in the government’s ‘health and social care levy’ will mostly go to the NHS, rather than social care.

To be frank, raising national insurance is a bad way of supporting social care. Especially as we’ve had a pandemic that saw the wealthiest become even richer.

The pandemic should be an opportunity to change direction away from the deep inequalities that mark our society but as the Guardian's Polly Toynbee pointed out the actions of the Chancellor, Rishi Sunak, risk taking us in the wrong direction.

​​​We want 2022 to be a year when those with the broadest shoulders pay a fairer share of tax. We will be keeping up the pressure to move us towards tax justice.

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Sara and Robert visited Downing Street this week to deliver our petition calling on the government to end the tax loopholes open to the rich and powerful.

In the end more than 116,000 people signed the petition. We want the government to meet its promises to tackle tax dodging.

Our petition will be harder to ignore given the response we have had from the media. In the past week this issue has been taken up in earnest, with coverage in The Times, Financial Times, the Guardian, Daily Mail and a host of other places. We’ve worked hard with our allies to get journalists to cover it. 

It’s a great response that shows the public and the media are united in agreeing that the government needs to act.

Last week 40 MPs, including 17 Conservative backbenchers, wrote to the Prime Minister calling for action following the Pandora Papers. A draft law has been ready since 2018. Now is the time for action.

We will continue to work with the media, MPs and our partners to pressure the government.

If covid taught us anything, it’s that we need each other. From the carers keeping us well to the shopkeepers who kept food on our tables, the pandemic showed how much we all rely on each other. 

The budget was a chance for the Chancellor to build on that legacy. Instead Rishi Sunak wasted no time setting out dividing lines. 

Rather than asking banks to pay more, he gave them a tax cut. This at the same time as he is increasing taxes on ordinary workers through a national insurance rise. 

Instead of turbo charging efforts to get to net zero, he cut air passenger duty on domestic flights. This is a backwards step. Many will see this decision as a snub ahead of the COP26 climate summit being held in Glasgow next week.

There was no action to tackle the scandals highlighted by the Pandora Papers. Despite a recession in which the richest and some businesses did very well, there was nothing on wealth taxation or a pandemic profits tax either.

There was welcome investment in local authority spending and £1 billion for the levelling up fund. More money was also announced for education, bringing schools to the level they were at in 2010 according to the Institute for Fiscal Studies. The cut to Universal Credit was lessened to some degree. The promised funding for the NHS was included. 

​But as a former Conservative special advisor pointed out, the spending promises were small in the scale of things.

This budget was a missed opportunity that sent the wrong signals on who’s paying higher taxes, clamping down on tax avoidance and curbing climate change. 

New polling by Tax Justice UK has found growing anger at tax avoidance among Conservative voters in the wake of the Pandora Papers.

​The Pandora scandal revealed how the rich and powerful, including senior politicians and political donors, continue to use opaque ownership structures to buy property and reduce their tax bills.

The poll carried out by Survation for Tax Justice UK found that:

• 80% of the public, and 83% of Conservative voters, support “tougher action” against tax avoidance in the wake of the Pandora Papers revelations.
• The proportion of Conservative voters who think tax avoidance by large companies is “morally wrong even if legal” jumped from 86% in June 2020 to 90% now. This is higher than the figure for the public at large (81% to 85%).
• The proportion of Conservative voters who think tax avoidance by individuals is “morally wrong even if legal” increased from 83% in June 2020 to 87% now. This is higher than the figure for the public at large (77% to 82%).

Voters as a whole, and Conservatives in particular, are fed up with the rich and powerful slashing their tax bills. 

It is deeply unfair to see a small minority paying less tax at the same time that the government is raising taxes on ordinary workers.

Rishi Sunak needs to show that he understands the public anger that is out there and use the budget to signal he will close the type of loopholes revealed in the scandal.

Almost 100,000 people have signed Tax Justice UK’s petition calling on the Chancellor to enact a Bill that would crack down on avoidance in his Budget.
 
Tax Justice UK is calling for Rishi Sunak to close tax loopholes and invest properly in HMRC so that everyone pays their fair share. The government should finally introduce the stalled plan to shine a light on the offshore owners of UK property and beef up the powers of Companies House.

​Survation carried out fieldwork via an online panel with 1,003 UK residents aged 18+ on 11 and 12th October 2021. The full results can be downloaded here. 

The poll is an update on a survey carried out by Survation in June 2020.

Last week nearly 140 countries took another step towards a global tax deal that will limit the scope for big companies to dodge taxes by shifting their profits overseas. 

There were some very small positive last-minute changes to the deal, which the OECD believe will raise up to £130bn globally by preventing big companies from avoiding tax.

The deal will be a landmark in the struggle for tax justice, by reigning in the largest multinationals who have for too long been able to exploit the rules to unfair advantage.

But it is not a silver bullet. 

First the global minimum corporate tax rate will be  too low. At 15% it will not be sufficient disincentive to prevent profit-shifting out of the UK, where the headline corporation tax rate is going up to 25%. It will not create a level-playing field for domestic businesses. 

Second, despite some small improvements to the deal, the overwhelming benefit will go to the G7 countries who have led the process. The US will be the major winner. A lot more could be done to split the extra tax raised fairly across the world. Countries in the Global South should have more power over the setting of global tax rules. 

Finally, it’s not clear that the deal will be better at taxing the biggest technology firms than individual digital taxes already in place in some countries - such as the UK’s digital services tax. Letting the tech giants off the hook would be a catastrophe. 

​We have come a long way to get to a deal, but clearly there is more work to be done. Once the dust has settled on the details though, this agreement could be the first of many, each of which take us a step closer to global tax justice.

The Pandora Papers have exposed how the rich and powerful can still slash their tax bills.

Tax Justice UK has decided it's time to act, but we need your help.

We want to whip up media pressure on the Chancellor to tackle tax avoidance in his Budget on the 27th October.

Over the last ten years a lot has been done to clean up these types of schemes. However, much more could still be done by our politicians. 

Support our crowdfunder and help us put pressure on the chancellor to act.

If it chose to, our government could use its 80 seat majority in the House of Commons to clamp down on tax dodging. Politicians could lift the lid on the type of opaque offshore companies  used by Cherie Blair to avoid a £300,0000 stamp duty payment for the purchase of office space.

A law creating a public register of who really owns UK property through offshore arrangements is gathering dust in parliament. The government should pass this legislation now. 

Many of the professionals who enable abuse aren't regulated properly, as this report by Transparency International UK points out. There's limited enforcement when bankers, accountants and lawyers are found to have enabled wrongdoing. 
 
Finally, as our friends at TaxWatch revealed earlier this year, you are 23 times more likely to be prosecuted for benefit fraud in the UK, than tax fraud. Yet the government has cut the number of tax inspectors working for HMRC.  This is about political will.
 
Tax officials bring in many times the revenue that they cost. Between 2016 and 2019 HMRC carried out a third fewer tax inspections. This should change. 

The Pandora Papers is hot news because it exposes lurid details about how the rich and powerful live. If politicians want to end this kind of coverage, it’s in their power to act.

Almost 100,000 people have supported our petition urging the a government clamp down on the tax loopholes used by the rich and powerful.

Sign the petition here. 

​Read our letter to Rishi Sunak calling for action. 

When we set up Tax Justice UK back in 2017 we wanted to make progressive taxation an issue that politicians were confident to talk about.

For too long wealth taxation in particular had been a no-go area for MPs. They were often fearful of media and political backlash if they suggested taxing wealth in a smarter way. 

The Labour Party conference shows how far we’ve come. 

In advance of her speech, the shadow chancellor, Rachel Reeves said: “I do think that people who get their income through wealth should have to pay more”. This is something we've been calling for alongside our allies. 

Reeves set out how unfair the tax system is and laid down principles for how a Labour government would deal with tax reform. She announced that Labour would scrap business rates and replace them with something “fairer”.  

She also warned Amazon’s billionaire boss Jeff Bezos: “If you can afford to fly to the moon you can pay your taxes here on earth!” She committed to ensuring the digital giants pay a fair amount of tax in the UK. 

It’s now clear what the shadow treasury electoral strategy is - they want to build a broad coalition with proposals that both keep the Labour membership happy, but also capture business support. 

But for them to succeed there is more work to be done. The shadow chancellor did not commit to taxing income from wealth the same as income from work. And while the opposition’s course on tax issues appears to be heading in the right direction, we still haven’t heard enough detail on their plans. 

Finally, I am concerned that Labour is still talking about the need to “balance the books” as a household would have to. Government finances are not the same as a household, as our colleagues at NEF have pointed out. Borrowing is still very cheap. The consensus amongst economists is that the government should be spending now to support the recovery, rather than worrying too much about the deficit. 

We’ll keep pushing politicians of all stripes to commit to taxing big companies and the wealthiest. This will help support the public services we all rely on as we recover from the pandemic, and meet the challenges of climate crisis, rampant inequality and demographic change.

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ASOS and Serco were among six companies across finance, outsourcing, retail, real estate, mining and pharmaceuticals who made £16 billion in excess profits during the pandemic.

Our new report “Pandemic Profits: who’s cashing in during covid” shows that a number of companies saw their global profits leap during the last 18 months. The profits of one company, the Scottish Mortgage Investment Trust, were up 801% compared to previous years.

The report argues that these companies are examples of a broader trend where some companies benefited from government pandemic spending, while others were well placed to profit from economic changes that have been accelerated by covid. 

The covid pandemic has been unprecedented in its impact. Not only did it cause a recession that saw the wealthiest grow richer, whilst others struggled, it also resulted in some companies making what appear to be unprecedented profits. 

The report argues in favour of a tax system that supports a fair recovery and keeps up with the economic changes accelerated by the pandemic. 

Those who have suffered over the last 18 months should not be asked to pay more, however, it is fair to expect those who have prospered to contribute more to the economic recovery.

The report recommends that the Chancellor:

• Introduces a one-off windfall tax on pandemic profits made during the pandemic,
• Increases the main rate of corporation tax to 25% immediately and closes corporate tax breaks that don’t work, and 
• Equalises the taxation of capital gains and income.

You can read the report here.

The government will raise National Insurance by 2.5% and announced a similar increase to the way dividends are taxed to help fund social care.

Investment in the care system is long overdue but the majority of funding in this announcement will go to the NHS. Nor does the policy go far enough, according to plans set out by the Women’s Budget Group.

Tax Justice UK Head of Advocacy, Tom Peters, said: “Tackling the crisis in social care is long overdue, but the proposed reforms don’t go far enough, and National Insurance is an unfair way to fund investment in the care system.

“After a pandemic that saw the wealthiest become even richer, those with the broadest shoulders should be first in line to take the strain as we start to build back. 

​“That means tax reforms including equalising capital gains with income tax, abolishing tax loopholes and ensuring companies pay their fair share of tax should also be on the table if we are to create the best possible social care service for all."

The pandemic has forced a rethink about our public services.

So I was pleased to hear a sense of urgency from the government about the need to tackle the social care crisis. This is an issue many politicians have ducked away from.

There was a crisis of care before covid. This affects all of us. Social care is something any of us might need at any point in life.

Newspaper leaks suggest that the Prime Minister is looking to increase National Insurance to pay for more money for the NHS and social care.

This move would be deeply unfair. Increasing National Insurance would hit younger people and lower earners. Pensioners and people earning income from their wealth don’t pay National Insurance.

It's no wonder that a poll by YouGov found a striking generational split in terms of support for the National Insurance hike. Younger people were far less likely to back the plan. The announcement is now on hold until after the summer holidays.

At Tax Justice UK we see this as an opportunity.

The government should be asking the wealthy to pay more in tax to support our care system. This is especially true as the richest people in the UK have seen their wealth balloon during the pandemic.

There are a range of tax reforms the government could bring in to fund social care. Ending tax loopholes, a one off wealth tax or aligning capital gains tax with income tax would all raise billions of pounds.

The government has a choice. It can increase taxes on hardworking families and the young. Alternatively it can use this as an opportunity to ensure the wealthy are taxed properly.

Our friends at the Women's Budget Group have put forward some concrete ideas for how to make sure we build the social care system that we all deserve.