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:
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.
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