Chancellor must act on tax avoidance, say Churches

Three major British Churches are calling on Chancellor GeorgeOsborne to take tough action on tax avoidance. The Methodist Churchin Britain, the Baptist Union of Great Britain and the UnitedReformed Church, along with Church Action on Poverty, expressedtheir concerns ahead of the Spring Budget announcement thisWednesday.

The Budget announcement is due to include the Government's responseto last October's Aaronson Report on the introduction of a GeneralAnti- Avoidance Rule (GAAR). In its simplest form, a GAAR statesthat, where a transaction has been undertaken primarily or only forthe purpose of paying less tax, that transaction should be ignoredfor the purpose of determining how much tax an organisation orindividual should pay.

"The amount of tax an individual pays should be based on what theyowe rather than the skill of their accountant," said Paul Morrison,Public Issues Policy Adviser for the Methodist Church in Britain."It is simply unjust that those with wealth and privilege oftenhave the option of selfishly sidestepping their obligations, whileothers continue to contribute regardless of the financial pressuresthey face."

The Aaronson Report recommends a "narrowly focussed" GAAR toprevent "egregious" tax avoidance. Currently, £12 billion in tax isnot paid every year due to tax avoidance schemes, which would becovered by a GAAR. The Churches argue that Government should nottarget only "egregious" tax avoiders, but that it should demandthat all taxes are paid fairly to the letter and the spirit of thelaw. A more comprehensive GAAR would mean that the full £12 billioncurrently lost to the economy could be collected.

"God hates injustice, and it is our duty to speak out against it inall its forms," added the Revd Jonathan Edwards, General Secretaryof the Baptist Union of Great Britain. "The Chancellor has saidthat he wants come down on tax avoidance like a ton of bricks. ManyChristians will welcome that approach as an important way oftackling injustice."

The Churches have also highlighted injustices in the tax system bysupporting Christian Aid's Trace the Tax campaign and Church Actionon Poverty's Close the Gap campaign.

"We have a moral duty to pay tax," added Simon Loveitt, the UnitedReformed Church's spokesperson for public issues. "In times whenvulnerable people are suffering because of cuts in public services,the immorality of tax avoidance becomes even more starklyapparent."