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Churches ask Chancellor of the Exchequer to tackle tax avoidance

Representatives from a range of Christian denominations andcharities will hand over a letter to the Chancellor today (October31) asking the Government to tackle tax avoidance in order to CloseThe Gap between rich and poor in the UK. There will be a mediaphotocall at 12 noon at 1 Horse Guards Road, SW1A 2HQ when thedelegation, which will include Anglican, Catholic and Methodistrepresentatives, deliver the letter to the Chancellor.

The Twitter hashtag for the campaign is #fairtaxes.

The text of the letter to the Chancellor follows:

Dear Chancellor,

We are writing as senior representatives of a range of Christiandenominations and charities who have come together out of a sharedconcern about the urgent need to Close the Gap between rich andpoor in the UK.

As the Institute for Fiscal Studies has shown, not only is the gapbetween rich and poor in the UK higher than at any point for atleast the last fifty years, the numbers of people in both absoluteand relative poverty are projected to increase substantially in thecoming years. It is our experience that this level of inequality istearing at the fabric of society. The consequence is thatincreasing numbers of individuals and communities feel that theyhave no stake in wider society and have no realistic hope of theirchildren bettering themselves.

We welcome the Coalition Government's commitment to protect thepoorest and most vulnerable from the impact of the spending cuts,but we are concerned that the cuts are nevertheless having a severeimpact on many of the people we work with on a daily basis. In thisclimate, as Churches, Christian organisations and individualChristians, we are increasingly concerned about the impact that taxavoidance and tax evasion are having on the public purse. In an ageof austerity and spending cuts, we believe that tax avoidance ismorally unacceptable and tax evasion has to be seriously addressed.Tackling these issues will reduce the need for further damagingcuts in public spending.

Tax evasion and avoidance is estimated by the Treasury to cost theUK purse at least £35 billion annually. Others estimate the numberto be substantially higher. This is nearly 9% of UK tax revenue andthe efficient collection of this revenue would lessen the demand tocut social and welfare expenditure which is hurting the poorest inour communities so much. Treasury estimates also suggest that thosewho are avoiding paying their contribution are mainly wealthyindividuals and corporations, so the recouping of this money wouldnot harm the poorest and most vulnerable.

We welcome existing initiatives on the part of Government to reducelevels of tax avoidance, but would urge that you take stronger andmore decisive action to crack down on unjustifiable tax avoidancemeasures.

In particular, we would urge you to consider three specificmeasures.

A first, simple step would be to end the anomaly that when goodsare bought by internet or mail order from a company based in the UKthey attract VAT, but if they are bought from some off shoreterritories they are entirely tax free. A tax avoiding industry hassprung up, routing purchases though these territories purely toavoid tax. The £130 million that this costs the UK exchequer issmall in comparison to the total loss, but for instance would beenough to largely protect the Sure Start programme and children'sservices from the 11% cut in the Early Years InterventionGrant.

Secondly, we would urge you not to proceed with the draft proposalson Controlled Foreign Companies announced on 30 June. Whilstadvocates of the policy claim that it will increase the UK's'business competitiveness,' what it actually offers is bigincentives for companies to shift their financial operations to'off-shore' tax havens as a means of avoiding paying UK taxes. Evenon the Treasury's own estimates, this will cost £840 million inlost taxes a year.

Lastly, we would also urge you to seriously consider theintroduction of a General Anti-Avoidance Rule into UK domestic law.Whilst we all await the outcome of the Aaronson inquiry, due toreport today, we are convinced that such legislation could beframed to meet the objectives of deterring and countering taxavoidance in a fair way, whilst at the same time providingcertainty for business.

Yours sincerely, Rt Rev David Walker Bishop of Dudley

Gwen Shaffer Co-clerk of Quaker Peace and Social Witness CentralCommittee

The Revd Leo Osborn The President of the Methodist Conference RevdRichard Mortimer Deputy General Secretary United ReformedChurch

Niall Cooper National Coordinator Church Action on Poverty

Sr Maureen Tinkler Director Vincentians in Partnership

Anne Peacey Chair of National Justice and Peace Network

Alison Gelder Chief Executive Housing Justice

The Revd Jonathan Edwards General Secretary The Baptist Union ofGreat Britain