Three major British Churches are calling on Chancellor George Osborne to take tough action on tax avoidance in his 21 March 2012 statement.
The Methodist Church in Britain, the Baptist Union of Great Britain and the United Reformed Church, along with Church Action on Poverty, have expressed their concerns ahead of the Spring Budget announcement due this Wednesday.
The Budget announcement is due to include the Government’s response to the October 2011 Aaronson Report on the introduction of a General Anti-Avoidance Rule (GAAR).
In its simplest form, a GAAR states that where a transaction has been undertaken primarily or only for the purpose of paying less tax, that transaction should be ignored for the purpose of determining how much tax an organisation or individual should pay.
“The amount of tax an individual pays should be based on what they owe rather than the skill of their accountant,” said Paul Morrison, Public Issues Policy Adviser for the Methodist Church in Britain.
He continued: “It is simply unjust that those with wealth and privilege often have the option of selfishly sidestepping their obligations, while others continue to contribute regardless of the financial pressures they face.”
The Aaronson Report recommends a “narrowly focused” GAAR to prevent “egregious” tax avoidance. Currently, £12 billion in tax is not paid every year due to tax avoidance schemes, which would be covered by a GAAR.
The Churches argue that Government should not target only “egregious” tax avoiders, but that it should demand that all taxes are paid fairly to the letter and the spirit of the law. A more comprehensive GAAR would mean that the full £12 billion currently lost to the economy could be collected.
"God hates injustice, and it is our duty to speak out against it in all its forms,” said the Rev Jonathan Edwards, General Secretary of the Baptist Union of Great Britain.
Mr Edwards went on: “The Chancellor has said that he wants come down on tax avoidance like a ton of bricks. Many Christians will welcome that approach as an important way of tackling injustice."
The Churches have also highlighted injustices in the tax system by supporting Christian Aid’s Trace the Tax campaign and Church Action on Poverty's Close the Gap campaign.
“We have a moral duty to pay tax,” added Simon Loveitt, the United Reformed Church’s spokesperson for public issues. “In times when vulnerable people are suffering because of cuts in public services, the immorality of tax avoidance becomes even more starkly apparent.”
* Christian Aid’s Trace the Tax campaign - http://www.christianaid.org.uk/ActNow/trace-the-tax/index.aspx
* Church Action on Poverty's Close the Gap campaign - http://www.church-poverty.org.uk/news/ctgbooklet
* Aaronson Report on the introduction of a General Anti- Avoidance Rule (GAAR) - http://methodist-news.org.uk/BVI-QQXF-35NNYU-A8T8C-1/c.aspx