Inside story Closing the tax gap

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PCS Comment

27 June 2012

Tackling the tax gap could change lives. By collecting the £95 billion a year tax due but not paid, the government could largely reduce the deficit. Campaigner, Richard Murphy, explains all in his booklet "Why are they increasing the tax gap?"

Closing the tax gap has been a central part of our campaign for the alternative. We have had some success with government reinvesting £1billion to tackle tax avoidance.

But with £25 billion unpaid tax outstanding at any point in time, the fat-cat dodgers are still complacent.

However, our calls for tax justice have been echoed loudly by the imaginative campaigning of leading experts such as Richard Murphy, UK Uncut and, internationally, by the Robin Hood Tax campaign.

The report, launched at a fringe meeting of the union’s national conference in Brighton in May, argues that tax avoidance and evasion take place because there is a lack of political will by the government to address them.

The report sets out how the tax gap could be tackled, almost immediately by:

Creating a proper general anti-avoidance rule in UK law
Supporting the introduction of countryby country reporting for multinational corporations
Investing in more staff at HMRC
Reforming small business taxation.

Richard Murphy (pictured left) told the meeting: “I think the Treasury doesn’t want to collect the tax because if they collect the tax it would destroy their case for austerity, if it isn’t destroyed already, and destroy the Tory myth that there is no alternative.

“We have got to make this a key issue because this is a game changer we can deliver if we say to the people of this country we have got hope if only taxes are paid.”

Curbing casino banking

The union has joined supporters from around the globe in calling for a small financial transaction tax (FTT), or Robin Hood tax, to be levied on banks’ high frequency transactions, financial speculation, credit default swaps and other derivatives. Danielle Pafford, of the Robin Hood Tax Campaign, explained the motivation of the campaign supported by charities, green groups, trade unions, celebrities, religious leaders and politicians. “We hope to curb some of the casino aspects of banking,” she said. “We’re pushing this because on a very basic level the banks caused this mess and should be contributing. It’s about time they paid their fair share.”

The idea is championed by actor Bill Nighy and backed by entrepreneur Bill Gates, and European heads, including French president Francois Hollande.

Several European countries are set to introduce the tax but the UK is lagging behind, claiming it would upset the City of London and see traders flee elsewhere.

There is no evidence to prove the government’s claims and PCS believes the FTT should be seen as an opportunity for the financial sector to pay its share towards the economic gloom it helped create.

“Tax avoidance and evasion take place because there is a lack of political will by the government to address them”

Read and share the booklet: pcs.org.uk/taxgap
The Robin Hood Tax campaign is hosting training sessions: robinhoodtax.org.uk

Public and Commercial Services Union