Churches demand tough action on tax avoidance

Churches have called upon George Osborne to clamp down on tax avoidance ahead of the spring Budget being announced on Wednesday.

The Budget announcement is expected to include the Government’s response to a report by Graham Aaronson QC last October, which recommended the introduction of a General Anti-Avoidance Rule (GAAR).

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.

An estimated £12 billion is lost each year to the British economy as a result of tax avoidance.

The GAAR proposed in the Aaronson report concentrates on preventing "egregious" tax avoidance.

However, the Methodist Church in Britain, the Baptist Union of Great Britain and the United Reformed Church argue that Government action should go further than tackling only the "egregious" tax avoiders to ensure that all taxes are paid fairly.

They believe that a more encompassing approach could see the Government recoup the full £12 billion being lost each year.

“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.

“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 Rev Jonathan Edwards, General Secretary of the Baptist Union of Great Britain, said it was the Church's duty to speak out against injustice in all its forms.

“The Chancellor has said that he wants to come down on tax avoidance like a ton of bricks. Many Christians will welcome that approach as an important way of tackling injustice," he said.

Simon Loveitt, the United Reformed Church’s spokesperson for public issues, added: “We have a moral duty to pay tax. In times when vulnerable people are suffering because of cuts in public services, the immorality of tax avoidance becomes even more starkly apparent.”
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