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10 November 2017

Paying your tax?

Paying your tax?

Carl Beech is deputy CEO at The Message Trust.

Another week of news brings yet more sensational revelations about the tax practices of the wealthy. This week the news has in part been dominated by the "Paradise Papers", a kind of tax sequel to last year's "Panama Papers", revealing more about how the rich and famous have dodged their tax dues. 

Amongst a huge list, we have learnt that Formula 1 champ Lewis Hamilton seemingly legally dodged a £3 million VAT bill on his private jet through an intricate web of companies and a bit of smoke and mirrors. We also learnt that a Lithuanian shopping mall partly owned by Bono is under investigation for potential tax evasion, and that three stars of the hit BBC sitcom Mrs Brown's Boys apparently dodged a £2 million tax bill.

Further revelations list more connections between the White House and Russia, confusion as to who owns Everton FC and a now modern classic story of mega corporation dodging tax by hiding profits off shore.

What are we to make of this? 

It shouldn't come as a surprise to us. Most people don't like paying tax and the mega wealthy and powerful are no exception. After all, how many of us would say no to a way of keeping some extra money each month, even as we attack the rich for doing the same?  The difference is that the rich have the means to have teams of advisers who are purely dedicated to protect their wealth and they, for the most part, deploy them. I honestly doubt whether Bono or Lewis Hamilton know the details of every company and arrangement that are being made.  Rightly – but probably wrongly and unwisely – they just trust their advisors.  

Drilling into it a bit more I remember talking to a church leader who told me how he reduces his tax bill by "employing" his wife as a cleaner and claiming a bunch of other expenses. Apparently many church leaders do this and there are specialist tax people who help the ordained dodge the HMRC, and thereby dramatically reducing their tax liability. That same evening he raged against the rich and their offshore non-domicile tax dodging ways. Seemed to me to be the same sort of thing albeit on a smaller scale.

Now, I'm not saying we shouldn't tackle injustice or call people or corporations out when it's clearly out of order. After all, as Christians we should always question where and how people pay their taxes – people on low incomes don't tend to think about evasion and end up paying in full via things like PAYE and VAT. For the rich to be operating by another set of rules is a deep injustice. But I do have Jesus' words echoing round my head: "Why do you look at the speck of sawdust in your brother's eye when there's a beam in your own?" (Matthew 7:3)

Firstly - before you get all ragey or indignant, make sure your own life in whatever area you are feeling all ragged about is in order. 

Secondly – "Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honour, then honour." Romans 13:7).  When it comes to the specific issue of tax, the Bible says pay it.  And that's that.

The National Audit office calculated that in 2016 the UK lost £2.7 billion a year through tax avoidance – that's people operating within the letter but not the spirit of the law. In addition an incredible £4.4 billion is lost through illegal tax evasion. 

So here's a thought: with all the deep angst and anger around austerity, how can we make sure we're doing our bit and walking with integrity before we rage against the world?

"Blessed are the pure in heart," said Jesus, "For they will see God." (Matthew 5:8).

Photo by Ragnar Vorel on Unsplash