Chancellor closes loophole
The government are to close a loophole used for tax avoidance following campaign pressure
British Quakers are celebrating a campaign success following the government’s decision to close a loophole that has allowed corporations to avoid millions of pounds in tax. The chancellor of the exchequer, George Osborne, made the announcement only weeks after being lobbied on the issue by Friends and other Christian-based groups (see ‘Tackling tax dodging’, 4 November). Their letter to the government argued that a crackdown on tax avoidance is an alternative to excessive cuts.
The law will be changed to prevent companies routing online sales through the Channel Islands in order to avoid VAT.
Church Action on Poverty (CAP), who co-ordinated the Christian activism, said they were ‘delighted’ with the ‘first success in our campaign to close the gap between rich and poor through fair taxes’. CAP maintain that the change will save £140m every year. Official estimates put the total amount lost in tax avoidance and evasion every year at £35bn.
Helen Drewery of Quaker Peace & Social Witness (QPSW), who represented Friends in lobbying the chancellor, welcomed the government’s decision. She told the Friend, ‘I hope this is a sign that they are ready to listen to the other aspects of Church Action on Poverty’s “Close the Gap” campaign’. She emphasised that QPSW are ‘actively supporting’ the campaign. The issue of corporate tax avoidance has been highlighted in recent months by CAP and Christian Aid, along with the direct action group UK Uncut.
CAP’s Liam Purcell told the Friend that the measure would have a ‘huge impact’. He pointed out that the amount saved would be enough for the government to cancel all plans to close Sure Start children’s centres – although he does not expect them to do this.
Some have argued that the change could lead to an increase in the cost of online goods, but Liam insisted that this was ‘a very short-sighted way of responding’. He said that the ‘the money passed on to customers was nowhere near’ the tax saved by the corporations concerned. He urged the public to ‘support our own economy rather than companies that are stealing from it’. He added: ‘We’re going to keep on pushing to close down the whole of that £35bn tax gap’.
