I have written a bit about taxation before, so it probably won’t surprise you that I have found the ongoing “controversy” about Jimmy Carr’s tax affairs and the political pronouncements by both Labour and Tories (not least David Cameron) pretty irritating.
Let me put my cards on the table. I avoid paying tax! Most people do, I would expect. I am quite happy to whatever tax is due, but frankly I would not want to pay more than I need to, and I take steps to reduce the amount I pay.
All, I hasten to add, perfectly legally. And, whilst the methods I use are a little more mainstream than Mr Carr’s (for instance, using my annual ISA allowance, paying into a personal pension plan, and, in the past, using a limited company to manage my freelance work), they are frankly no different. The government has decided to allow me to save tax in a variety of ways, and I chose to do so; similarly, Mr Carr took advantage of sophisticated but government-sanctioned ways to reduce his tax bill. Indeed, since it is fair to assume that every UK taxpayer at the very least makes the most of their personal allowance (currently £8105 pa) – if only because it is taken into account automatically by HMRC), so to a small extent we all avoid tax.
I might not think it is “fair” that Carr pays so little tax, but it seems odd to berate him for doing what others do, just because he is a public figure. (There may be a bit of hypocrisy if his stage act focuses on others wrongdoing – I am not a fan, and I don’t know his act – but that certainly isn’t “a moral issue”.)
In fact, the most hypocritical person here seems to be David Cameron. He is in the perfect position to change the tax legislation – to simplify the UK tax code, for instance, and remove loopholes that result lawyers and accountants thinking up whizzy (if legal) schemes to reduce their clients’ tax bills.
Instead, he and his chancellor reduced the top rate of tax payable by the highly paid in the last budget. Now, I’d say that IS a moral issue.