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<b>TV Review:</b> 'No tax please, we're rich'

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3rd Mar 2006
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The BBC broadcast a 'Money Programme' entitled 'No tax please, we're rich' on 2 March. In the course of researching the programme the BBC secured, for what is believed to be the first time ever, an HM Revenue & Customs estimate of what the UK tax avoidance industry costs the exchequer. This official number is £10 billion a year, equivalent to £350 a head for the 29 million taxpayers in the UK.

AccountinbWEB contributing editor Richard Murphy appeared in the programme and commented afterwards, 'It's a welcome development that HMRC is now able to publish such figures, but there are grounds for questioning the provenance of its numbers - how had it reached this estimate?'

Research from the Association for Accountancy and Business Affairs and by academics suggests that total tax losses from avoidance and evasion is in the region of £75-£100 billion. In that case the £10 billion lost to tax avoidance makes up a small part of the loss and less than 2% of total government spending. In itself this raises questions, including whether the focus of the Revenue's activities should be avoidance or evasion, the latter seeming to be more important if their own estimate is true.

Unfortunately such hard questions were not raised by the programme. Such angles are difficult to put across on television, where the entertainment factor requires a focus on personalities and big numbers. That lead to what some might see as a lack of focus in the programme and a concentration on schemes that have now been closed. This is, unfortunately, necessary. The BBC has a small budget for litigation and so tends to stick to what is on the public record or easily proved.

Murphy thought the programme served a purpose despite that limitation. He said 'The reason I took part in the programme was because I think it's important to engage these issues and say tax avoidance is not just socially harmful and unethical, it positively harms the UK economy too.'

When asked to explain how it harmed the UK he explained, 'Tax is a factor in the creation of a level playing field and level playing fields are essential for social justice, fair competition and equal access to markets. Our tax system is not encouraging any of these socially desirable outcomes, and it's no coincidence that so many of the 'rich list' in the UK are either non-domiciled or have managed to avail themselves of offshore advantages. When we have an economy that encourages wealth to leave the UK in this way, as it does at present, is it working to best effect? I doubt it.'

Murphy said he wanted to use his appearance to argue for the end to the domicile rules and for the introduction of a general anti-avoidance principle into UK law. He believes both would contribute to a significant enhancement in the well being of the UK, but sadly the 'Money Programme' found it difficult to grapple with how best to address the issues it raised. Maybe we just have to accept that television is just not up to tackling complex issues such as taxation.

"There's another reason for that though. All the Big 4 refused to take part in this programme and argue why tax planning is important, even though it's clearly a significant part of their business. At the very least that suggests that within the relatively superficial, but influential world of television, the government is winning the PR battle with the tax profession. That might be something to think about.

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