In recent weeks I’ve watched with interest the stories about the large multinationals and their relationship (or lack of) with HMRC. The highlight being the good hiding the Public Accounts Committee gave Andrew Cecil, a senior member of the Amazon team as he failed time and time again to answer a very simple question – what should your fair share have been?
During a (pretty overpriced) pub lunch these stories came up with one person telling us about someone they know and their current tax situation. Much like a ‘mini-amazon’ he owns a company that then invoices his ‘employer’ rather than being a direct employee. That means he can then draw a dividend rather than a salary (which attracts a lower tax rate) and can claim expenses allowing him to bring in income that takes him well above the higher threshold whilst paying almost no tax. On top of this his ‘employer’ also avoids any pension or national insurance contributions on his behalf. So it seems that it’s not just Starbucks that’s at this avoidance lark.
His immediate suggestion was that I should look into doing something similar. If my employer would agree to it I’d be quids in he tells me. I politely declined and not wanting to make a scene I paid my fair share of the extortionate bill (you can see where this is going) and made my way home. Needless to say I was a little surprised by his suggestion – I know that what he is doing is perfectly legal but I’m not that guy. I’m not the guy who doesn’t pay what I owe. By taking on his suggestion I’d be like that guy who leaves when it’s his round or worse, like the guy that doesn’t put my money in when the bill goes round so we’re awkwardly £20 short. This (and I hope my friends will concur) just isn’t me and what makes it worse I know this isn’t most people either – if they do set up this arrangement often they just don’t see this as ‘not paying their fair share’.
I like paying tax. I like paying it because I like to know that if my family are ill they can get medical care. More than that I’m in awe of a society that believes that it is right that one person pays in to ensure that a total stranger can get medical care if they need it. I like paying it because I believe that education for everyone is the best way of levelling the playing field and making people happy. I like paying it because I want to be safe in my bed and have firemen come and rescue me if my house is on fire. I also like paying it because I don’t know when I might need a social net to catch me if things go wrong. It’s caught many of the people I know and put them back on their feet. They would not be on their feet today if that net hadn’t caught them. Finally, and most importantly I like paying tax because I like doing the right thing; picking up my share of the bill is the right thing to do.
I’m not the guy that ducks out of it at dinner and I’m not going to be the guy that ducks out of it in society. Why? Because nobody likes it when there isn’t enough money to pay for the amazing meal we all ordered and shared together.