Rebecca Reading: Topical and untypical on tax
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Rebecca Reading Partner
Baker Tilly
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A fairer tax system is not one where just the rich pay more. AS someone who spends her working life immersed in everything tax, I will admit to feeling more than a little pleased when the media puts tax at the top of the news agenda, especially if this happens over a weekend as I suddenly become a lot more interesting in the eyes of my family and friends. Tax has been a hot topic recently, and I think we can expect this to continue for a few more weeks yet, as the political parties hold their autumn conferences. Last week’s Liberal Democrat conference even carried a tax theme as its headline: “Fairer Tax in Tough Times”. Back in June, when tax was yet again making headlines as a result of certain public figures being reported as taking part in various planning arrangements, I noticed a great deal of discussion around whether any of us had any business objecting to these kinds of schemes. One argument put was that taxation was simply a matter of law, and provided one’s actions were legal, the outcome, beneficial, fortuitous or otherwise, should be acceptable. However well this is argued, somehow it does not feel quite right. It does not pass the gut feel test. Is this perhaps because it does not address the question of whether the outcome is fair? When I reflect on such debates, I am left contemplating why tax exists at all. It seems to me important to at least try to come to some sort of view about this before attempting to write down rules governing how much should be paid by whom and by when. The results of a recent British Social Attitudes Survey shows that in 2011 the proportion of respondents calling for an increase in taxation and spending rose for the first time in nine years. My interpretation of this is that at least to a degree tax has an ethical or possibly philanthropic dimension and as such it should be collected for the wider public benefit. It is generally acknowledged that most people are content to pay the tax they owe, provided the system is fair. Behind this is a belief that it is right to pay tax, even though this belief may not be articulated explicitly. If this is true, then tax cannot simply be a matter of following the law regardless of the outcome. Everyone should pay tax: it’s a moral imperative. This leads me back to the “Fairer Tax in Tough Times” slogan. It is hard to argue that a fairer tax system would not be a good thing, but I cannot help wondering how it can be that our tax system is still, at least in the view of the Liberal Democrats, either not fair or not fair enough. As a tax professional I often find myself surrounded by intelligent and creative people and one might have thought that between us we could have come up with a tax code that delivered a fair outcome by now! This seems to me to be at least part of the problem: we look to the law to deliver what may fundamentally be an ethical issue. However hard anyone tries, is it actually possible to create a set of rules that is completely fair in every circumstance? I cannot help wondering whether if this were possible it would have been done already. Rebecca Reading Rebecca specialises in Corporate and International tax. She spent six years leading the in-house tax team in a global manufacturing group, and has a practical and commercial approach to tax. More articles in
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