When is a legislator not a legislator? When he’s a moraliser …


The Jimmy Carr brouhaha, now in it’s third day, may at last abate with the news that Mr. Carr has repented his sins and decided to abandon his 1% tax liability scheme. The comedian said today that he had made a “terrible error of judgment” over his tax arrangements.
He was rounded on by David Cameron yesterday, who said “I think some of these schemes – and I think particularly of the Jimmy Carr scheme – I have had time to read about and I just think this is completely wrong. People work hard, they pay their taxes, they save up to go to one of his shows. They buy the tickets. He is taking the money from those tickets and he, as far as I can see, is putting all of that into some very dodgy tax avoiding schemes. That is wrong. There is nothing wrong with people planning their tax affairs to invest in their pension and plan for their retirement – that sort of tax management is fine. But some of these schemes we have seen are quite frankly morally wrong.”
Cameron has every right as an individual to moralise over such issues, but that is not what we pay him for. If there is a problem with tax avoidance – for example, that it is becoming too aggressive – then legislate. The danger with moralising is that the immoral will take no notice. Jimmy Carr was a high-profile target and one who was easy to make an example of, embarrassing him into corrective action by extracting himself from the scheme and begging for forgiveness – but will the fat cat unknown investors in these schemes do likewise? I doubt it.
Legislation is what is needed. There must be a shake up of the revenue system, especially where personal taxation is concerned. Schemes such as K2 are widespread. Footballers have their own variety of tax avoidance, where they invest their image rights in a company and borrow against it, thereby avoiding tax. Surely it must be possible for this government to legislate against circular borrowing of this kind?
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