Photos of most-wanted fraudsters are fine, but the HMRC must change structures that cause billions to be legally lost in revenue
If imitation is the sincerest form of flattery, the members of UK Uncut must be feeling pretty bashful this week. In an apparent tribute to the social media savvy campaigning group, Her Majesty’s Revenue and Customs (HMRC) is using photo-sharing website Flickr to publish images of the UK’s 20 most-wanted tax evaders. Not so long ago, Flickr’s photostreams were adorned with protesters getting dragged out of Topshop by unforgiving rozzers. Now they are home to the sinister mugshots of individuals HMRC alleges have committed tax fraud worth millions.
There is a certain irony to the fact that HMRC is capitalising on the wave of popular anger surrounding tax avoidance and evasion. It was, after all, HMRC’s own ineptitude which managed to create that popular anger in the first place. Nevertheless, the department’s latest effort should be commended, not least because it makes a nice change from its usual inefficient obsession with low-end benefit fraud. As Willard Foxton wrote in an excellent article on tax avoidance and evasion:
“Over the last few years HMRC spent £633,000 on publicity around tackling high-end tax evasion, compared with £17.5m on publicity around tackling benefit fraud. By that crude measure, HMRC considers tackling benefit fraud about 27 times more important than tackling high-end evasion.”
But as heartening as it is to see HMRC getting its priorities straight, I can’t help but feel it could have done so much better. A more efficient use of Flickr would have been to upload a photo of Guy Laurence, the UK CEO of Vodafone, a company that allegedly avoided £6bn of tax in one transaction alone. If you’re going to go for the faces of tax avoidance and evasion, why not tackle the really big hitters?
The answer, I suspect, lies in the difference between tax avoidance and evasion. Tax evasion is a morally straightforward affair: it is illegal. Those who do it are breaking the law and must be brought to justice accordingly. Tax avoidance, ie the practice of manipulating legal loopholes in order to circumvent the law without actually breaking it, is rather more complicated. Because it is technically legal, it allows its defenders to make all sorts of spurious excuses for it. We are told it is inevitable, like water escaping through the cracks in a dam. We are even told to discuss it is impolite. As David Cameron said recently, “I am not going to give a running commentary on different people’s tax affairs. I don’t think that would be right.”
But most significantly, the legality of tax avoidance means that those who are supposed to prevent it can practice it themselves. As this very paper uncovered in April, David Cameron’s own family fortune was made in offshore tax havens. And indeed, the government has benefited from contracts with gargantuan tax avoiders Vodafone, as well as the occasional business trip to India.
To that end, it’s hard not to see HMRC’s pursuit of 20 naughty tax cheats as all rather “plus ça change, plus c’est la même chose”. The department is willing to act tough when it comes to straightforwardly illegal behaviour by individuals, but refuses to change the structures that allow billions of pounds worth of tax to slip through our fingers legally. Perhaps if HMRC took its duties seriously, Vodafone would be treated as the socially irresponsible entity it is, rather than the legitimate business setting up shop on every local high street. But the law is unlikely to be changed as long as the law-makers benefit from the status quo.
We will no doubt continue to be treated to these commendable, but ultimately meaningless endeavours from HMRC, as it tries to respond to popular anger in a way that does nothing to address the issues people are actually angry about. But I feel I should issue the department a warning: UK Uncut’s question to tax avoiders – “We pay our taxes, why don’t you?” – is a simple, reasonable one that the public has not forgotten. Tax avoidance is now a widely, deeply felt and persistent issue. Esteemed politico William O’Hagan (aka my dad) once told me that politicians are followers, not leaders. If that’s the case, this government better swiftly catch up with the gathering momentum of tax avoidance backlash. I doubt any amount of Flickr sets from HMRC will make that go away.