Hodge urges big business to “pay fair share” to tackle tax gap

The government needs to bridge the tax gap and collect what it’s owed from tax-avoiding big businesses, Margaret Hodge MP said today.


By Samera Owusu Tutu

30 Oct 2014

Speaking at the Public Accounts Committee’s (PAC) conference on the impact of globalisation on taxation today, Hodge said: “Paying tax should cease to be a voluntary gesture for the rich and the powerful and a civic obligation for the rest of us. We should all pay our fair share of tax.”

The conference, which aimed to broaden the debate around fair and efficient tax systems — an issue that has been championed by Hodge and PAC during this parliament, was attended by UK and international politicians, academics, campaigners, tax experts and business leaders.

During her opening speech, Hodge pointed to the need to bridge the tax gap to give the future of public services better footing, stressing: “Here in the UK, the tax gap – the difference between the amount the Government considers it is owed in tax and the amount it actually collects –has grown to £34 billion. The future of our public services depends on getting in every pound of money rightfully owed to Government.”

Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales (ICAEW), who was on the conference’s main panel, commended the conference for providing a platform for a necessary debate on global taxation, saying: “An international conversation is already taking place on tax. Countries recognise the need to reduce burdens on business in order to attract inward investment, while at the same time trying to protect their tax income to help pay down public deficits.

“As a result there are growing questions about structures like the ‘Double Irish’ and even the UK Patent Box. This conversation has a long way to go but the fact that it is taking place is a step in the right direction.”

Both tax avoidance and tax evasion were flagged throughout the day, both during the panel and in break-out sessions, with many attending saying the focus should now shift to tax evasion if the tax gap is to be bridged.

The conference comes one day after HM Revenue and Customs signed an international agreement on tax evasion at the Global Forum in Berlin.

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