UK plc does pay its taxes, says CBI

British business does pay its fair whack of tax, a debate at the CBI this morning concluded. But doing so could be much simpler...

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
A politician, a tax policy director, and the director general of the CBI walk into a room… Sounds like the beginning of a tall tale, but this morning in Westminster, a panel of directors and business leaders came together to talk tax.

Not the most exciting subject but one which is very much in vogue, thanks to all those recent headlines about pasty VAT, sweetheart deals with the HMRC and even the UK Uncut and Occupy protests. Taking part were luminaries from all walk of business including John Burke, director of tax policy for BP, Will Morris (in the same job at GE), Exchequer Secretary David Gauke and, of course, John Cridland, the director general of the CBI.

Cridland, first to the podium, summed up the general frustration in the room: ‘Tax doesn’t have to be taxing. You’ve all heard that phrase. Well, I’m sure it was amusing wordplay when it was first dreamed up but I’m not sure who’s laughing now.’ Cridland went on to quote Louis XIV’s finance guy Jean-Baptiste Colbert, who once said: ‘The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing.’ ‘In recent years the goose was most certainly hissing, and for good reason,’ he said.

John Whiting, director at the Office of Tax Simplification, argued (as his job title might suggest he would) for cutting down the tax code. ‘I’m not going to argue for all taxes to be devolved to a certain popular airline with orange branding,’ he quipped. ‘But we need to cut the errors and cut the worries that all sides have. Tax has to be taxing because that’s the point, you have to pay money, but it should be easy.’

BP’s Bartlett tackled the damaging public view of tax dodging megacorps. ‘It pains me to read about the loss of trust in the public, assuming that all big businesses are dodging tax.’ He said. ‘Most of my time is spent struggling with tax compliance.’

Neither should taxing business be seen as painless way of raising money without making voters smart too much, said Gauke. ‘The idea there is some anonymous entity out there floating around that you can get lots of money out of without affecting people is not true,’ he said. ‘Somebody real will pay that tax. Ultimately, all taxes are borne by households in one way or another, be it the consumer, the shareholder, the employee; humans bear the burden eventually.’

There was also much discussion of the oft-criticised new General Avoidance Rule for business. Intended to catch the serial wrongdoer without making it harder for the rest of UK plc to pay its dues, GAR has been attacked instead because of the so-called ‘sweetheart’ deals over unpaid taxes such as that with Goldman Sachs in which the bank was apparently ‘let off’ half of an unpaid £20m tax bill. But at least some tax gets paid, and without the often considerable delay, cost and complexity of legal proceedings.

Ultimately, the key message was summed up by Cridland. 'UK businesses paid £163bn in tax last year. That's a quarter of all government revenue. If you compare the UK to other international jurisdictions, its clear that UK businesses are definitely paying enough tax.'

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