South of the River – Offshore Banking Business

So in the light of the Panama Papers this week, my question is: have you ever avoided paying tax?

My guess is that most people in South Leeds have at some time or another. Have you paid for a building repair in cash to avoid VAT? Have you bought cheap fags in the pub?  And of course as has been mentioned repeatedly here on South Leeds Life in the comments section: the prostitutes working in Holbeck don’t pay tax on their earnings.

So that’s that. Cameron’s done nothing wrong, because we all do it.

Except … except that the scale is slightly different, isn’t it?

Most of us round here get most of our income from employment. We pay our tax through PAYE. It’s a great system, we don’t have to work out how much we owe, someone in accounts does that for us and we receive our pay with the tax already deducted. We know that what we’re given is ours to spend.

If you’re self employed like me, the system works slightly differently. We fill in a form, a year after the time we earned or received the income, and tell HMRC how much we’ve earned. Then they tell us how much we owe. I find this system very easy, but probably only because my income is so low I have yet to be charged anything. Ho hum.

This system applies whether you’re like me, or you’re David Cameron. And by the way there are plenty of people like me: unemployed, benefits run out (because we have a working partner), encouraged to become self-employed so that we are no longer on the books as unemployed. I call it self-unemployment.

If you’re rich, you still have to tell HMRC who much you ‘earn’. They may allocate more resources to check than they do for small fry like me, but of course those resources are dwindling as austerity bites and tax inspectors are laid off.

This is where quantity turns into quality.

If you are rich you can afford to pay for clever accountants and solicitors to find ‘legal’ ways to avoid tax. It’s called ‘reducing your tax liabilities’. Corporations like Starbucks and Apple do it, rich people like David Cameron, Sarah, Duchess of Kent, Mark Thatcher, Heather Mills and any number of footballers do it too according to yesterday’s Guardian.

You or I may have avoided paying £100 or so in tax, if that. These people systematically avoid paying millions of pounds year in, year out. Generation after generation. That’s bad enough when everyone’s income is going up, but it isn’t right now. Our wages aren’t going up and our services, which we need more than ever, are being cut. So the millions they are not paying is actually hurting us, because it means there’s less in the exchequer to pay for services.

We lose out twice through austerity. Take domiciliary care – the care workers that look after our older relatives. The council isn’t given enough to pay for what’s needed by government, because there allegedly isn’t enough in the kitty. That hits our relatives who don’t get the care they deserve, it also hits the care workers that are trying to provide that care, but are being paid minimum wage or below.

Meanwhile the rich win twice out of austerity. They don’t pay the tax they should, they are less likely to get caught and with services slashed their tax rates can be reduced. Oh, that’s three times – I told you it was unfair!

There’s something else I wanted to say about the Panama Papers.

South Leeds Life is a piddling, small, amateurish, volunteer band of ‘journalists’; but we are part of the Fourth Estate, we are journalists and journalists did something really important this week.

As the story broke I didn’t quite grasp it, but listening to a Radio 4 documentary I realised how many people were involved and how long they had worked on this story. Hundreds of journalists, months of work, then a co-ordinated release of stories.

It’s a massive story and I suspect only this combined effort could have had a hope of breaking it successfully. The lone investigative reporter would only get a fraction of the picture and then be silenced by a libel writ.

It’s a story that’s gone round the world, hitting elites in Iceland, Russia and China as well as Britain. It’s not over yet and I’m proud to be, in however small a way, part of the profession that exposed it.

By the way, I don’t know if you’re aware but my South of the River headlines have all been song titles for the last year or so. Offshore Banking Business was a hit for the Members in 1979, they were even on Top of the Pops. This isn’t a new story, but it has been very hard to expose properly.

I’ll be back next week with more of my views from South of the River. If you’re on Twitter, you can follow me: @BeestonJeremy.