“We’d all do it if we could.”
That’s a phrase I’ve heard a few times during the past week since it emerged that Rishi Sunak’s wife, the multi-millionaire Akshata Murty, has saved millions of pounds in tax on dividends from her family’s IT business empire. Usually from Conservative apologists for the Chancellor.
Murty has managed to significantly reduce the amount of tax she pays in the UK by claiming non-domiciled status, despite living in the UK since 2015. Sunak, who sought to defend his wife on the dubious basis that because she is Indian she shouldn’t have to pay UK tax on all her international earnings, has inflamed the scandal further.
The avoidance of tax (as opposed to tax evasion) is not illegal. Yet tax avoidance does violate widely accepted British notions of fairness. Nine out of ten people believe that tax avoidance is morally wrong, even if technically legal, according to a 2017 survey.
Whether we would all avoid tax if we could is rather a moot point. In reality most people in Britain cannot afford the sort of tricksy accountant or lawyer required to avoid tax. Nor do the majority in Britain have a permanent home (domicile) outside of the UK — which is what it takes to qualify as a non-dom.
And besides, Sunak isn’t supposed to be like the rest of us: he literally presides over the British tax system. It’s fair to expect him and his family to set a good example. This is especially true at a time when the Chancellor has just increased taxes for working people against a backdrop of plummeting living standards and rising inflation.
Above all, the controversy highlights once again the contrasting way in which rich and poor are treated in modern Britain. The government recently decided that the £20 Universal Credit uplift granted to some of the poorest families in the country during the pandemic was “unaffordable”. Yet we are expected to shrug and move on when the fabulously wealthy occupants of No 11 Downing Street (Sunak is the richest MP in parliament) assiduously seek to reduce what they pay into the collective pot.
It’s true that a belief has long prevailed in this country that the rich will only work if you shower them with tax breaks whereas the poor will only do so if you squeeze and impoverish them. However, the corrosive cynicism that runs through the veins of contemporary conservatism is a more recent phenomenon. Not everyone in Britain is on the take and to say otherwise is little more than projection. How quickly some forget the selfless heroics of public service workers that got us through the grim first two years of the pandemic.
If public service represents a higher calling then the ruthless pursuit of one’s own self-interest via the tax system (hello Rishi and Akshata) is wildly at odds with that. And if moral arguments fail to convince you, here is a cold and rational one: in a country where politicians are once again telling us of the pressing need to “balance the books”, perhaps they should get busy closing the loopholes which make it so frighteningly easy for the fabulously rich to avoid paying tax.