David Prosser: If we chastise Vodafone, then many married couples deserve it too

The Business View
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The Independent Online

Two words, but a world of difference. Evading tax means not paying HM Customs & Excise what you owe it and is illegal. Avoiding tax means organising your affairs so as to pay as little tax as possible and there is nothing wrong with it. On the contrary, it's very sensible, which is why everyone from the country's biggest companies to ordinary families do it.

Most people will have every sympathy with the UK Uncut campaign. The idea that big business is getting away with avoiding billions of pounds of tax at this time of austerity offends every principle of fairness. Appointing Sir Philip Green, whose family's tax arrangements are well documented, as a government adviser appears to rub salt into the wound.

Still, UK Uncut has picked the wrong targets for its protests. In minimising its tax bills within the confines of the law, Vodafone and Sir Philip are doing nothing different from, say, a married couple who choose to pool their savings in the bank account of the spouse on the lower tax rate. The sums saved may not compare, but the principle is the same.

In fact, were Vodafone not to behave in this way, it might find itself subject to another protest – from its shareholders.

No, a better target for UK Uncut would be the Treasury itself. It maintains a tax system full of loopholes that those with well-paid accountants find easy to exploit.

It would be a simple matter to change the law so that big business paid more tax, so why hasn't the Treasury done so? Well, one reason is that companies could threaten to move their headquarters elsewhere or close less profitable operations. The rest of us do not have this option, so maybe it's time we called their bluff.