View from Parliament: The John Howell Column

MP for Thame John Howell
MP for Thame John Howell
Share this article

It is a sad reflection of society that in the run up to the Olympics there was more effort to condemn calls for people to stop cheating the taxman by paying cash than about the threat of strikes by Border Agency staff and the proposed work-to-rule by London Underground workers, some of whom had already been promised Olympic bonuses of up to £1,000.

That this industrial action was in the end called off is not the point. This threat was vindictive and self-centred and showed how a minority of militants was prepared to hold the country and the Games to ransom. It should have been roundly condemned by everyone.

This Government has spent some £900 million extra to clamp down on major tax evasion and aggressive avoidance. Quite rightly too; it is expected to recover at least £7 billion of tax. But the idea that it is fine for the rest of us to avoid tax by paying cash for services because the amounts are relatively small is wholly unfair. For those who work hard and pay their taxes, it is galling to see others shirk their responsibilities on either front.

Of course there are good reasons why businesses, particularly small businesses, should in some circumstances want to operate on a cash basis. There is nothing wrong or illegal in doing so. But as I found out when I worked as a tax inspector, all too often, paying cash with a discount is a shameless and deliberate way of cheating the taxman. The Treasury estimates that this costs the Exchequer £2 billion a year.

The implication of statements made by the Opposition that the Government should concentrate on large scale tax avoidance and leave the ‘ordinary’ tax payer alone to carry on cheating is in the same league as the disregard which the unions showed to society in the run up to the Olympics. It is also intensely hypocritical. Under the last Government, some high earners boasted that they were paying less in tax than their cleaners.