Thursday, June 21, 2012

Clergy Tax Avoidance

At vicar training college, we had a visit from a clergy tax specialist, to help us get our heads round the peculiar world of clergy taxation. Every year I pay a tax specialist to sort my finances out - I figure it's worth the money I pay him for the stress I avoid in trying to put my tax affairs together, and the anxiety I avoid following my declaration just in case I've got something wrong and HMRC descend in fire from the throne.

The chap at college informed us that, with the various exemptions we could claim, he could probably get our personal tax liability down to nearly zero. I made a mental note (as did several others I spoke to) never to engage his services. There is no representation without taxation, it's one of the responsibilities of citizenship, even if we don't like all the things the tax is going on, or particularly trust the people who are making the decisions. For those who are liable to tax, there is a moral responsibility to pay it.

As society strains to extends the sovereignty of personal choice into more and more areas (e.g. the definition of marriage, when and how to die), we're also rowing back from corporate expressions of citizenship and belonging (declining turnout, very few cities have gone for elected mayors, and there is minimal enthusiasm for an elected Lords or police commissioners). It may not be long before we're clamouring for a personalised taxation regime, as it's one of the few remaining things that are a 'given'.

At the moment, peronalised taxation is only available to those with the means. Jimmy Carr has this morning admitted on Twitter than in signing up to a tax avoidance scheme he made 'a terrible error of judgement'. I'm not a Carr enthusiast, but I can understand how he got there - if you earn money, but aren't too excited by facts and figures, it's easier to delegate the management to someone else. Better that than stuff it under the mattress a la Ken Dodd. And so you take their advice without really working out what it means. And if you think he's only come clean because he's been found out, still, fair play for apologising straight away and sorting it out (are you watching politicians? journalists?)

Some wag commented on Twitter yesterday that most clergy avoid tax by dint of not being paid very much. Even so, earning people have a responsibility to pay tax. I don't know if there's any sensible tax version of the Universal Credit - just as there is a universal baseline benefit level to keep people out of poverty, so could there be a universal baseline tax liability beyond which you can't write any more off?

Final bit of credit - well done to the Times for going after this story in a big way. I didn't like it's front pages last week, and I have a massive ambivalence to all Murdoch papers, but they're doing well on this one.


  1. Hi David,

    Found your blog via a Twitter re-tweet, and just wanted to say thank you for this post - I wholeheartedly agree. We had a similar session at my training college, with a guy who didn't quite say the same things as the person you encountered, but wasn't far off. Fortunately, having been Church Army for a number of years, I was already using a particular person for my tax return, so was able to let my peers know that there were other options available (something that was markedly absent in the presentation).

    Have added your blog to my 'favourites;' looking forward to future posts :)

  2. My father is a recently retired vicar and a few years ago had the Inland Revenue decide they would do a full audit on his tax return. He did it himself with the help of my brother who is an accountant.

    They spent months on it and had so much trouble working out how much tax he should actually be paying that they pretty much gave up, told him he'd done about as well as could be expected and passed it all.

    If the Inland Revenue have this much trouble, what chance has an ordinary vicar?

  3. "earning people have a responsibility to pay tax"

    I disagree, if you are referring to income tax. Of course we all have to pay some taxes, like VAT. But if the government has decided that, as a move towards social justice, lower paid people don't have to pay income tax, or that clergy among others can claim certain allowances, then there can be no responsibility to pay tax which the government is not asking for.

    It's a different matter of course if the tax avoidance scheme involves telling lies e.g. about whether one is employed. If that is legal, then the law is an ass.

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