Amazon: Time for the Welby Effect?

If you earn money from a community, you should pay your share of tax to that community. I was in business, and I know that, within limits, its right and proper for people to arrange their tax affairs, and for companies to do so. But when vast companies like Amazon, and other online traders, the new industries, can get away with paying almost nothing in tax, there is something wrong with the tax system. They don’t pay a real living wage, so the tax payer must support their workers with benefits. And having leached off the tax payer once they don’t pay for our defence, for security, for stability, for justice, for health, for equality, for education. Then they complain of an undertrained work force, from the education they have not paid for, and pay almost nothing for apprenticeships. Those are only a fraction of the costs of aggressive tax management.

Mary spoke of the God who gave us Jesus as the one who “has shown strength with his arm;

He has scattered the proud in the thoughts of their hearts.

He has brought down the powerful from their thrones,

And lifted up the lowly;

He has filled the hungry with good things,

And sent the rich away empty”.  

From Justin Welbys speech at the TUC conference yesterday. (Btw, he very cleverly tackled the anti-Semitism debate within Labour too, see if you can spot it)  Welby's comment about doing Wonga out of business in 2013 was followed by a series of revelations and disasters at the company. Amidst an avalanche of complaints, Wonga went into administration a few days ago. 

Biblical prophecy operates on the basis that as the prophet speaks God's message and God's verdict on human institutions, the act of speaking it out helps to bring that verdict into being. It may be my fevered imagination, but it has been downhill for Wonga ever since Welby publicly took them on. 

Amazon has so far remained untouched by every criticism and every revelation about its appalling record in paying tax. Will we see the Welby Effect on Amazon? Lets hope so. 

Two Secrets

Another day, another statement from David Cameron, unveiling another 3% of the reality about his tax and investment arrangements. With more information promised, DC today admitted he could have handled things better. Being in public life is tough, you don't get to choose which bits of yourself or your life to present to the public. But the dribble of information, rather than a full and frank disclosure, looks like an attempt to conceal a secret, even if it isn't.

Justin Welby recently learnt, and today revealed, that his biological father is not the person he'd always thought it was. It's a deeply gracious statement, and I love the restatement of the core of his identity - I find who I am in Jesus Christ, not in genetics, and my identity in him never changes. God can turn a mistake into an Archbishop, and death into resurrection. 

I've no idea how you think straight, let alone come up with the right thing to say in public, when you and your family are being sifted in the national media. My response would probably be closer to David Camerons than Justin Welbys - though the ABC has had a bit longer to digest the news and work out what to say about it. Under pressure, many of us are hedgehogs - curl up into a ball and wait for it to go away. Like Justin Welby's mum, a remarkable woman, we need a power greater than ourselves to help us face reality and overcome our weaknesses.  

Justin Welby on Wealth, Tax, Sin and Business

"I'm strongly in favour of the creativity of wealth and jobs and risk taking and all that goes with that," 

"[But] with wealth comes power and with power comes a temptation to misuse power. There's a reality of the human condition, which Christians call sin, what the Bible calls sin - don't misuse the power you have through wealth."

"But you don't throw the baby out with the bath water and say that business is bad, you say that there needs to be solidarity and that there needs to be a regulatory framework that does not allow the abuse of power but gives the freedom for creativity."

Justin Welby, interviewed by the BBC in advance of a speech this evening on the economy.

There's also a prod at the whole Boots boss/taxes saga 

"There has always been the principle that you pay the tax where you earn the money. If you earn the money in a country, the revenue service of that country needs to get a fair share of what you have earned."

update: here's the full text of the speech. 

update 2: the CofE's daily news digest has links to the media coverage of the speech, 

The 12 Tax Dodgers of Christmas

Ht 38 Degrees. High res version of this pic available for posters etc. here

#PreOccupy Starbucks Announce New Starbucks Price List, Tax Adjusted

The revelation that Starbucks, a company so successful in the UK that it plans to open 100 new outlets in the next 5 years, has paid hardly any corporation tax, probably isn't surprising. But as a coffee shop devotee, it's led to a bit of recalculation at OpVic Central. The Corporation Tax rate for the current UK financial year is 25%, so 25p in the pound of all the profit they make from us, the customer, should be going to HMRC.

It doesn't. Starbucks has tried to justify itself on other grounds - job creation, VAT contributions (which we pay, not them) etc. But it's clear that profit is being made, otherwise they wouldn't be expanding. It's just recorded elsewhere in the supply chain so that it doesn't appear on the UK operations balance sheet.

So I can now announce #PreOccupy Starbucks, a grassroots consumer protest movement. The principle is simple. Pay only 75% of the price of anything you buy at Starbucks, and if they take issue with you, explain that you're making your contribution to them in other ways: smiling at the staff to raise morale, reducing the heating bill due to your body heat contribution to the building, making the place look fuller than it otherwise would.

The aim of #PreOccupy Starbucks is to create an even bigger queue than normal, thus adding to public nuisance, annoying the staff, but not actually achieving a great deal in practical terms. We felt this would give us a sense of common identity with Occupy movements elsewhere.

In case the maths is a bit tricky, here are some of the revised prices.

Americano: Instead of paying £3, pay $3

Grande Skinny Fairtrade Offshore Espresso £2.63 instead of £3.50

Irregular Mockery (replacing Regular Mocha) £2.24 instead of £2.99

Iced Latte Fatty Catty £1.87 instead of £2.50

If this doesn't bear much resemblance to your local, that's because Starbucks don't publish their prices on their website.

In the meantime, perhaps this is the answer (source):

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.

VAT on Church Buildings: The Bargaining Position

With growing opposition to George Osbornes imposition of VAT on church repairs, (petition here), here are some face-saving alternatives for a government climb-down.

1. Church acceptance of the VAT hike, in return for the outlawing of the Victorian Society, and any other heritage society which sees the church building primarily as a period piece museum rather than a house for a living worshipping community.

2. Church backing for the proposal, as long as VAT is also levied on ice cream, frozen peas, and food products that have to be sold below ambient room temperature. After all, most churches are below ambient room temperature as well.

3. Church backing for the proposal, in return for the government assuming full legal liability for any injury or death caused to people by bits falling off church buildings due to a shortfall in the maintenance budget.

4.  Keeping zero rated VAT on repairs, but applying VAT instead to uncomfortable pews, copies of the 1928 prayer book, singing of 'Jerusalem' or 'I Vow to Thee My Country', and surplus members of the House of Lords. This will raise the same amount in the short term, as well as providing a financial incentive for the church to clear out a few bits of dead wood. Literally, in some cases.

5. On the 'no taxation without representation' principle, scrap the tax hike but instead introduce an annual levy on the Church of England based on its level of representation in the House of Lords, multiplied by the absenteeism rate of the representatives themselves. Again, this would incentivise change: a current coefficient of 26 x 95 is much less affordable than, say, one of 6x50. Or, mimicing Conservative party practice, the CofE could auction off the 26 places in the Lords at £250k a throw and pay corporation tax on the proceeds.

6. Instead of a VAT increase, levy a 'Tat Tax' on Cathedral merchandise. This will raise much more money, mostly from tourists and foreigners, as well as discouraging Cathedrals from selling large quantities of fudge, teatowels and stick-on stained glass imitation plastic.

7. Only levy the VAT increase on those places of worship which charge for entry.

8. A freeze on any progress in the governments move to replace local council education departments with the CofE (among others) until the increase is reversed.

there, I'm sure most of those make economic sense. By this time tomorrow Vince Cable will be proposing one of them on Newsnight. Watch this space.....

The Listed Buildings VAT Protest Song

This very clever song/vid has just gone up on the CofE website, linked to the online petition against George Osbornes hike in VAT on listed buildings. Work o nWakefield Cathedral has had to be stopped because the new VAT rules have raised the bill by £200,000.

Memo to the government: either reverse the VAT change, or relax the planning rules so that churches have more of a free hand to do what they need to do with ancient buildings, rather than being held hostage by heritage societies and listed status.