Let’s be clear, tax avoidance is permitted, but tax evasion is not. We have all seen the way in which our National Debt has soared. In the current tax year many of us will experience some financial discomfort as result of tax increases and allowance reductions or restrictions. Perhaps it may be odd to say it, but I am not someone that thinks tax is a bad thing, although I would certainly suggest the amount, how the tax is raised and how it is spent needs an awful lot better thought and application. Indeed part of my job is to help clients reduce their tax bill – legitimately. Invariably the sort of tax avoidance that financial advisers like myself do are really a little bit of a gimmick to encourage people to save for their own benefit.

So I hope that I have been clear, I am in favour of tax and also in favour of avoiding tax. It sounds like a contradiction and it is in part. However, what I am not in favour of is tax dodging where multinationals effectively move money around from one tax haven to another in order to reduce their declared profit and as a result pay considerably less tax (if any). This damages poor countries by not remitting the revenue that they are rightly owed. This makes it harder for them to get out of poverty. It also damages our country. Indeed tax doding makes benefit fraudsters look like decidely small fry. As a result of lower tax revenues and the public finance commitments, more tax is needed for UK plc to cope, so the effect is (cuts aside) that more taxes are required, whether these are obvious or not. Politicians merely do there best to move the chairs around, we all know this, but it seems that it is rarely stated. I may be naive, but surely a better way to world peace is to ensure that we all prosper together.

I know of no reasonable person that deliberately makes efforts to keep the worlds poorest in poverty. A poverty that we are rarely exposed to, thankfully. However, unless reasonable people take action, fairly unreasonable things will continue. That is why I am involved with the Christian Aid “Trace the Tax Campaign“. I know that the world is a complex place, I know that we as investors are all seeking good returns and that we often hold shares within funds of companies that have some fairly nasty practices. I’m aware of my own hypocrisy’s. However I don’t think that doing nothing is an option. Have a look at the video and if you feel able, join the campaign. Its not about creating some sort of radical communist ideal, but about giving the poor a chance to get out of poverty and attain some dignity.

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