Sunday, 4 November 2012
Fair Competitive But Tough Tax!
This week we have seen in the news several companies highlighted as either paying zero UK tax or a significantly lower tax rates compared to other UK companies. (Apple and Starbucks are two major examples)
At a time when we are clamping down on benefit fraud and refocusing the welfare system to encourage everyone to work and pay their fair share we as a conservative lead government have to ensure big business is not exempt from this approach.
As a party we have been quick to talk about being "all in this together" a phrase and approach I am sure Margaret Thatcher her self would relate to and one I very much support. But the time has come to put this into action. If we are to win the General Election in 2015 we must start to show the public that not only do we not believe in freeloaders at the bottom of the system in terms of benefits etc but that big business will not be given a free ride when it comes to a fair and competitive UK tax system. I fully believe in the concept of relieving the burdens of a high tax system from business to help them grow and support the UK economy but this does not stretch to allowing companies to avoid the system all together not contribute their fair share compared to other UK businesses and in effect gain an unfair advantage within the UK marketplace in terms of overheads.
This is why the time has come to introduce a "UK transaction tax" for all businesses trading in the UK. This would be linked to UK revenue and be specifically offset against corporation tax paid by companies to ensure there is no overall increase in the tax rate paid by business but to ensure no business operating in the UK has an unfair market advantage by finding loopholes within the current tax system. On top of this all penalties for tax evasion should be trebled to help reinforce the message that we all need to pull our weight if we are to get through the tough economic times we face.
Whilst demonstrating to the public that we are not in the pockets of bankers and big business through this approach we also need to ensure we have a tax system that remains competitive and encourages growth and investment in the UK, this is why along side this proposal we should announce the removal of the 45p tax rate. This proposal would help to show the UKs commitment to a fair and competitive system of taxation, along side our new tough approach to ensuring everyone pays their "fair share".
To further support hard working families we should move quickly to link the base rate of tax directly to the minimum wage through a "fair tax mechanism" linking the two rates through a statutory provision. This will help take some of the poorest families out of tax all together in the UK and helping to demonstrate our support for hard work and aspiration.
As part of this review of the UK Tax system we should look to introduce "volunteering tax relief". This would allow every adult resident in the UK to offset up to the equivalent of 5 hours worth of taxable pay a week against volunteering they have participated in within their community. In order for this to work I propose that this is introduced linked to activity such as being a School Governor, NHS Governor, Charity Trustee and other registered positions however extending the scheme to some type of registered activity could also be trialed at a later date. This would help give real value and meaning to the "big society" and again demonstrate the philosophy of reward for hard work and community responsibility and help generate more volunteers to help drive the big society agenda forward, taking more local services back into the hands of local communities.
As conservatives we need to be on the side of hard work, aspiration and fairness and not simply be blinded by academic dogma and political theory. If we don't ensure we stay connected with the public, support,and develop our communities and demonstrate that we are all truly all in this together, then Conservative MPs will be sat on the opposition benches in 2015 and all the principles in the world won't be able to do anything about it!