‘Shares for Rights’ highlights politicians are disingenuous on tax mitigation ‘clampdown’
The coalition government’s new ‘Shares for Rights’ tax policy clearly shows that it is acting disingenuously over its supposed ‘clampdown’ on tax avoidance, better referred as ‘tax mitigation’ – which, it must be remembered, is completely legal and an established and integral part of financial planning for individuals and companies. After all, we should all pay the tax required by law – and no more.
In last week’s Autumn Statement, the Chancellor, George Osborne, officially announced the scheme which, essentially, gives employees shares worth anything between £2,000 and £50,000 in return for surrendering rights on redundancy, maternity leave, time off for training, and unfair dismissal, amongst other ‘gold-plated’ employee benefits.
The government hopes that ‘Shares for Rights’, one of the centre pieces in Osborne’s party conference speech in October, will encourage firms to hire staff.
However, it will, evidently, also encourage people to actively consider tax mitigation practices as it has emerged that firms will be able to give selected workers tax-free shares worth up to £50,000, without taking away their employment rights. These shares, therefore, have a complete tax advantage and could, according to the Office for Budget Responsibility, open up a £250 million tax loophole.
This at a time when MPs are literally clamouring to get on to prime time news programmes in order to condemn unquestionably legal tax mitigation policies and after a committee of politicians (the Public Accounts Committee, led by Margaret Hodge MP) publicly hung a handful of high-profile companies out to dry, including Starbucks, Google and Amazon, for reducing their tax burdens in accordance with the law.
It smacks of hypocrisy and cynicism that politicians whip up a misguided media storm against such firms, destroying their vitally important good will, and then – just days later – confirm that they are to introduce additional policies which will encourage more of us to mitigate tax.