Minister: cash in hand is wrong

Ben Southwood
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TREASURY minister David Gauke declared yesterday that cash in hand payments are morally wrong, during an event at a Westminster think-tank.

In the speech to Policy Exchange, Gauke outlined plans to toughen up oversight of tax avoidance schemes, including measures that could see the government name and shame advisers that help their clients who aggressively reduce tax bills.

He also came out against the common practice of paying certain workers cash in hand, arguing that they cost society as a whole.

Gauke brought the government closer to an official definition of tax avoidance, ruling out use of ISAs, gift aid, capital relief, and sanctioned tax breaks.

Both Trades Union Congress (TUC) secretary Brendan Barber and the Taxpayers’ Alliance (TPA) said that more emphasis should be put on filling in tax loopholes, rather than a narrow focus on attacking individual advisers or their clients.

“As well as targeting aggressive tax avoiders, ministers must cut this multi-billion pound problem off at source by closing the many loopholes that the super-rich exploit,” Barber claimed.

“It is incumbent on the government to act to reduce tax avoidance by simplifying the hideously complicated tax system and abolishing the legal loopholes in place,” echoed the TPA.

The TPA added: “Contrary to Mr Gauke’s belief that tax advisers are the ‘root cause’ of the tax avoidance problem, the true root cause is the tax system itself... The tax code is broken and bursting at the seams under the weight of over 17,000 pages of rules.”

Part of Gauke’s speech stressed the fact that the rich pay large tax bills, contrary to many popular views – the top one per cent of earners account for 26 per cent of all income tax receipts, while over a tenth of all receipts come from just the top thousandth of earners, Gauke said at the event.