On Monday, via the BBC, the Treasury put out the line that ‘10 per cent of those earning more than £10 million a year pay less than 20 per cent in income tax.’ It was not explained, or asked by the BBC, how this could be, or how many people were involved. Even in the era of preposterous bonuses, the number of people registered as earning more than £10 million p.a. is, I discover, only 200. So 10 per cent of them is 20 people: the total sums involved cannot amount to much more than £100 million, probably less. In the context — the decision to cap the amount of tax relief on charitable donations — the line was irrelevant. The government, represented by the unfortunate Treasury minister David Gawke, is trying to shift its ground. It now tacitly admits that avoiding income tax by paying to charity does not make the rich richer, since they have to pay much more to charity than they can reclaim against tax. Instead, it seeks to develop a new doctrine that rich people must pay tax, rather than giving away their money to good causes in other ways, because this is ‘fairer’. Perhaps there is a respectable argument somewhere in here that taxes should be borne by all, but it seems flatly contradictory to the idea of the Big Society if people’s personal efforts at direct, individual philanthropy are to be curtailed in favour of HMRC. The whole country is now bewildered about what this government actually thinks about the use of riches.
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The tendency of the Treasury to sidle up to individual tax examples and quote them in public is new, and not good. These figures about top earners were put out by the Treasury as ‘background’, in a self-contradictory attempt not to draw attention to the people involved.
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