Scarcely a week goes by without calls for higher taxes on the most profitable companies, the highest-earning individuals and the wealthiest families. However, the UK government seems to have little appetite for introducing new taxes. Among other things, this reflects concerns that early tax increases could damage economic recovery from the pandemic, while also prejudicing support for the government.
In both UK and USA, groups of wealthy individual taxpayers are offering to pay more tax as an expression of their patriotic duty and concerns about social inequality. There have also been suggestions that, during the first wave of the pandemic, almost one half of UK employees were prepared to personally pay a little more tax to help restore the nation’s finances and boost the NHS.
Cynics may judge offers to pay extra taxes voluntarily as virtue-signalling of the worst kind; ‘tax-washing’, if you will. Nevertheless, they should remember that the UK has a long and stable tradition of philanthropy. According to the Charities Aid Foundation, charitable giving is continuing at around £10bn per year. It’s entirely possible, therefore, that people who are volunteering to pay more tax are completely sincere in what they say.
If they are sincere, then I have good news for them: the government makes it easy for any UK-resident individual or UK-registered business to make voluntary payments to HM Treasury. Although gifts cannot be ring-fenced for a specific purpose or assigned to a specific area of public spending, donors can decide whether they wish to make a donation towards general public expenditure or to reduce the national debt.
To donate towards general public expenditure, all that is required is a simple email to the Treasury providing basic information. The donor must also acknowledge that they cannot request a refund of the donation once it has been made. They also have to confirm that the monies are theirs to give and are not the proceeds of crime, money laundering or other illegal activity. The Treasury then provides details of the bank account and reference to be used. It could hardly be simpler.
People wishing to contribute to the reduction of the national debt embark on a similar, simple process with the UK Debt Management Office.
It sounds like the perfect recipe doesn’t it? The government needs more money. There seems to be no shortage of people who say they are prepared to pay extra taxes. And, since 1823, the government has operated a simple mechanism to collect these amounts. What could possibly go wrong?
But something is not working. The accounts of the Debt Management Office for the year ended 31 March 2020 show that it received donations or bequests totalling just £48,957. While that’s a large percentage increase on the £11,069 received during the year ended 31 March 2019, by any standards these figures are tiny.
So, what’s happening? Is government to blame for not publicising the arrangements, with the result that potential donors are unaware that they can make voluntary payments? Or, in a country which has a long and strong tradition of supporting charities, do donors trust charities more than they do the government? Certainly, donations to a specific charity allow the donor to support a favoured cause, rather than paying money to the Treasury for the government to use as it wishes. Or is it the case that, as the cynics argue, some of those who are volunteering to pay more taxes are doing no more than virtue-signalling?
Scarcely a week goes by without calls for higher taxes on the most profitable companies, the highest-earning individuals and the wealthiest families. However, the UK government seems to have little appetite for introducing new taxes. Among other things, this reflects concerns that early tax increases could damage economic recovery from the pandemic, while also prejudicing support for the government.
In both UK and USA, groups of wealthy individual taxpayers are offering to pay more tax as an expression of their patriotic duty and concerns about social inequality. There have also been suggestions that, during the first wave of the pandemic, almost one half of UK employees were prepared to personally pay a little more tax to help restore the nation’s finances and boost the NHS.
Cynics may judge offers to pay extra taxes voluntarily as virtue-signalling of the worst kind; ‘tax-washing’, if you will. Nevertheless, they should remember that the UK has a long and stable tradition of philanthropy. According to the Charities Aid Foundation, charitable giving is continuing at around £10bn per year. It’s entirely possible, therefore, that people who are volunteering to pay more tax are completely sincere in what they say.
If they are sincere, then I have good news for them: the government makes it easy for any UK-resident individual or UK-registered business to make voluntary payments to HM Treasury. Although gifts cannot be ring-fenced for a specific purpose or assigned to a specific area of public spending, donors can decide whether they wish to make a donation towards general public expenditure or to reduce the national debt.
To donate towards general public expenditure, all that is required is a simple email to the Treasury providing basic information. The donor must also acknowledge that they cannot request a refund of the donation once it has been made. They also have to confirm that the monies are theirs to give and are not the proceeds of crime, money laundering or other illegal activity. The Treasury then provides details of the bank account and reference to be used. It could hardly be simpler.
People wishing to contribute to the reduction of the national debt embark on a similar, simple process with the UK Debt Management Office.
It sounds like the perfect recipe doesn’t it? The government needs more money. There seems to be no shortage of people who say they are prepared to pay extra taxes. And, since 1823, the government has operated a simple mechanism to collect these amounts. What could possibly go wrong?
But something is not working. The accounts of the Debt Management Office for the year ended 31 March 2020 show that it received donations or bequests totalling just £48,957. While that’s a large percentage increase on the £11,069 received during the year ended 31 March 2019, by any standards these figures are tiny.
So, what’s happening? Is government to blame for not publicising the arrangements, with the result that potential donors are unaware that they can make voluntary payments? Or, in a country which has a long and strong tradition of supporting charities, do donors trust charities more than they do the government? Certainly, donations to a specific charity allow the donor to support a favoured cause, rather than paying money to the Treasury for the government to use as it wishes. Or is it the case that, as the cynics argue, some of those who are volunteering to pay more taxes are doing no more than virtue-signalling?
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