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Christian Aid response to tax avoidance scheme media coverage

10 July 2014 - Christian Aid has this week found itself part of a widely reported media story about an aggressive tax avoidance scheme used by top businessmen, celebrities, QCs, NHS doctors, political party donors and a judge.

We became involved after The Times newspaper asked us to comment on the fact that one of those that had used the scheme was pop singer Katie Melua, who was nominated some years ago for one of our Tax Superhero awards because of positive remarks she had made about her willingness to pay tax.

In response to The Times’ story, we expressed our ‘disappointment’ that she had been connected with the scheme, adding however, that according to The Times, her investment was made at the suggestion of her accountants and she had subsequently repaid the tax.

On social media, some have responded by stating that Christian Aid is itself tax-exempt. Our activities generally don't generate taxable profits, hence there is no tax to pay.

And unlike most in the corporate sector, the 20% VAT on goods and services we buy is not recoverable because we have no products that we sell.

It's also worth noting that none of our employees are exempt from tax, regardless of the country they are working in.

So what’s the tax benefit of being a charity? Most obviously, the Gift Aid that we recover on public donations, so a donation of £50 from an individual becomes £62.50. But that doesn’t make us tax exempt.

Our tax campaign does not target particular individuals, but is aimed primarily at tax strategies used by multinational corporations and other companies trading across borders which we estimate cost poor countries some $160bn a year in lost tax revenues, and there's a crucial difference between using a tax system and laws as they are intended to be used, and using loopholes in the law to avoid tax that should have been paid.   
 
We have actively campaigned in recent years for measures that would introduce far greater transparency in tax matters to counter the way in which tax havens assist companies - and individuals - to hide their assets off-shore.

Read a statement about Christian Aid, taxes and Gift Aid

 

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