The decision last week by the Prime Minister, the Chancellor, the Leader of the Opposition and the First Minister of Scotland to publish their tax returns is a watershed moment in British politics that could have an irreversible impact on public life says audit, tax and consulting firm RSM.
Commenting on events in Parliament this week, Sharon Omer-Kaye, office managing partner at RSM in Swindon said: “Although the Prime Minister made it clear that the decision to publish his tax return should not apply to all MPs – and by extension to those who run large public services or local government – the pressure for greater transparency at all levels may now be unstoppable.
“If a candidate standing for a local or national election decides to release details of his or her tax affairs, it will now be very difficult for the opposing candidate to refuse to follow suit for risk of appearing to have something to hide.
“The debate over who should be required to disclose their tax affairs and how much information they should provide is not clear cut. One of the difficulties is where you draw the line. If it’s right that a Prime Minister should disclose his or her tax affairs, shouldn’t the same apply to all elected politicians – and why not all public officials including street cleaners and refuse collectors? Should we even adopt a Scandinavian model where everyone can access everyone else’s tax returns? Certainly, such an approach would help restore trust in politics, remove barriers between different parts of society and potentially reduce the gender pay gap but there would be serious risks to consider.
“The current system of taxpayer confidentiality protects personal privacy in society and the disclosure of an individual’s tax affairs would further erode this privacy and increase the risk of identity theft or fraud. Many commentators have also raised the prospect that such transparency would encourage a new and unhealthy ‘politics of envy’.
“There is also a question on why the recent debate has focused exclusively on disclosing tax returns. A full disclosure would include a person’s wealth, assets and credit score – and why stop there when there are medical records, school reports or library fines to share?
“In Parliament this week, the Prime Minister indicated that full transparency would be a very big step for the country and one that should not take place without a long and thoughtful debate. That may be true, but those considering standing for office at any time in the near future would be well advised to get their tax affairs in order sooner rather than later.”
Pictured above: Sharon Omer-Kaye, office managing partner at RSM in Swindon