The coronavirus pandemic must finally create a society where it’s wrong not to pay your fair share

After coronavirus, when governments need their money back, you can say goodbye to tax havens. The very richest will need to be squeaky clean or risk being shunned and loathed, writes Chris Blackhurst

Even before corona struck, the pressure to try and bridge the inequality gap was intense. With the outbreak, it has ratcheted up several notches (AFP/Getty)

We are living in rapidly changing times. This week saw publication of the annual Sunday Times Rich List with its attendant media blitz. The wealthy, though, were also making other headlines, and for all the wrong reasons.

Matalan founder John Hargreaves is bringing a legal action against his accountants PwC for what he maintains was poor advice that he could relocate to Monaco, thus avoiding £200m in capital gains and income taxes on the sale of shares in the business. He maintains PwC also said he could continue to work at the company’s Liverpool head office three days a week and sleep at his UK house. PwC is resisting the claim.

Accompanying this news was Hargreaves’s appearance in the Rich List, at £550m. There was another piece of information, too, that Matalan has furloughed more than 11,000 staff, as well as deferring tax and national insurance payments and accessing the 12-month business rates exemption worth over £40m. The retailer has also asked its lenders to borrow £50m as part of the Covid-19 large business interruption loan scheme, which sees the government guarantee 80 per cent on each bank loan.

The connections were stark. Here was a multimillionaire openly stating he was intending to avoid paying tax by basing himself in Monaco while benefiting from the emergency taxpayer-funded bailout scheme.

Then there was Steve Coogan. The millionaire comedian and actor furloughed the gardener and housekeeper at his country home. He thus joins a roll call of rich celebrities and business owners outed for taking advantage of the government’s furlough payments designed to protect businesses that can’t operate during the pandemic.

Where once society would turn something of a collective blind eye, or at least remain relatively quiet, when the rich avoided tax or dipped into the public purse that moment has passed. Put simply, it’s a giant black mark today to be seen to be greedy, to not pay your fair share, to not give something back.

The Rich List is a case in point. When the ranking first started, the super-wealthy shunned it. They did not want people knowing the size of their fortunes. Then, as the publication took off, crowd psychology took over – they actively sought to be included for fear of not being regarded as that rich or of not having made their money legitimately and visibly.

I can think of one well-known media baron who would carry around a crumpled cutting of his entry in his jacket breast pocket as some sort of calling card. Another duo, in property, would rail for years about not appearing, maintaining they merited inclusion and were being unjustifiably maligned as a result.

It will mean, too, that anyone found to be attempting to lessen their dues can expect to be pilloried, their reputation badly tarnished, their business ostracised and frozen out of government work

Of course, there has been sniping as to the table’s accuracy. It’s true that some of those adorning its pages like to boast the total against their name is far too low, that they’re much richer than that. Likewise, there are some where questions are raised as to whether they should feature so high or even if they should be in the guide at all. To be fair to the compilers, though, theirs is a difficult and arduous task, and the survey, certainly in the absence of anything else remotely comparable, has come to be regarded as a reasonable assessment.

Increasingly, however, the eyes are drawn to a sub-ranking within the main event. This is the Giving List. Tucked away inside, it positions those on the Rich List according to the proportion of their wealth they donate to charity. This year’s Giving List was topped by the Sainsbury family, worth an estimated £512m and paying £170.8m, or 33.36 per cent of that fortune, to various beneficiaries, mainly to arts, education, humanitarian and heritage causes. They’ve been doing their bit in the crisis, providing extra funding to food banks and a food distribution charity.

Even before corona struck, the pressure to try and bridge the inequality gap was intense. With the outbreak, it has ratcheted up several notches. The state requires more cash; while the plight of charities, which have seen their incomes crash, is desperate.

What does this mean? That arguments for wealth taxes on individuals and businesses will grow ever louder. That tax havens will come under scrutiny across the world like never before (the fact that many of the most prominent are British dependencies will not go unnoticed). That governments will look hard at their contracts and award them only to those who pay up. That philanthropy will be regarded as essential, and to a level that is meaningful and substantial.

It will mean, too, that anyone found to be attempting to lessen their dues can expect to be pilloried, their reputation badly tarnished, their business ostracised and frozen out of government work. To be caught not participating will make you a pariah. Where personally you might have been able to rely on the understanding of your peers, or support from a favourable media, or reassurance from those politicians you voted for and may even have supported financially, now you will find a resounding silence or worse, criticism and alienation. Invitations will dry up, your voice won’t be heard, you won’t be welcome, you can forget about an honour.

Where would you rather be: shunned and loathed or popular and well-regarded? Quick. You really must make up your mind, because you have not got long.