Comment: Paying cash and dodgy offshore schemes: the effect is the same

Are you a tax avoider?

If you have ever paid a tradesman in cash then you’ve been complicit in avoiding a tax bill, according to Treasury Secretary David Gauke. “It is morally wrong,” the minister said yesterday.

His views are part of a renewed crackdown on tax abuse after it was revealed that the comedian Jimmy Carr, below , and other celebrities had used “aggressive” tax avoidance schemes.

Many have employed dodgy offshore schemes where their earnings disappear and then they are given a loan which, oddly enough, never seems to be repaid.

The net effect is that they pay tuppence ha’penny in tax, rather than the hundreds of thousands that someone earning their salary should stump up. I hate to agree with a member of the Coalition, but Mr Gauke is right to slam the schemes, as he did in a speech yesterday. “They undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride,” he said.

He reckons the public purse is short of about £5bn because of the actions of a few wealthy entertainers and their advisers.

He’s promised to go after the tax advisers who promote such schemes. It shouldn’t be difficult to track them down — one expert told me yesterday there were less than 100 firms pushing the questionable dodges.

But is he also right to go after tradesmen — plumbers, decorators, electricians and so on — who keep their financial affairs simple by keeping payments “off the books”?

After all, the odd few quid here and there on which tax isn’t paid isn’t going to make that much difference, is it?

Well, yes it is. Mr Gauke reckons the black economy costs us about £2 billion a year in lost tax.

That’s simply too much money to wave away with a knowing wink and a smile.

We all hate paying tax, but no one has the right to avoid it.

We do need a crackdown on all tax avoiders. But we also need a simplified tax system to close the loopholes.