I wrote this blog back in the autumn for Stewardship and after it dragging its way through an approval process, I was told this week that they would not be publishing it due to ‘there being a risk concern that it might not land well with our demographic of supporters’.

I have no idea who that demographic is but I thought I would publish it here and see what you make of it. So, please get back to me…

‘Render unto Caesar’: What would Jesus say about tax avoidance?

This saying that appears in all three synoptic gospels, is routinely taken to be about paying tax. And therefore taken at face value, it automatically suggests that avoiding said payment is against Jesus’ teaching.

Well, maybe…

Maybe this is indeed simply a question about taxation: ‘since the Romans rule us, should we pay the taxes they demand from us?’ Of course, the fact that it is a group of Herodians (those heavily invested in Roman rule) and Pharisees (those who would, 25 years later, be in the vanguard of the uprising against Rome) should alert us to the fact that this probably has nothing to do with paying tax and everything to do with where our loyalties lie in a world of idols.

Because maybe if it was clear what was Caesar’s in this discussion, we would be in a better position to answer the question of whether tax avoidance is an option for a Christian. If Caesar rightly lays claim to part of our material wealth, then paying it to him as he demands is the right thing to do. But is this a simple, ‘Caesar demands 30%, so we pay it’ sort of a problem? And when translated into the modern world, where Caesar is a democratically elected government, what am I legally obliged to pay in tax and what can I legitimately avoid paying and still stay the right side of the law?

Tax systems in advanced western economies appear fiendishly complex. This is why there is a plethora of tax advisers, accountants and IFAs to help us manage our affairs. But for the majority of citizens, they are actually quite straightforward. We pay income tax on our earnings (supplemented by national insurance), we pay VAT on the things we buy, and we pay stamp duty when we buy a house. It’s not quite that simple because of other duties attached to purchases, but basically tax is a fact of life that doesn’t really trouble us that much.

How often does tax come up in everyday conversations? Are we aware of people complaining that it is too high? I leave out of this question Conservative MPs who are fulminating over record high levels of taxation imposed by their own government; the highest rates since the second world war. But are others complaining ? Maybe it’s the circles I move in but I rarely hear it mentioned over a pint after work.

There is one exception to this, however. A number of middle class people who are the home owning offspring of home-owning parents often cite the risk of losing a large chunk of their inheritance to the taxman. And they ask, ‘how can we avoid Inheritance Tax?’ The simple answer to this is that unless your parents are members of landed gentry or the fabled 1%, your chances of paying Inheritance Tax are vanishingly small. But avoiding it is something they pay attention to when tax avoidance more generally might never come up in conversation. In this they are egged on by the tabloids.

Indeed we Brits are generally content to pay our taxes and the only time it becomes an issue for us is when we’re deciding where to put our cross on a ballot paper. We Christians pay tax because Jesus told us to, an instruction reinforced by Paul, and something generally held to be sound Christian teaching almost everywhere.

So, why raise the spectre of tax avoidance? Because it is often seen as part of prudent tax planning, something we talk over with our IFA (if we have one), something we pay attention to when filing our tax return (if we have to). When my wife and I were renting out our house (as we were living in the manse that came with my job as a church minister), we were always keen as we filed our annual tax return to pay as little extra tax as possible, while making sure we were tax compliant.

So how’s a Jesus follower to navigate this tricky path? We will look a little more closely at what the Bible says, pause to think more broadly about Christian ethics, look at what the tax man in the UK expects of us and then return to the question, what would Jesus say about tax avoidance (if anything)?

So back to Jesus’ encounter with the Herodians and Pharisees in Matthew 22:15-22. This short tale is introduced by telling us that whatever transpires, his questioners intend to trap Jesus by what he says. In the end they are hoist with their own petard, possibly because his questioners have a denarius, an idolatrous coin that should have been changed in the outer courts of the temple into more acceptable currency.

The background to this story – and the one in Matthew 17:24-27, a humorous tale where Jesus pays the two drachma tax by getting Peter to fish for the money – is that these Roman taxes were only levied on conquered peoples, not Roman citizens. So both these stories have an edge of occupation to them which means that the issues under consideration are not simply about the rights and wrongs of paying tax.

In the temple, for Jesus to have answered with a simple ‘yes’ would have turned the crowd as well as the pharisees against him, and he would have found himself adopted by the Herodians as a champion of the occupation. Hence the story being more about allegiances in a world of competing loyalties.

But the tax point remains. And Jesus’ answer lands in our world as a rather more simple, ‘give the governing powers what they need to govern’. This way of reading it is reinforced by the story earlier in Matthew. There Jesus playfully talks about not causing needless offence. Perhaps Jesus is reminding Peter – and us – that working for cash to pay tax is the way the world works. Peter works to contribute to society; the miracle reminds us that it is God who ultimately provides. This is a Kingdom view of work: we do it because we’re created in the image of a working God, yet all we have comes from him. So, the story is like a parable; it makes us think about rights and responsibilities and how we live in and contribute to our community in way that points to values of the Kingdom of God and its king, Jesus.

If we take a step back, we see that Jesus is operating within a larger biblical story about money that has given rise to a general Christian economic ethic. That story can be summed up as the Sabbath Cycle. God placed his people in a land of abundance meaning that biblical economics is based on an assumption of abundance not scarcity (the root of contemporary economic thinking). Within that broad assumption, God tells his people to take one day off in seven, then one year off in seven, and then after seven cycles of seven years, to restore everything to their original owners, the jubilee. You can read about this in Exodus 23, Leviticus 25, and Deuteronomy 15.

Summing up how this way of thinking might land in our context, Old Testament scholar and ethicist, Chris Wright, suggests the cycle demonstrates that everyone should have stake in society; that because it was focused on individual families, it ensured that those families would remain viable; and that because the jubilee was every 50 years, it put a limit on the ability of money to appear to have eternal life: capital was not allowed to grow exponentially at the cost of individual family welfare[1].

Modern Christian ethical thinking relating to tax has argued that it replicates this social safety net by taxing all citizens according to their means so that a measure of redistribution can take place from the better off to those struggling to get by. The strong Christian ethic of equality underpins this as seen in 2 Corinthians 8 and the Beveridge Report that led to the welfare state in 1948.

Redistribution of wealth through progressive taxes is not, course, the only reason why governments need money. Advanced industrial societies require police forces and armies, health systems and infrastructure. For the last century and a half, it has been seen that these are best provided by democratically elected governments raising taxation from its citizens.

Exeter University ethicist Esther Reed says,  ‘Early Christian thinking was shaped in an environment where taxes were oppressive and administered rapaciously. Taxation was a sign of subordination and oppression.’ In tracing the development of tax systems in the West, she argues that biblical and Christian thinking has increasingly shaped our understanding of tax and its purpose, leading to the oft-quoted axiom that ‘taxes are what we pay for a civilised society’[2].

John Bell of the Iona Community told a Greenbelt audience in 2022, ‘It is a privilege to have enough money to be able to pay tax. I would give more if it would be used for the common good, to feed the poor, house the homeless, and care for asylum-seekers.’[3]

More broadly, Esther Reed says, ‘Christian people have always been obligated to ask about how money is acquired and used: the purpose of property-ownership, trading practices, notions of value, the meaning of money, and more, in ways that prioritise concern for the poor and disadvantaged. While no single Christian policy on tax can be pieced together from biblical texts, the evangelical imperative to “give back to God the things that are God’s” (Mark 12.13-17) is encountered not only in the personal realm but also the realm of civic obligations.’[4]

And the idea that in paying tax we are giving to God what is his is deeply rooted in the Old Testament understanding that we are only tenants in the land, that we are God’s stewards using the resources he supplies for the good of our neighbours. So Christian theology and His Majesty’s Revenue and Custom agree, namely, that we should pay our tax.

But is it really that simple? In one sense. If the taxman asks, then for love of neighbour, as Paul puts it in Romans 13, we pay. However, it is not that simple because the UK tax system is, on closer examination, anything but simple, with allowances walking hand-in-hand with tax demands and legitimate ways of not paying being written into the legislation.

So, for example, if I buy an ISA, I avoid tax on the interest accruing to my account. Why? Because the legislation says so. If I sell my primary residence and use the money for another residence, I pay no Capital Gains Tax even though my house has risen in value tenfold since I bought it. Why? Because the rules applying to CGT say so. If I am a company boss and I buy a new machine for my factory, I can write the value of the machine off against my corporation tax bill. Why? Because the legislation says so.

And, of course, many of us give to charity using gift aid. This is where we pay the tax but the charity is allowed to claim it back. It boosts our giving by 25% at no extra cost to us. HMRC rules not only allow this but positively encourage it.

None of the above examples are tax avoidance, they are tax compliance; they are allowed under the rules set by parliament and policed by HMRC. Tax avoidance, in the words of the HMRC, ‘involves bending the rules of the tax system to try to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce this advantage. It involves operating within the letter, but not the spirit, of the law.’[5] They also point out – somewhat loftily – that such schemes rarely work.

So taking a tax allowance is not tax avoidance and neither is failing to declare taxable income; that is tax evasion. As the quaker economist Richard Murphy puts it, ‘tax avoidance is the activity that takes place within the grey space between being tax compliant, where a person specifically seeks to comply with tax law, and tax evasion, where they specifically seek to break that law’[6].

When it comes to estimating how big a problem tax avoidance is, agreement is hard to find. The tax gap – the difference between what the government should collect and what it actually does – is variously estimated at between £35bn and £100bn annually. The latter figure is an attempt by tax justice campaigners to estimate how much is lost because of assets/income held in off-shore tax havens. A recent Financial Times article suggested that UK residents held £850bn worth of assets overseas, of which £570bn were in tax havens. But HMRC has no idea whether any tax is owing on these funds. This is why the figure for the tax gap varies widely.[7]

HMRC reckons that of the £35bn (which is 5.3% of tax liabilities), £1.5bn is down to tax avoidance and £5.3bn down to evasion which begs the question about the other £27bn unaccounted for! On these numbers tax avoidance is a minor problem. This is unless the assets held overseas are held in a way to avoid UK taxes, in which case the total avoided could be nearer £200bn and that is big hole in the government’s coffers, a large sum that cannot be spent on public services and redistribution from the richer to poorer sections of society.

Which just leaves to ask whether Jesus has anything to say about tax avoidance. To which the answer is ‘yes’ and ‘no’! He was not asked about tax avoidance, only about paying tax. His answer – supported by Paul and the whole thrust of the Old Testament – is yes, we should give what we owe to Caesar. He says that this is so we do not cause others to stumble (in Matthew 17) to which Paul adds that we should pay because it shows our love for our neighbour, our commitment to the common good.

The Christian understanding of the common good flows from the summary of the law given by Jesus – to love God and love our neighbour; a summary taken up by Paul in Galatians 5 where he says that love of neighbour is the fulfilment of the Law. A short-hand way of exploring how this works in the world of politics, economics and community engagement is to talk of the common good. There are good introductions to this in the writing of Luke Bretherton and Nick Spencer.[8]  

But I wonder if paying up is enough. It’s one thing to pay because we have to, because the tax man demands it of us, and indeed removes it at source in the case of income tax and national insurance or includes it in the cost of goods and services in the case of VAT and excise duties. In a sense we don’t pay it willingly, it is taken from us whether we like it or not.

I wonder if Christian teaching – and the voice of Jesus is – urging to go further than this. If we believe in a society that genuinely works for the good of all, then maybe we should be talking more positively about tax, exploring ways in which it might be more fairly levied across the income bands. Mybe we should think about whether CGT and income tax are levied at the same rates and that CGT allowances are severely curtailed; maybe we should be exploring whether those who live on investment income and rents pay the same level of tax as those who rely on income from employment, including NI payments; maybe we should thinking about taxing assets more fairly than the current system does.

So the question is not really, can a Christian justifiably engage in tax avoidance? It is rather how can we be involved in the promotion of a fairer and more productive tax system that genuinely builds the common good? I reflect on this in my chapter in Jesus & Justice, a new book from Red Letter Christians UK, which is called, ‘Can we Tax our way to Justice?’[9] The implied answer is obviously ‘no’, but it is a good place to start.

---

[1] Christopher J H Wright, Old Testament Ethics for the People of God (Nottingham: IVP 2004)

[2] Tax for the Common Good: A study of tax and morality (Christian Aid 2004) quoted in Clare Bryden, ‘Tax for Good: Zacchaeus as Social Reformer’ Church Times 30 September 2022.

[3] ibid

[4] ibid

[5] HMRC website

[6] Richard Murphy’s blog

[7] Emma Agyemang Financial Times, May 29 2022

[8] Nick Spencer, Doing Good: A Future for Christianity in the 21^st Century (Theos 2026). Luke Bretherton, Christ and the Common Life (Grand Rapids: Eerdmans 2019), especially Part 2

[9] Simon Jones (ed) Jesus & Justice: Stories of Radical Christian Living (London: RLCUK, 2024) p191-200