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February 16, 2015

Big Four tax competition awards bestowed on university students

By Isabella Grotto

PwC UK has split the top prize for its student tax reform competition, awarding each of the two winners, Richard Cha and Jamie Parker £10,000 ($15,400) in prize money. Runners-up Moira Chadwick and Ryan Gwinnett each received a prize of £1,000.

The competition asked students in full-time higher education to submit a 2,000 – 3,000 word proposal essay addressing the question: "How would you change the UK tax system to improve future employment prospects and drive the UK economy?"

At a prize-giving ceremony at PwC’s offices on 11 February, the judging panel said it was unable to choose one of the winning essays and had therefore decided to split the £20,000 prize between winners Cha and Parker, awarding them both first place.

Members of the jury included UK business LK Bennett founder Linda Bennett and London School of Economics (LSE) economics and political science professor Tim Besley.

The ceremony included presentations by the four finalists: Cha and Parker from Cambridge University, Chadwick from UCL and Gwinnett from York University.

Cha’s essay based its rhetoric on two arguments, first the Centre of Cities think tank’s chief executive Alexandra Jones remarks that the UK is one of the most centralised countries in the OECD. And second, that cities internationally are on the rise and constitute the nucleus to modern civilisation.

In light of these arguments, Cha reasoned that a decentralised tax system would improve local employment opportunities by "providing cities with tax and spending powers to attract and retain skilled workers and invest in city programs that Whitehall may not be sensitive to".

"Even a partially devolved tax system would encourage cities to provide tax incentives to local people and firms to stay rather than relocate generating jobs and providing competition between cities," he wrote. "Such inter-city competition would drive the UK economy to be able to reach its full economic potential."

In his essay, Parker also pointed at decentralisation of tax as a driver for economic growth. But his essay focused on the notions of fairness and competition.

"There is now some political consensus that the ‘ability to pay’ principle should underpin any credible tax system: those with the broadest shoulders should bear the greatest burden of tax," he wrote. "However, this invites an inevitable tension between constructing tax policy which is fair and transparent on the one hand, and which is competitive and offers sufficient incentives on the other."

Commenting on the competition, PwC head of tax Kevin Nicholson said: "With momentum building around tax reform, we wanted to hear the views of the younger generation – the people who’ll live longest with the consequences of the policies put in place now.

"There were lots of great ideas across the entries, but the judges felt the winning two presented the most cohesive arguments," he added. "We’ll be feeding the suggestions into our research on tax reform, with the outcomes published next month."

Industrial scale avoidanceThe competition has coincided with an ongoing series of tax scandals involving PwC UK.

Just the week before the UK’s Parliamentary Committee of Public Accounts (CPA) criticised the firm for what it describe as "the promotion of tax avoidance on an industrial scale", in the wake of last year’s Luxembourg Leaks scandal.

A spokesperson for PwC UK said the firm recognised the need to "do more to explain the positive role we play in the tax system and in helping businesses to operate successfully."

The spokesperson added: "We agree the tax system is too complex, as governments compete for investment and tax revenues. We take our responsibility to build trust in the tax system seriously and will continue to support reform."

 

Related article:

CPA condemns PwC UK for enabling "industrial scale" tax avoidance

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