Recently published data published shows that the number of premises raided by HMRC has risen by 53% in the last five years, and by 28% year-on-year.
Rufus Ballaster, Partner at City of London law firm, Carter Lemon Camerons LLP, has said that the news epitomises “the age of mistrust”.
He is quoted by Business Matters:
“Just a decade ago, HMRC’s statistics of criminal cases brought for non-payment were in the handfuls per year – and now they run in the region of a thousand annually. What is more, the tax authorities have powers of investigation and confiscation which are far more draconian than individuals do in civil disputes.I would also add, that HMRC tends to target low hanging fruit (ie those people/companies that don't have an army of professional tax advisers and lawyers to argue their case) which in itself adds to the atmosphere of mistrust endured by taxpayers.
The ‘authorities’ operate on a basis of mistrust – they are hunting down the cheats and there is a perceived need to punish bad behaviour severely, so as to ‘encourage the others’ to pay up
Taxpayers should, and the vast majority of us do, file returns self-assessing the tax we ought to pay and making our payments accordingly. It is acknowledged that the proper functioning of the state requires taxes to be paid, and that proper behaviour of citizens requires frank disclosure and prompt payment in accordance with the law.
Today, tax is almost entirely ‘self-assessment’ based.
Increasingly, however, we live in a country of mistrust and set piece battles with allegations by HMRC of tax avoidance ‘losing billions to the public purse’ on the one hand, and protests from people and corporations that they pay ‘what is properly due’ on the other – so what is the truth here?
If certain tax payments are properly due and the taxpayer has mis-disclosed facts, or failed to file honest returns, HMRC is behaving in the public interest and we should defend its actions.
If, however, there is any doubt whatsoever about the position, it is the tax payer – and not the state – who should be heard fully and fairly before being pilloried for ‘tax evasion’”.
Tax does have to be taxing.
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The long defunct Customs had a low hanging fruit approach to 'smugglers' known as the petty seizure mentality. Easy pickings, seizure only, no chasing the revenue due just get the numbers in.
ReplyDeleteTrouble is the drug smugglers and other prohibition movers and shakers walked on by.
This was followed by similar efforts against bootleggers on organised runs who were allowed to walk away from large quantities of non-UK duty paid goods.
If the latest efforts are having tangible results and an increase in compliance, great, otherwise, window dressing and lipstick on a pig?
If they are catching organised criminals undermining the system, that's great news. If they are pursuing small traders acting within the law who forgot to declare every last penny i.e. a genuine mistake, then not so great news. Hmrc do seem to go for the easy targets; HONEST small traders who have declared all of their income but find themselves unable to pay in full by the due date and seek a payment arrangement are treated, and spoken to, totally disgracefully - on the other hand we are all aware of high profile 'deals' which have a significant impact on revenue lost. In other words they are aggressive with collecting the peanuts but seem happy to wave goodbye to millions; in doing so they are blissfully unaware of the message this sends to business large and small and how it undermines trust. They do not need to waste loads of our cash on media/spin/PR etc, looking from the outside we can tell them this for free.
ReplyDeleteOf course, while Hmrc senior managers are apparently enjoy away days at famous football clubs at the same time as small business is working night and day to earn their keep they do themselves no favours at all.
Hmrc are an organisation lacking in morals who happen to be obsessed with stats - so while the stats seem to be an impressive effort, one has to ask what have they achieved? Many of their powers are far too excessive, I do not trust them to use them sensibly and if they are being used in a relaxed way to increase the 'raid' figures but with little increase in cash to the public finances what is the point other than spin?