Monday 28 April 2014

The Budget And HMRC (2)

Following on from TBF senior's complaint to his MP regarding the proposals in the budget of giving HMRC the ability to take money directly from our bank accounts in the event of a tax dispute, he has had a reply from his MP Andrew Jones and from David Gauke - the current Exchequer Secretary to the Treasury.

Unsurprisingly the responses have not been reassuring. Andrew Jones' letter can be found below (click to enlarge all images throughout):

Andrew Jones acknowledges that the response from the Treasury does not address TBF senior's original concerns; "I recognise that you have made other points which may not be covered by Mr Gauke’s reply". However he reassures us that we can rest in comfort that he does “meet regularly with the Treasury Ministers and will ensure they are aware of the further comments you have made”. That's ok then...

Mr Gauke's response is quite frankly disturbing. What is obvious from the response is that the Tories believe that the money "is the government's" - we have to prove otherwise. And we have to prove it with very much lower funds backing us should we have a dispute.

Never mind that tax avoidance is perfectly legal, and in large part a consequence of the 'wonderful' Single Market. Never mind that the lower limit of £1,000 of tax owed is a limit which is miniscule – thus it is clearly not a measure that is aimed at those deliberately evading large amounts of tax but normal people and small businesses.

But as a 'solution' we instead get confirmation that the Tories are attempting to turn the entire tax system on its head - "we're guilty unless we can prove otherwise"
Anyone who believes that their tax avoidance scheme works will still be able to pursue their claim in the courts. And, if they win, HMRC will repay the tax with interest. However, HMRC’s success in avoidance litigation shows that only a small minority of avoidance schemes are upheld in the courts. This means that it is fair that tax should sit with the Exchequer rather than the taxpayer during a dispute into tax avoidance.
Gauke says: "it is fair...". Who says it's fair? Certainty not us the taxpayer. Has Gauke ever attempted to fight HMRC as a small business owner...? I guess not. And of course HMRC never makes mistakes.

Needless to say TBF senior is not letting this go - belligerent persistence runs in the family.


  1. The £1000 of tax owed is not miniscule it is completely and utterly irrelevent - HMRC will simply claim you owe more than whatever amount is set.

  2. Hello Froglet. Senior Frog caught my attention, so have you.

    In any democracy the people have a duty to pay their way, that includes avoiding unnecessary taxes to further the interests of the family. Just why, and how are we now taxed at about 85%? Governments create currency, we make wealth which government currency steals from us. Slaves, wage slaves, useful idiots, whatever. My short and curlies are caught between the Devil and a (not so nowadays) hard place.

  3. I've just done my tax return and Mrs D's as well. Between us, they owe us just under £2,000 in over-deducted tax. We refer to it as the HMRC annual savings scheme.

    There is one wonderful box on the form that says something like 'tick this box if you are participating in a tax avoidance scheme.' This makes me laugh. It's a bit like the question on a US immigration card that asks if you a member of a terrorist organisation. If you are then you're hardly likely to tell them, are you.

    Of course, they ask you because they can prosecute you if you knowingly give a false answer. But if you're not an expert, then how do you know if you are participating in what they call a tax avoidance scheme?

    Granted most people will know because they have paid a lot of money to accountants to avoid tax in the first place.

    As you quite rightly point out, tax avoidance is perfectly legal, it is tax evasion that is illegal. Well should HMRC be allowed to grab your money and then argue about it afterwards? It's appalling - and for the record they don't pay me interest on my 2 grand.

    There is, of course, a simple answer - don't keep any money in your current account and only give them the details of that account. If your bank allows them to deliberately overdraw you, then you can take action against them for negligence.

    The whole process is, in my opinion, fundamentally flawed.

    (Incidentally, I'm a chartered accountant! No, really... I am!)

  4. The system it would seem is approaching the stage where our money is no longer safe, it is taxed at sourse, if you are not a taxpayer you are caught by all the stealth taxes(fraud), if you happen to save from already taxed earnings the low interest rate steals it. However, on reading your article I was struck by the difference in attitude to your family and that to one Bernie Ecclestone. He is on trial accused of bribery in Germany, the one he bribed is already in prison, Bernie has apparently had a secret deal with HMCR to pay,in his own time, £10m on a tax bill for £2.5b. What was that old saying about "one law for the rich and another for the poor". It seems we have changed from an honest Country to a totally corrupt one in short order.

  5. @derek buxton1
    Manifestly Bernie did not owe £2+ billion because if he had HMRC would have pursued him - HMRC will not walk away from such a bundle. It's doubtful that he even owed £10 million although it was worth it to him to stop HMRC nagging.
    The "law for the rich/law for the poor" is true insofar as HMRC know that the rich (and big corporate) will fight their corner and, moreover, can afford to. As Diocles says: you try fighting HMRC with few resources - it's just not possible - so HMRC targets the "poor" whether or not money is actually owed and, generally speaking, only tackles the rich when tax is legally payable.

    PS why does this site not accept comments from users of Firefox?

    1. This site accepts comments from anyone, though there is currently comment moderation in place so some comments make take a while to appear.

      I write the blog using Firefox :-)

    2. I realise there's a delay for moderation but when I try to preview - let alone publish - the comment just disappears. Sadly, I can only conclude it's my Firefox which doesn't allow comment

  6. Maybe unrelated but.
    The other day I was looking into gubmints share of GDP spend over the past 100 years.
    I may be misreading but it basically said that in;
    1990 gov spend was 25% of GDP
    2000 it was 35%
    2010 52%
    and projected for 2016 was 85%.
    They are going to have to steal a lot of our wealth to cover that bill.

  7. Have you forgotten that about four or five years ago, just before the last general election, a proposal was made to make HMRC responsible for paying the salaries and wages of every employed person in the 'U'K currently taxed under PAYE, ostensibly 'to eliminate underpayment of tax'? The possibilities are frightening and I find it impossible to believe that the proposal was scrapped. Employers are already compelled to submit weekly details of staff hours. A friend of mine has to submit her staff hours every Monday morning.

    1. I remember that proposal well...

    2. We are currently spinning ever faster in the vortex above the plughole.
      Will not be too long before we all go down the drain and HMRC make the big grab - to save us from ourselves no doubt.