"Be Thankful I Don't Take It All"

"Prime Minister, the Treasury does not work out what it needs and then think how to raise the money. It pitches for as much as it can get away with and then thinks how to spend it." 

Sir Humphrey, Yes Prime Minister.

That the government views the private purse as a magic money tree is an old age problem - one aptly illustrated by the rather bitter but not inaccurate Beatles' song, Taxman.

And it's a problem that becomes ever acute when under planned new measures in the latest budget. HMRC will have an automatic power to take money from a bank account when the holder has failed to act on four formal warnings requiring payment. Currently such actions can only be done with the permission of a magistrate or judge.

TBF senior still has an ongoing complaint with his local MP on this matter. With this in mind we note that the Telegraph today on its front page has another example of HMRC mistakes that expose deep flaws behind this proposal:

The number of people being investigated by the taxman has doubled in one year, raising concerns that people who have made innocent mistakes are being targeted by the Government.

HM Revenue & Customs made inquiries about the tax affairs of 237,215 people last year, compared with about 119,000 in 2011-12, figures obtained by The Daily Telegraph show.

The number of self-employed people investigated has quadrupled in that time while annual prosecutions have risen sevenfold in three years.

The figures are evidence of the attempts HMRC is taking to minimise the estimated £35 billion of tax lost every year.

Experts have warned that people who have made simple errors when filling out self-assessment tax returns are “an easy target” for HMRC.

Not unsurprisingly HMRC will go after the "low hanging fruit". They are more unlikely to resist and lack the means of fighting back successfully:

Mark Giddens, a partner at the accountancy firm UHY Hacker Young, said HMRC was focused on collecting tax from “soft targets” such as “teachers, doctors..." These taxpayers were more likely to settle without dispute, he said.

As Bill Cosby noted "the government comes for the regular people first".

Other mistakes are not uncommon and HMRC even loses our data. Naturally despite overwhelming objections, we still get the "reassuring" dulcet tones of the Treasury on transmit only:

"Although the vast majority do this, there is still a minority that chooses not to pay, despite being able. The proposed powers will give HMRC another tool to collect tax debt owed. The current consultation includes a range of safeguards to ensure the power is tightly targeted.”

"A range of safeguards". Not that would amount to a tin of beans of course. Who decides how to implement the safeguards? Well HMRC... However those in government tend to enthusiastically support such measures as they rarely experience the downsides of their actions because they have the money and the means to immune themselves from the consequences at the coalface that the rest of us have to endure.

And as the experiences of Complete Bastard fighting with South Gloucestershire Council over council tax very clearly shows not even the law is a defence - especially when it consists of willful corruption by the Police, Councils and Bailiffs in the cause of forcing people to hand over money which the state believes is theirs regardless. He quite rightly notes in conclusion:

Put simply, this is a government at war with its people.

Of course we as a people can rebel...and demand a better way of running our own country.

Cash In Hand

It was just over four weeks ago when the coalition, namely Cameron, walked straight into a perfectly avoidable tax bear trap, regarding that time Jimmy Carr.

One would think lessons would have been learned but oh no. David Gauke, the Exchequer Secretary decides to take on (probably) the majority of the British public at a time of economic uncertainty and accuse them of being morally wrong by paying plumbers etc cash in hand. Leaving aside that most of us are certainly not going to take any lectures from MPs on morals when they quite happily rip off expenses and spend hard-earned taxpayers' money on a whim such as here...

Commons Speaker John Bercow charged taxpayers £624 to have his chauffeur rush him to Devon for a ‘dirty weekend’ with wife Sally before she entered Celebrity Big Brother.

....such sanctimonious pontification from an MP is obviously going to lead to papers asking awkward questions. And so it proves:

People who pay plumbers and cleaners cash in hand are doing nothing illegal or immoral, a cabinet minister insisted on Tuesday, as senior members of the Government were forced to admit engaging in the practice themselves. 

David Cameron and other senior cabinet ministers including Nick Clegg and George Osborne admitted that they had paid traders cash in hand in the past. And an analysis of expenses claims by The Daily Telegraph showed that two other members of the government — Jeremy Hunt, the Culture Secretary and Sir George Young, Leader of the House of Commons — paid suppliers hundreds of pounds in cash, and claimed back the money from the taxpayer. 

One is tempted yet again to accuse the coalition of being amateurs but I do wonder if that is too much of a compliment.

Carr Tax

The 'outrage' over Jimmy Carr's tax affairs has been rather amusing. On one level much fun can be had seeing a lefty comic, who only makes jokes about the 'right kind' of minorities, squirm as he gets caught out.

Now if ever there was a story that resembled to politicians an oversized can with the label 'worms, do not open' this was it. So while Downing Street initially told journalists that the Government does not normally comment on the tax affairs of individuals, Cameron in Mexico City had other ideas, and in with both feet he went:

Prime Minister David Cameron has said the tax arrangements of comedian Jimmy Carr are "morally wrong".

Good ol' populist stuff...which inevitable would mean the papers would investigate others close to the PM. And as a result he's now having to beat a hasty retreat:

David Cameron was in full retreat over his condemnation of celebrity tax avoiders last night, following warnings that his attack on Jimmy Carr could open a Pandora’s Box.

The Prime Minister refused to criticise the tax affairs of Take That star Gary Barlow, despite allegations that the singer was involved in a similar scheme to the one Carr used to cut his liabilities.

And the man is supposed to specialise in PR?

Then of course there's the outrage in the comments. One wonders how many of them have paid builders cash-in-hand thus avoiding VAT, and not declared it. A practice, unlike Carr, is not avoidance but evasion and so entirely illegal....

Taxing (Part 2)

Perhaps in light of my comment on his piece (I don't know) Political Scrapbook has now amended his contentious Vodafone post so that any reference to tax evasion has now been quietly removed.

The piece is still inaccurate though, as various comments point out. It wasn't even tax avoidance; the Indian tax office had applied the tax retrospectively on a Vodafone deal and it was outside their jurisdiction to do so - a move that was found to be illegal according to the country's Supreme Court. So I'm not sure how abiding by a country's law amounts to a scandal.

Interestingly PS is up for awards - political blogger of the year. With such loose use of the facts and still be up for awards one can only assume next stop then is writing for the Daily Telegraph.

Taxing

This from the prominent left wing blog Political Scrapbook:

(PS emphasis)

Vodafone’s top lawyer in India has quit after being tangled up in a four-year long tax evasion scandal. The row has seen the Indian government bullied by its biggest foreign corporate investor — but officials are not giving up on extracting $2.6bn from the company.

One suspects that Political Scrapbook needs to learn the difference between tax avoidance and tax evasion, or perhaps the loose interchange of the terms in the same article is deliberate...?

Direct EU Taxes?

Direct taxation has long been the desire of the EU, despite its political ramifications, which it readily acknowledges:

"EU bureaucrats, already braced for a massive backlash, have advised officials to avoid using the word “tax” because it would be “politically explosive”.

Too right it would be politically explosive. However yesterday the EU Commission still sought to continue to made its case for EU direct taxation, in relation to the budget negotiations for 2014-2020:

To this end, the Commission enumerates, in a non-exhaustive list, the following options for own resources that could be discussed:

• taxation of the financial sector,
  
  
• EU revenues from auctioning under the Emissions Trading System,
  
  
• a EU charge related to air transport,
  
  
• a EU value added tax,
  
  
• a EU energy tax
  
  
• a EU corporate income tax.
  

In a technical annex to the Communication, the advantages and disadvantages of each are listed. Most importantly, the future blend of own resources would be a replacement not an addition to the financing of the budget.

I suspect there's an element of sabre rattling here (the first one already seems to have been ruled out). The EU wants a 6% budget increase despite the budget cuts in the member states and is facing resistance. Putting forward proposals for direct taxation, which will be unpopular, looks like very much like a negotiating position for the budgetary increase discussions next year. The UK and Germany have indicated strongly that any form of direct taxation will be vetoed (although with the Cameron's Tories you can never be sure). So let the horse trading begin.

Suffice to say that should such a situation occur, and we all know the EU will return again and again with such demands ad infinitum, then a significant and important line would have been crossed. No longer would my campaign only take on the form of blogging, standing in elections, etc, but a willingness to avoid such taxes (however difficult that proves to be) whatever the consequences.

Update: There's a petition against direct EU taxation here: