Tax, Morality, and a Load of Balls!

I am a Tax Practitioner.  As a Chartered Accountant and former Inspector of Taxes, I have always been taught [and sought] to act ethically.

Unfortunately, I fear HMRC is at grave risk of becoming dysfunctional.  Too many cuts in expertise, perhaps?  Too many silly projects, instead of performing good service.  Generally a political problem, rather than the good Civil Servants trying to keep the ship afloat?  Questions!

From my experience, I understand that certain people have tried to disclose undeclared income to HMRC, but have then been ignored.  Understandably, this makes them a little reticent in sending a reminder!

I have just had a telephone call from a pensioner [not a client] who is [from information provided] not due to pay tax, but is having tax deducted at source from her widow’s pension.  A decent HMRC would provide her with a real person to talk matters through.  However, such local Help Desks have been abolished.  This seems to be on the grounds that you can get such assistance “online”.  There are [many] people who have never been online, and do not own computers.

Please do not suggest a telephone ‘Help Line’ is remotely equivalent – even if you have the patience to wait the extraordinary length of time for the telephone to be answered.

You may speculate where such saving in Government costs may fall, in terms of rich and poor.  In this particular case it is likely to fall upon the pensioner who cannot understand how to get her [deserved] repayment.

In our great democracy such matters may affect your vote?

Surely, a sensible and coherent Tax Policy should be a great vote winner?

With such an opportunity, then, you may speculate as to why Ed Balls decided to attack giving cash to humble workers, rather than focussing on the more complex area of multinational business [where the money is]?

Using straightforward cash?  We all realise, [surely] electronic monetary transfers would be far better than cash?  Electronic transfers would involve Banks that would impose charges on the small business concerned.  If the business was in overdraft, the Banks may take away control of day to day funds and then, at their whim may close the branch in the [it does not matter because it is out in the sticks] small town where the humble worker may reside?  Transfers to banks that may be computer hacked for millions?  Run “Trust Me I am a Banker” past your marketing department as a slogan?

The Westminster People know the Bankers, so obviously they understand how trustworthy they are.

The argument seems to be give your money to the big banks and supermarkets, because they are obviously less corrupt than the nice woman who cleans your windows and has done since she inherited the business from her father, when she decided to look after him after his stroke?

Tax is a social good.  It should be paid according to the law.  Please do not bring morality into it, because if we thought that way no one would wish to pay it, because in the diverse economy of modern society there will surely be something everyone could claim a moral objection to funding.

If paying tax is a moral duty, then presumably any radicalised Muslims have a good argument for tax exemption, because they would object to bombing the Islamic State?

As to Evil Tax Planning, I would suggest that anyone who is not planning on [at least] smoking 20 cigarettes and also drinking a bottle of wine this evening is guilty of planning to avoid, VAT, tobacco and alcohol duty.  I trust you will wake up appropriately ashamed of yourselves!

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9 Responses to Tax, Morality, and a Load of Balls!

  1. Chris Willisms says:

    Hear hear!

  2. Euan McLeod says:

    Agree whole heartedly. I also was an inspector of taxes and worked ont he basi that everyone had to pay the correct amount of tax, not too much and not too little. That whole ethos has been cast aside in terms of budget cuts and efficiency cuts that mean that many people do not have access to straight forward, simple and clear information. Bring back local staff and tax help centres to ensure the vulnerable are not disadvantaged.

  3. eavesandco says:

    Thank you for your comments, it is pleasing to see agreement!

  4. Barry Matthews says:

    The Ed Balls incident just reminds one of how impossible it is for politicians to say anything without ” the media ” jumping onto elements. I expect that he thought at the time that he was merely attempting to discourage the black economy. I am not an apologist for him or any other politician who are driven by the very dark arts of trying to get re-elected.There is very little honest public appraisal of the future or even the past !
    The austerity cuts have driven the HMRC problems you relate, and these
    are argued in terms of current year deficits c £100b rather than the longer term accumulated £1.4 trillion. The latter has to be dealt with over decades and short-term knee-jerkism should be reduced.

  5. Sian Anthony says:

    Totally agree. Everyone should pay the correct amount of tax, based on legislation – not what HMRC decide works best for them.

  6. David Segall says:

    Also agree totally. Tax has never been and never should be a moral issue. This has just been a very clever (and sadly all too effective) campaign by HMRC to muster public support against the wicked tax avoider by completely blurring the perception between avoidance and evasion. Tax evasion remains illegal but now tax avoidance is apparently immoral – a for them and a huge con on us. We can only hope that the legal challenges currently being mounted against GAAR and the APN regime bear some fruit for the beleaguered taxpayer !

  7. eavesandco says:

    Personally, I have underlying faith in democracy. I believe the voting public are significantly more sophisticated than the politicians give them credit for, and the 24 hour media sensationalism is a result of their wish to be in the news, rather than the public insisting on a quick fix. The majority of the public live real lives and would acknowledge the reality of someone saying; this is complicated, let’s think about it carefully. Current Government policy [all parties] seems to be worked on the basis of dramatic swings on the tiller, without taking account of the lead time that such changes in legislation need to work through. Thus policies are dismissed before they have been properly tested, and then politicians protect themselves by saying “We have changed that policy”. We have “learned our lessons” and now a totally different policy is in place. We “apologise” for the damage caused by [someone else].

    This is real short termism. I agree it needs to be reduced, but how can it be when the ‘Powers that Be’ turn a good idea, like Pensions Auto Enrolment, into a bureaucratic shambles as it currently looks to be. Again this is not targeted against any particular party, but the record keeping required seems to implicitly presume every business has a dedicated Human Resource Department. What about every Party’s claim to be a ‘Friend of Small Business’?

  8. Martin Sans says:

    I agree whole heartedly with the comments made as would any self respecting tax practitioner. We all know that every taxpayer has the right to pay no more tax than they are legally due. Any more than that is a “gift” to the Exchequer. If I am going to make a gift then it will go to the charity of my choice (and I do not include the Exchequer as a charity!).

  9. If my employer offers me a company car or a cash alternative, I might look at the tax implications before making my choice. If I choose the option which carries less tax, am I engaged in tax avoidance?

    If an individual or a company considers the tax implications respectively of any personal or commercial arrangements that they are contemplating, are they avoiding tax if they select the option which carries a lower tax liability?

    Based on media reports and the proceedings of certain Select Committees one would conclude that the answer to both is yes.

    As a tax practitioner I say no!!!

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