The American War of Independence, the French Revolution, the English Civil War, the Peasants Revolt. Each of these cataclysmic events in history were preceded by breakdowns in citizen’s trust in tax administration. The Boston Tea Party, tax protests and the Gabelle, Ship Money and the Poll Tax are not as well-known as their dramatic progeny, but a bomb may be ignited by a spark from a small fuse.
These events show tax administration, presentation and perception is vital in achieving successful governance. This is not just ‘historic’. It is a current lifetime experience for many European employees and business owners, so far as attitude to tax compliance is concerned. Remember, within living memory, the majority of Europe has suffered from military dictatorship. People adapt, it is not an evolutionary mutation, but obviously it affects their attitude towards paying taxes to Government. This is a commentary regarding tax compliance, not Brexit.
In my experience, in Europe citizens (say in Catalan, Spain) ruled over by in their view a fascist had no desire to ‘comply’ with tax rules. When questioned, they said ‘If you had been invaded by Hitler in 1940 would you readily have paid taxes to the 3rd Reich?’
Tax compliance, in my view, is a fragile flower. In the UK we are lucky in that compliance is (generally) better than in many other jurisdictions. It should not be taken for granted. The Tax Profession, Chartered Accountants, the legal profession and CTIOT should seek to work together with HMRC to create a successful and fair administration. As a result of seeing certain ‘schemes’, I confess I am as mad as HMRC, in that the underlying fundamentals were rarely disclosed. The professions collectively ought to recognise the effect this has on HMRC and the body politic generally. We need to buck up our ideas.
Similarly, as an ex-Inspector of taxes, I believe HMRC should endeavour to support and indeed ‘make friends with’, the vast majority of honest professionals who actually make the current system work. It is a collective responsibility to preserve with integrity and if we can head dishonesty off with plain professional integrity we will have ‘Done Our Bit’.