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NEW YEAR DISHONOUR: A KNIGHTHOOD AND A PARLIAMENTARY DOUBLE RAP FOR “PERVERSE” HMRC
January is the time of year when many of us set out our intentions for the 12 months to come.
Of course, abiding by resolutions requires a certain resolve, an ability to withstand pressure to change tack and adopt the kind of practices which avoid having to make difficult choices.
In short, that’s precisely the kind of situation in which HMRC finds itself at the start of 2019.
The pressure, though, is not the sort inclined to tempt the Revenue’s newly beknighted Chief Executive Sir Jon Thompson into doing the wrong thing.
Even before the novelty of his New Year honour, he’d had to contend with nothing less than a savaging at the hands of a cross-party group of peers.
As Britain was resounding to the sound of jingle bells, members of the House of Lords’ Economic Affairs Committee seemed less full of seasonal goodwill, at least according to a lengthy and detailed report on the taxman entitled ‘The Powers of HMRC: Treating Taxpayers Fairly‘
By the generally genteel standards of much parliamentary business, the language which it contained was lacerating.
Whilst supporting anti-avoidance activity, the report’s authors concluded that the Government had failed to “discriminate effectively between the full range of behaviours and circumstances it describes as tax avoidance”, something which led to “naive… unrepresented taxpayers” being treated with the same severity as “sophisticated, high-income individuals”.
An attack on HMRC’s progressing the loan charge due to come into effect from April this year was withering
“HMRC appears to be prioritising recovery of tax revenue over justice “
The lords and ladies on the committee were similarly unrestrained in their consideration of a showcase measure unveiled by the Revenue last July designed to extend its ability to target the avoidance of tax by those enjoying offshore income and the controversial ‘Making Tax Digital‘ programme (More Info…)
If Sir Jon had hoped that consumption of festive foodstuffs might have rendered his critics at least temporarily mute, he was sadly mistaken.
When it emerged early after the New Year fireworks had subsided that HMRC had demanded £21 million from one vendor of items on many a British household’s Christmas buffet, Iceland, there was fresh bother.
News reports described how the Revenue had judged a scheme designed to help low-paid staff save towards the cost of Christmas as akin to avoidance and reckoned that Iceland had underpaid the amount of tax which it owed the Treasury by £3.5 million over each of the last six years (Read Full Article)
Former Cabinet minister Nicky Morgan, now chair of the Commons’ Treasury Select Committee, outlined her belief that HMRC’s actions were “perverse”.
Iceland’s Managing Director, Richard Walker, founder of the retailer’s founder, Sir Malcolm Walker, went further, using social media to urge the Chancellor of the Exchequer, Philip Hammond, to intervene in a development which he called “idiotic”.
The row provided additional justification for the Lords’ urging a review of ” all powers granted to HMRC” since the conclusion of the last previous study in 2012.
It also underlines how requests for extra legislative and adminstrative powers are understandably countered by taxpayers and those in authority insisting on those tools are subject to proper checks and balances.
In a year when HMRC’s workload is going to be further complicated by Brexit, pressure on the accounting capabilities of small businesses and those who used disguised remuneration schemes, Sir Jon Thompson would be forgiven for feeling under a substantial amount of pressure even before he has a sword aimed at his shoulders in Buckingham Palace.
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