I know a lady – a former colleague in fact – who worries incessantly about her tax affairs and phones me up about income tax or inheritance tax, neither of which is going to cause real problems, explains Simon Sweetman.
She also phones HMRC where she confuses the unfortunate call centre staff and collects a variety of not quite correct answers, or answers to a slightly different problem, and then comes back and bounces them off me. It doesn’t stop her worrying.
Now I know that in her case the worry is caused by having worked as an accountant with some acquaintance with tax matters, knowing enough to worry but not enough to see the solutions. But life as a tax adviser to small businesses and smaller accountancy firms has taught me that many people are effectively paralysed by a fear of tax and of HMRC, a fear that is in many cases wholly irrational. That is not the fear of confusion, it is the fear of dreadful punishments. Many people faced with an HMRC enquiry actually are afraid that they will be sent to prison, and no amount of reassurance can allay that fear. We know that it takes a lot for HMRC to launch a prosecution for tax fraud, but other people do not.