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Trust?
Having spent over 30 years dealing with other peoples tax affairs I find that nothing has changed. The fellow at number 11 Downing St wants as much of our money as he can get and does not care a jot how Revenue and Customs get it. The government spends millions (if not billions) foolishly, legislates unwisely and considers that we lesser mortals can be easily led by the nose (I think they got that one right). The civil service keeps growing larger as does their wages and pensions bill and no matter how close the profession co-operates with HM Revenue & Customs they will continue to think that we and our clients are crooks.
Sorry there has been one change I'm older and thankfully I now qualify as a grumpy old man.
John Newth on the money
Of all the comments posted, those of John Newth most accurately reflect my feelings on the matter. Virtually every member of society accepts that they should pay a reasonable amount of tax and expects a reasonable level of public service in exchange. Most of those same people, however, do not want to see that money being flushed down the toilet by a profligate Labour government, who think that the words efficiency and cost-effectiveness are highly politically incorrect.
For the HMRC to demand my money and that of my clients with menaces, give it to Gordon to throw down the toilet and then whine on about us not trusting them, simply beggars belief. It would be astonishing if we did trust in the current situation, particularly once you recognise the true political agenda behind the rule changes and new legislation. What they really want to do is to collect as much tax as possible to fuel their wasteful spending, in such a way that sufficient of the population will re-elect Labour at the next election.
This requires them to use stealth against a substantial section of society, to look those people in the eye and accuse them of being underhand and of somehow not doing their part for society. That justifies everything and keeps the bulk of the voters (who have not been made to suffer so far as they can tell) on their side. To be fair they have been remarkably successful in this regard, with hardly a mention of tax at the last election but it does not mean that we don't know what is going on nor that we like it. I am not underhand and I do my bit for society but trust in those circumstances, hardly!!
trust gap
Things have changed. There was a time when the correct tax was the minimum due. Politicians and therefore inspectors now have some new idea of a "correct" amount. This seems to be something between the old minimum amount due by a person who has ordered his affairs with tax in mind, and the most that could possibly be due if one made a real hash of one's affairs. It implies that the inspector can think (whatever he says) "the most tax I can get you to pay under the law is £x but the amount I really think you ought to pay is £y".
There will never be trust between the two sides while this attitude on the part of inspectors (and they have it only because of politicians) remains. Besides, it is open to the politicians to put this right. They make the laws. They should do a better job of it. They make the "loop holes" and then belly ache when they are exploited. Everyone told them the 10% starting rate for Corporation tax would lead to massive amounts of incorporation and exloitation of that law. When they woke up to their mistake that didn't just get rid of the 10% rate and admit a mistake. Oh no, they gave us the non corporate distribution rate. Is it any wonder no-one trusts them?
if it looks like a con...
they call us customers but they don't treat us like customers. Why not inject a bit of competition in to this - let the customer choose to whom his tax is paid!
working together
I also agree with John, but wasn't "working together" supposed to sort out all the problems.Ha Ha!!!!!!!!!!!!!
I am an eternal optimist, however if nothing changes we will have stagnation by 2008. Just in time for GB to take over as PM and really make a mess of things.
The problem with "trust" is that to be effective it has to be both ways. HMRC want us to trust them but want to be able to mistrust us when it suits.
I would rather mistrust them and have them mistrust us. That way everyone knows where they are. Reverse logic.
Get rid of EU, compliance and eer's nic. That will go a long way for us to have some respect for what the Government is trying to achieve, which must be for tax-payers to part with their hard earned money and know its going to be spent wisely.
I remember when
John is bang on the money. I recall listening to him saying - and I think it was as far back as 1985-7 - that government hasn't got enough in the coffers to shell out for the OAP by 2000. At the time, this was in the context of NICs and schemes around avoidance. He made the point that the so called National Insurance part of NICs was nothing of the sort and that while people believe they're investing for the future, demographics had blown the model out the water.
I find Hickey's words disingenuous to the point of wanting to puke.
But to John's point - which is worse, stealth taxes or admitting the truth? Isn't the time now for government to finally put its hands up and say to the public - we ain't got the money. So it's a simple choice, pay for services or go without? But if 'we' are to pay then 'we' need a real say in what goes on. That's the crunch point for government - imho.
Fantasy
A Gap exists because the Govt. cannot write perfect legislation.
It also exists because the Govt. is becomming ever more sneaky in its 'clarification' and 'reinterpretation' of existing legislation.
One day Black is Black, the next day it is White and retrospective.
If the goalposts keep moving then taxpayers become more and more enclined to play a rougher game. It is after all only 'fair' if the 'correct amount' of taxation that 'should' be paid keeps changing magically behind closed doors.
This govt. seems particularily bad for its addiction to the trough.
Tax gap is necessary
Is it not futile trying to eliminate the tax gap. Surely it would just re-appear as soon as the politicians noticed it had been eliminated. It is a useful indicator of over ambitious spending by the government.
I see in my paper that GB has insisted on a 2% public sector pay settlement next year. I wonder what it would have been without the tax gap.
Trust me, I'm a Politician
HMRC walks down life’s road with a ball and chain attached to one leg. The owner of the manacle is politics. So when HMRC say trust us, they do not have the authority to consummate such a relationship.
The trust required by HMRC is more to do with political stability than empathy. The Treasury will always fund the ambitions of a political viewpoint and always has.
Pie in he Sky!
I was present at the Hardman lecture, and with all due respect to the speaker, felt that it was very 'politically correct'.
Some people will never pay the tax that is their due. Others will always be avoiders or evaders. That is human nature. We have to live in reality.
The real issue is the voracious appetite of the current government for more and more funds. That is the real cause of the so-called 'tax gap'.
HMRC have been told to plug that gap, and have attempted to do so by the introduction of taxes such as IR35, the section 660A fiasco, the pre-owned assets attack and the NCD rate for corporation tax, let alone many other 'stealth taxes'.
The real and honest answer is for the government to increase the basic rates of income tax and corporation tax, and admit their financial profligacy. However, they nor any other party will never do this, as it would be political suicide.
Well said Duncan
I agree entirely Duncan. If I could write as succinctly I couldn't have expressed it better.
The good thing is that more and more people are wakening up to the fact that they are being politically manipulated and financially mugged on a daily basis.
I for one leave my clients in no two minds about who is responsible for the increasing red tape, the falling profits and the worrying trend of ill conceived, aggressively managed tax enquiries.
Anyone thought of actually holding...
Meaningful discussions in an atmosphere of repsonsibility instead of continued blame?