The Lunatics are on the Grass

 

“The lunatics are in my hall
“The papers hold their folded faces to the floor
“And every day, the paper-boy brings more” (Pink Floyd, Brain Damage)

More than forty years after Pink Floyd released “Dark Side of the Moon”, the lunacy continues and only the faces in the photos have changed.  Each day, I read the newspapers with increasing concern.  Is it old age?  Or am I right to be so stunned that I struggle to find the coherent thread that links the stories? And so I decided to explore that link.

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Quarterly tax returns – HMRC’s thirst for knowledge

… about us.

HMRC published its consultation papers on 15th August called “Making Tax Digital” along with a series of other matters. Originally it was called “Making Tax Easier”. I assume they omitted the words, “to Collect” in error.  The Telegraph focused on the draconian penalty regime proposed (The Telegraph, 16 August 2016).  The Times was most interested in the new proposed powers of HMRC to penalise advisers involved in tax avoidance.

These proposals go to the heart of the relationship between government and the people. HMRC seeks powers to require unpaid work from citizens and will find itself destroying the understanding that used to exist. The relationship appears to be broken, and it seems like time to rethink it.

For centuries, tax was understood as government taking a share and using it as it saw fit. Excess taxation toppled Kings. Now, the people, and sometimes the media, are complicit in creating the illusion that tax equates to charity.  Tax is necessary for society to work, but it is not inherently a benign thing.

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Someone Sent a Promised Land

In the press this week, was a report that the DVLA thinks that they have lost £200m in road tax revenues since introducing the new disc-free tax system.  It caught my eye because, about a year ago, the Chancellor announced how they will now do away with paper tax returns and replace them with an online tax account.  Many of us wondered at the time how the IT would work.

In the 1970’s (I know I don’t look old enough) I recall how we all thought computers would do away with almost all mundane work, and we would live lives of leisure, and only do the work that humans must do.  It was a Promised Land, delivered by second class post via Royal Mail (like most government mail), it seems.  Is Government trapped in a 1970’s time bubble, desperately doomed to failure, yet hoping to save costs by computerising our lives?  Or does government have a long term strategy?

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Nothing to Hide, Anything to Fear?

Alcatraz.jpg

We often hear, “if you have nothing to hide, you have nothing to fear”?  Were it true, we would not object to the idea that some gentleman from the secret service might listen as we whisper sweet nothings, joke with close friends in a politically incorrect manner, or discuss a private business deal?

Privacy and secrecy are very much a part of business. Confidentiality is fundamental in professional life. Businesses work hard to create contact lists, customer lists, know-how and techniques, and guards them jealously.  Sometimes a non-disclosure agreement is needed to enter into any discussions with companies.  So let us not pretend that transparency in business is widely accepted as beneficial.  It has long been established that there is a need for a balance between the right to privacy, and the public’s right to protection.

But on which side of this balance do the new People of Significant Control Regulations sit?

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Mother, should I trust the Government?

Houses of Parliament

 

Not for the first time in my professional career, Her Majesty’s Revenue and Customs appear, in my humble view, to have failed the trust test.  I do not wish to make any false accusations, so I will use words such as “may” and “appear”, and will leave it to the reader to consider the evidence.  The irony though, is that HMRC is an organ of government, yet there seems to be evidence that it is not averse to pulling the odd fast one, however much it may bleat about nasty taxpayers who are happy to use the law to avoid tax.

Today I saw a new notice of coding for a client.  This client, like most entrepreneurs, has a salary from his company and pays out excess profits, if any, by dividend.  He has been doing so for some years – most years he pays a dividend.  Some years he has not made enough profit to do so.  Each year, he files a tax return which takes account of his employment income, other bits and pieces and his dividends.  He has to make payments on account each year in accordance with the rules for self assessment.  I doubt anyone will find this unusual.

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