Bwahahahahaha

Multi-millionaires are enjoying a “cosy” relationship with the taxman and receive a level of help and support that is not given to ordinary taxpayers, MPs say in a report.

Twisted, twisted, logic.

The MPs said that “HMRC’s approach to dealing with the very wealthy suggests that they get help with their tax affairs that is not available to other taxpayers”.

Phone calls and discussions with them are not routinely recorded – unlike those between HMRC staff and ordinary taxpayers – leading to the impression of an “overly close and inappropriate service to the wealthy”.

The MPs were concerned that around one-third of these individuals are under investigation at any one time, and is investigating cases with a potential value of £1.9 billion.

Yet since 2012, HMRC issued just 850 penalties totalling £9 million to them, an average penalty of £10,500 each.

The original concern was that these very rich weren’t paying enough, or rather not the right amount. So, specialist unit to deal with the very rich. Now the complaint is that there is a specialist unit dealing with the very rich. Further, the complaint is that most of them are obeying most of the law most of the time, which is why there are few prosecutions.

Thus we must change the system.

Figures showed that the tax take from this group of high net worth individuals fell by a fifth, equivalent to £1billion, over the past five years and while sums paid by ordinary tax players jumped by £23billion.

How have the taxes which weigh upon those groups changed over this time?

20 comments on “Bwahahahahaha

  1. We don’t tax net worth either. We tax the income they receive on their assets. Haven’t dividend yields and interest rates declined lately?

  2. There is sethimg golden about this. A “specialist unit” (what exactly makes someone a specialist? Is it like Ritchie being called an academic because his mates gave him a job?) Is set up presumably to take more money from these people. It creates ‘customer relationship managers’ who, in the spirit of these things, become very concerned at managing the relationship and forget to collect tax.

    And yet we are told that the richest have never before paid as high a proportion of tax. So somewhere some statistics simply so not add up.

  3. > And yet we are told that the richest have never before paid as high a proportion of tax. So somewhere some statistics simply so not add up.

    Makes sense to me. Since the figures for 2015/16 aren’t in yet (I’ve yet to submit mine), they must be talking about the five year period from 2009/10 to 2014/15. At the start of that period, the Personal Allowance was £6,475. By the end, the allowance had been raised to £10,000. The poorest are paying less: therefore the richest are paying more (as a proportion of tax).

    Besides, there’s a big difference between the top group of HNWIs (maybe the top 1%) and “the rich” more broadly (the top quintile). It’s quite possibly that the former are paying a bit less while the latter are paying more.

  4. “Figures show …”
    Yet “An HMRC spokesman said: ” …Ttoday the top one per cent of earners pay more than quarter of all income tax.
    “There is absolutely no special treatment for the wealthy, and in fact we give them additional scrutiny, with one-to-one marking by HMRC’s specialist tax collectors, to ensure that they pay everything they owe, just like the rest of us do. We have secured an additional £2.5 billion from the very wealthiest since 2010.”

    So

  5. Andrew M

    That still doesn’t add up. Personal allowances impact on lower paid workers far more and make up a villager proporion of the tax take from them. Amd yet their collective tax bill is rising by £23 billion. It is the opposing movements that the PAC is supposedly highligthing. Yet the rich are said to have never paid a bigger percentage.

  6. Two big changes: CGT rates are down, as are CT rates.

    CGT takings are up; CT rates are also up over the period in question…

    The entire £23bn increase in IT takings can be attributed to PAYE increases.

    It almost looks at though employment income generally is massively up, but people who are wealthy (ie, have lots of investment assets) are not deriving much of their income from employment.

    Oh, and tax from the top 1% is up; it’s tax from the wealthiest 1,000 (a subset of the 1%) that is down.

    It’s almost like people are cherry-picking data to support a conclusion, without considering the wider picture. I’m shocked 🙂

  7. Phone calls and discussions with them are not routinely recorded – unlike those between HMRC staff and ordinary taxpayers – leading to the impression of an “overly close and inappropriate service to the wealthy”.

    Aren’t we told those recordings are “for training purposes”?

  8. Pellinor,

    It depends which exact years they’re looking at, but the big drop in CGT rates started in the 2008/09 tax year. That doesn’t line up with the article’s “over the past five years”.

    Ironman,

    Fair points. Unfortunately I don’t have time today to dig into the figures, but there’s obviously a logical explanation in there somewhere.

  9. The wealthy – have wealth. They are not taxed on the wealth.
    They are taxed on the income – and not all income is subject to income tax.
    Say a guy with £100 million decides to invest in property. Sets up a company to do it, has staff in the company and purchases 300 properties which the company manages. As the shareholder he gets income from dividend.
    What is his income tax payable in any one year? Only applicable if he has money from the company subject to income tax. If he just receives dividend every 5 years say then what income tax would that £100 million generate in 5 years from that individual?
    Yes, exactly.

  10. I have no problem with those who (presumably) pay the most tax recieving a measure of support above and beyond the man on the Clapham omnibus to ensure that the right amount of tax is paid.

    Seems fair enough.

    I did my tax online the other day and this consisted of checking “No” to lots of boxes, entering some id information about my company and entering the amounts received in both income and dividends.

    Pretty straight forward and the information requested was on my P60 and my company dividend vouchers as has been the case since I started doing online filing more than a decade ago.

    Took me about 20 minutes to do mine, which is reasonable for a once-a-year tax reconciliation, which is all the return really is.

  11. “Seems fair enough.”

    Unless the MPs’ objectives are not to get it right, but to stick it to ’em.

    ‘Figures showed that the tax take from this group of high net worth individuals fell by a fifth, equivalent to £1billion, over the past five years and while sums paid by ordinary tax players jumped by £23billion.’

    MPs’ prejudices revealed.

    And, my gawd, it was a “cosy” relationship as well! The process should be punishment! How dare they have so much money !?!?

  12. Unless the MPs’ objectives are not to get it right, but to stick it to ’em.

    Indeed, but HMRC have been down this route before. It is all very well having a “stick it to them” approach, but that requires putting matters before the courts, hiring costly legal counsel and accepting that the consequence of losing the case might be substantial claims from others in similar positions.

    The other problem with HMRC going to court is that their staff were often shown to be far from the neutral arbiters of taxation, but in various measures incompetent, vindictive, malicious and spiteful.

    This is fine (for HMRC) in the back rooms of Revenue House, but when it is displayed for all to see in court and then the next day on the front page of the Daily Mail, it is a bit much.

    Dave Hartnett realised this years ago, which is why they changed to an approach whereby going to court is pretty much a last resort for HMRC, only when all other avenues of agreement and recovery have failed.

  13. John Galt, saying nice things about Hartnett over at the fat Prof’s blog would get you an instant ban, if you are not already banned. I think I have been banned 5 times under different names. Curses to the stoolie who told him about Rocco Siffredi

  14. @Diogenes:

    Don’t get me wrong, I’m not a fan of Dave Hartnett and I think he did a fair amount of stupid things, but he did at least understand that any tax system was a balance between the government and the people and that confrontation was less likely to fill government coffers than a pragmatic approach.

    The merger was not the cause of HMRC’s problems, but a lot of qualified tax inspectors could see the writing on the wall at that time and when offered redundancy / early retirement they got out while they could.

    HMRC has struggled to recover ever since and I can see no end in sight to their problems.

    Oh dear. How sad. Never mind.

  15. Is not total employment up massively over the last 5 years? All those immigrants getting jobs here? Its not surprising that the income tax take from the broad mass of the population is up if more people are working than before.

  16. John Galt, at least the tax guys had the wisdom and foresight to pay the Fat Prof for advice and support

  17. John Galt, at least the tax guys had the wisdom and foresight to pay the Fat Prof for advice and support

    Yeah, but it wasn’t “the tax guys” was it? It was their union the Public and Commercial Service Union (PCS). All unions are completely bullshit, destructive and self-serving nowadays.

    Any value they did have died before WW2, in the UK at least…and public sector unions even more so.

  18. @John Galt – “Dave Hartnett realised this years ago, which is why they changed to an approach whereby going to court is pretty much a last resort for HMRC, only when all other avenues of agreement and recovery have failed.”

    Where evasion is suspected I think you’ll find ‘court as a last resort’ has been policy since long before Hartnett.

    The earliest official mention I’m sure of was 1944. A statement from the then Chancellor that (in effect) if someone co-operates, then they’ll get a civil settlement not a criminal prosecution. Been reaffirmed by many successive Chancellors.

    Used to be known as the “Hansard Extract”.

    For dodgy ‘avoidance’ schemes, I don’t think HMRC has ever been more gung ho than it is at the moment. What with follower notices, APNs and the public mood swaying judges to take the ‘intention’ of the legislation into account HMRC are having a ball in the courts at the moment.

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