An acceptable level of tax dodging

You know, of course, that we\’ve The One who tells us that all we need to fill the deficit, all we need to do to make the nasty there is no money tree problems go away, is to hire more taxmen and point them at all those nasty tax dodgers.

That he\’s paid by the taxmens\’ union is of no matter for of course he is The One.

An internal review of HM Revenue & Customs\’ \’Business Records Checks\’ initiative found that it had been poorly targeted, overstated how much it would collect for the Treasury and damaged the taxman\’s relationship with accountants and business groups.

Oh. It would appear that it\’s not all quite that simple.

The review also slashes HMRC\’s projection of how much the initiative will collect for the Treasury over four years from £600m to £124m.

It really isn\’t. And that\’s without counting the loss of the time the businesses themselves are answering HMRC questions instead of actually doing something.

As I\’ve pointed out before, there\’s an acceptable level of tax dodging. A level which it really isn\’t worth trying to stamp out. Not that The One agrees with me, but then I\’m not paid by the taxmans\’ union either.

5 thoughts on “An acceptable level of tax dodging”

  1. A level which it really isn’t worth trying to stamp out.

    Which is, allowing the presumption that society not only obeying but being seen to obey “the rules” (we can argue about how many ‘rules’ there should be later), going to be somewhere beyond the point where the revenue breaks even. Depending on how strongly you agree with the presumption depends where you would place the “stop stamping point”.

    If you disagree with the presumption entirely, of course, you’d place it somewhere before to take account of the opportunity costs of having taxmen, the deadweight costs of taxation etc.

    If, on the other hand, you’re Ritchie, and are therefore the one and only true interpreter of the spirit of the law, then you are going to need a small army of henchpersons to stamp your interpretations on the forehead of society.

  2. The Business Records Checks aren’t even about enforcing tax. HMRC come round and check that you’ve filed all your chits nicely, and fine you if you don’t.

    From what I’ve read, the quality of the checkers is not very high.

    Indirectly there might be some tax enforcement, if having better records means more accurate tax returns.

    But I’d guess that better records would mean less tax, because people aren’t going to lose their expense chits so will claim more expenses (and it would be easier to get your return in on time, so fewer fines for HMRC to collect).

  3. Richard,

    Absolutely endorse that last statement. My record keeping for 2010-11 was light years better than my record keeping for 2009-10. Consequently, it turned out, HMRC owed me enough money to wipe out nearly half of the payments on account for 2011-12. Not I think the outcome The One would expect.

  4. I was chased by HMRC for 5 years worth of self assessments about 7 years ago.

    Once my accountant had done the sums it turns out HMRC owe me £16K which they pay up.

    They alo tell me I don’t need to do a self assessment again in the future. Haven’t done one since.

    And I’m easily a higher rate taxpayer…

  5. Strangely, once I’d worked out that I could claim for another relief on the self assessment form – resulting in a refund from the tax bastards – they told me also not to fill in a self assessment form in future.

    I sense a pattern forming…

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