Before the Panama papers…

April 4, 2016

I am writing this at seven o’clock on Monday evening, before Panorama airs its programme on the Panama papers, so it’s not based on any knowledge of the programme but on the various comments I have seen on FaceBook and other social media today.  I just want to say three things.

First, tax is not “a private matter” (as the PM’s spokeswoman apparently told The Guardian).  The Prime Minister’s salary is £143,462 and is widely used as a measure of what is meant by a substantial salary, not least in various shock horror stories in the press.  If he is also the beneficiary of an offshore family trust which hasn’t paid tax, do we really think this is a “private matter” or something which should be disclosed in the public interest?

Secondly, is it not time that we took the shackles off HMRC with regard to taxpayer confidentiality more generally?  As Jolyon Maugham has written today:

I could stand, smiling, on national news, next to HMRC’s Chief Executive and declare that I had paid every penny I owed and even if HMRC’s Chief Executive knew this [to be] an outrageous lie she would still not be able to contradict me.

Personally I can see no reason why tax returns should not be open to publication under the Freedom of Information Act, and particularly that MPs’ and Lords’ returns ought to be laid before Parliament (so that it would be a resignation matter were they found to be inaccurate).  But if that is a step too far, can those clever legal eagles amongst us not devise some form of unshackling that at the very least allows HMRC to give one of three responses when asked:

  • This person has made a return and their self assessment has not been audited.
  • This person’s self assessment has been audited and no major issues were found.
  • This person’s self assessment has been audited and either negotiations are ongoing or they have repaid £x tax plus £y interest and £z penalties.

Finally: can HMRC deal with the Panama Papers effectively at all?  By which I mean, do they have the resources?  Back in 2013 ARC, the union of senior managers in HMRC, put forward a Budget submission where they requested

Additional legal resources, 150 trained lawyers and 50 legal assistants, to accelerate litigation of the Tribunal backlog and accelerate yield.

Cost       £45.5m
Projected yield over 4 years to 2016/17       £2000m

Did they ever get their 200 additional legal and paralegal staff?  Are they now staffed to examine the panama papers and take forward any prosecutions that might arise?  Does the government seriously want them to, or would it rather they sat quietly on their hands, or “worked within their funding envelope”?

Take a wild guess.

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