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A no brainer.

December 6, 2012

“Anyone with a home worth over £1million now facing a visit from elite tax inspectors” Well, up to a point, Lord Copper!

Let’s have a look, shall we?

The announcement was of a further 100 staff for the “affluence unit”, the bit of HMRC that looks at the tax affairs of people with more than a million quid. As the Telegraph article says

The unit, comprising 200 investigators and technical specialists in six locations across the UK, focuses on people who are evading or avoiding tax.

And, looking for the official announcement that was the initial impetus for this non-story, I see that Danny Alexander announced the unit was expanding from 200 to 300 staff, and with a remit to look at people with £1 million rather than, as before, £2.5 million.

OK then.  So how many millionaires are there?  The Treasury press release estimates half a million but – going back to The Telegraph, where we started – that seems to be a pre-crash figure and their current estimate is 280,000.  I’m not saying I prefer the Telegraph’s figures to the Treasury’s, you understand!  But let’s be generous and take the lower figure.

So we have 300 HMRC staff looking into the tax affairs of 280,000 people.

280,000 divided by 300 is 933.333 according to my calculator.  So let’s round it down and say each of these HMRC staff deals with the tax affairs of 900 millionaires.  Yes, according to the Telegraph’s own figures each worker in the Affluent Unit will need to spread their investigative powers over 900 millionaires.  According to the Treasury’s, over perhaps twice that.  Where on earth will they find the time to go nosing around blameless individuals whose houses have just drifted up in value?  It’s scaremongering, forget about it.

What is more interesting is the announcement that HMRC will have more resources in the autumn statement.  It’s here, in line 32 of the policy decisions:


 £ million
 Head 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
+
32 HMRC investment Spend -10 -80 -25 0 0 0

Ten million in the current year, eighty million next year, £25m in the final year of the coalition and then zilch.  Hmmm… David Gauke’s written ministerial statement on December 3rd clarified this a bit: the 100 staff for the affluent unit are in there, plus some warm words about transfer pricing and centres of excellence.  But the figures are a bit off:

 A further £77 million will be provided to HMRC in this spending review period to further expand its anti-avoidance and evasion activity focused on offshore evasion and avoidance by wealthy individuals and by multinationals.

Well, 10+80+25 = 115 in my book, so if HMRC are getting 115 million and using 77 million on anti-avoidance and evasion, what are they going to use the other  38 million on, do we think?  I’m sure it’s hidden in the small print somewhere but I haven’t come across it yet – anyone?  (maybe they’re upping the £42 they can spend on each business for RTI by another, erm, sixteen quid apiece?)

But look here, at the ARC union website.  Now, ARC stands for Association of Revenue and Customs senior staff and it’s the branch of the FDA which covers senior staff in HMRC, tax inspectors, lawyers, senior managers and a bunch of other professions, economists and the like.  And they have a paper, Reducing the UK Tax Gap – Proposals from ARC. (which isn’t exactly prominent on the site, but if you look at the entry for December 3rd you’ll find it in the “notes for editors” from a press release they apparently put out on 30th November, presumably by leaving it in the statutory locked filing cabinet in the basement office marked “beware of the leopard”!)

What interests me is the suggestion that you could put resources into HMRC’s legal services:

Additional legal resources, 150 trained lawyers and 50 legal assistants, to accelerate litigation of the Tribunal backlog and accelerate yield. Cost £35m. Projected yield £2000m

One of the things that worries me about the extra hundred staff for the affluent unit is, where are they going to come from?  Because trained tax professionals don’t actually grow on trees, and HMRC has always been rubbish at planning for the future and making sure it has enough trained tax professionals coming online to replace natural wastage from retirements and resignations.  You can’t just go out and hire a hundred trained tax professionals – largely because the accountancy profession, where you might find people with at least analogous skills – pays a damned sight more than HMRC.

But you could go out and recruit a hundred and fifty lawyers tomorrow.  Because lawyers train themselves, or at least pay for their own training, and there are supply and demand issues in the legal profession which there aren’t in tax at the moment.  So you couldn’t find 150 trained tax lawyers – they get shedloads more than HMRC tax lawyers, I’m told.  But you could get 150 criminal lawyers, trained litigators, and start taking some of the backlog of tribunal cases to tribunal as fast as the tribunal could accommodate them.

ARC think an investment of £35m could bring in two thousand million.  And HMRC seem to have £38m left over, so it’s a no brainer, surely?  Why on earth not?

Posted in Avoidance, Bit of politics, HMRC, HMT | Tagged , | 1 Comment »

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Don’t ask me?

November 23, 2012

I had a very kind note from a reader which said:

Hi Wendy

I suspect that the Government is getting fed up with your repeated responses to consultations – they are not used to people actually responding. The reason I suspect this is that they appear to have changed the rules on time allowed for responses, to give you much less time to get your thoughts together.

Much as I would like to think that I had some power over the government’s actions, I don’t think it’s just me!  As I mentioned in an earlier post, the Cabinet Office has already quietly posted some revised consultation guidelines onto its website.

And on 14th November BIS responded to a Freedom of Information Act request I made by saying amongst other things that

You asked for agendas and minutes from the last four meetings of the consultation co-ordinators. Our records indicate that the consultation co-ordinators have not met for over 18 months, and prior to that we have no agendas or minutes held on file. We believe some Departmental Better Regulation Units might still run their own consultation discussions, but the Better Regulation Executive has not been advised of any such meetings.

I deduce from those two pieces of information that there hasn’t been a Whitehall wide discussion that has led to the restriction on consultation deadlines but that someone else, someone central, is driving this change.

My guess would be that the person in the driving seat is Oliver Letwin, if only because he is the Minister of State in the Cabinet Office in charge of Getting Things Done (or, at least, ensuring that the government carries out its programme)

And, interestingly, he is appearing before the Merits Committee, or, as they are now called, the House of Lords Secondary Legislation Scrutiny Committee on 11 December to give evidence on exactly this point, the new approach to consultation.

There was a Guardian Public Leaders Network discussion of this issue last week which is worth a read (if only because it was the first time I’d come across the charmingly-named outfit “Guerilla Policy” – see here for their thought-provoking piece on the class element in consultation) and there is a call to arms from the institute of Employment Rights.

The message from all of these is: you have another week.  If you have thoughts (and, more particularly, evidence!) about how consultations work and whether the twelve week expectation is a Good Thing or not, well, you should put your evidence in to the Lords to inform their discussions with the Minister.

Yes, I shall be responding.  But the Secondary Legislation Scrutiny Committee takes ownership of submissions and may publish them in due course:

Submissions become the property of the Committee which will decide whether to accept them as evidence. Evidence may be published by the Committee at any stage. It will normally appear on the Committee’s website and will be deposited in the Parliamentary Archives. Once you have received acknowledgement that your submission has been accepted as evidence, you may publicise or publish it yourself, but in doing so you must indicate that it was prepared for the Committee. If you publish your evidence separately, you should be aware that you will be legally responsible for its content.

so I think it only polite to wait and see what response I get.  But please note that this is a call for evidence and the Committee specifically asks for signal boost:

This is a public call for evidence. Please bring it to the attention of other groups and individuals who may not have received a copy direct.

In other words: tell your friends!

Posted in Bit of politics, Consultation, Reference | Tagged , | 2 Comments »

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Starbux redux

October 19, 2012

So the original Reuters investigation into Starbucks’ tax position reported that

There is no suggestion Starbucks has broken any laws. Indeed, the group’s overall tax rate – including deferred taxes which may or may not be paid in the future – was 31 percent last year, much higher than the 18.5 percent average rate that campaign group Citizens for Tax Justice says large U.S. corporations paid in recent years.

But on overseas income, Starbucks paid an average tax rate of 13 percent, one of the lowest in the consumer goods sector.

After the press furore earlier in the week there was also, as you would expect these days, a bit of a twitter flurry about the circumstances around the whole position.  The point I hadn’t picked up on earlier was that the 31% tax figure in the US consolidated accounts may not represent tax actually paid.  It might simply be a provision for the tax that they would have to pay if they eventually distributed the profits back to the US.

Which is the same as paying it, right?  Just paying it next year rather than this?

Well no, actually, or at least not necessarily.

In 2004 there was a weaselly-named piece of US legislation called the the American Jobs Creation Act of 2004.  The premise was that, if US-based multinationals repatriated the profits they were keeping offshore they would use the money to create jobs, no, honest, guv.  So wouldn’t it be a good idea to offer them a tax break to do so?  Instead of charging them, say, 35% tax, just charge them 5 and a quarter per cent.  Because, you know, half a loaf is better than none, so 5.25% of a squillion is a lot better than 35% of nothing, and look at the jobs that would follow!

Yes, look.  Apparently – and I’m shocked, shocked! to read it – the companies took the money AND cut jobs at the same time.  Stellar!  As the Congressional Research Service politely puts it,

While empirical evidence is clear that this provision resulted in a significant increase in repatriated earnings, empirical evidence is unable to show a corresponding increase in domestic investment or employment.

I don’t know much about US politics except what I see on the news or read online, but I gather that there is lobbying afoot to introduce a similar tax break again…

But I stress, this isn’t about Starbucks or any other multinational.  It’s about regulatory capture of nation states by multinationals, so that tax arbitrage – finding the jurisdiction with the lowest effective tax rate and putting your profitable operations there – becomes a legitimate way of structuring your business.  And for governments it becomes routine to be offering a ludicrously low tax rate in the hope that multinationals who relocate will at least let you have crumbs from their table in sales taxes (VAT)  and the personal taxes you can levy on their employees (PAYE).

But as Richard Murphy points out, this is privileging large multinationals over indigenous small businesses.

Hmm… has anyone else noticed the disappearance of the Small Firms Impact Test from the BIS website since Michael Fallon took over from Mark Prisk?  (Was it something I said?)  I put in an FoI request a while ago to see the minutes of the cross Whitehall Better Regulation, consultation and economist networks’ meetings and am being fobbed off that they need time to think about it, because it may be exempt under the “formulation of government policy” exclusion, apparently.

What policy could they possibly be formulating?

Well, the coalition have already thrown away the rules about consultation, quietly slipping a new set of guidelines onto the Cabinet Office website.  And, if you look very, very closely at the last line (item 9) of this very boring and obscure document about Changes to Impact Assessment and Regulatory Policy Scrutiny, you’ll see that

A full update to the IA Guidance will be issued in the autumn, following the conclusions from the Better Regulation Framework Review.

Google “Better Regulation Framework Review” and you’ll find one hit, the link above (actually you may now get two, one being this blog)   But my point is you won’t find a public announcement of any such review.  Who’s conducting it?  What external input are they having into it?  And who will lay me a tenner on the Small Firms Impact Test making it into the next version?  Interesting times!

Posted in Bit of politics, Consultation, Regulation, SFIT | Leave a Comment »

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Company time

October 16, 2012

HMRC have issued a spectacularly ill-timed briefing on Taxing the profits of multinational businesses which purports to explain – to MPs and other stakeholders, in a glossy leaflet paid for our of your and my taxes – how the tax system applies to companies based in more than one country.

Like, oh, Starbucks, for example? In a fine piece of investigative reporting, Reuters reports that Starbucks reduced its UK corporation tax to nil for the past three years by, amongst other things,

  • roasting its beans in an Amsterdam subsidiary instead of in the UK
  • paying interest on loans to other group companies outside the UK
  • paying a royalty for “intellectual property” for the use of its brand name and business processes

Let’s see what guidance the HMRC leaflet gives to our MPs and other policy makers on how this might have come to be and what we can expect them to do about it, shall we?

HMRC is alive to the risk that multinationals may try to structure their affairs so that profits from economic activity carried on in the UK are not taxed here.

Oh, well that’s good, isn’t it?  HMRC is “alive to the risk”?

What are the government doing to counteract that risk, then?

Because HMRC are nice to business, honest.

HMRC seeks to develop open and co-operative relationships with multinational businesses. In the vast majority of cases, we can reach agreement about what the right amount of tax is. Where we cannot reach agreement, we take a robust approach and take large businesses to court, where necessary, to secure the right amount of tax.

Taking large businesses to court?  Well the number of prosecutions is about the number of hens’ teeth – around 50-100 a year it seems, most of which will be clear-cut small-fry tax credit fraud cases and the like – obvious cases, where the offence is easy to understand, the guilt is easy to prove, and the numbers are peanuts but useful to discourage others.  The HMRC prosecutions policy is here, but the bit to notice is that it’s NOT the policy to prosecute in most cases.  The Civil Investigation of Fraud is the more likely process if you’re a multi-national:

It is HMRC’s policy to deal with fraud by use of the cost effective Civil Investigation of Fraud (CIF) procedures, wherever appropriate

Wait a minute, though!  No-one is suggesting Starbucks have done anything criminal, nor anything fraudulent-but-not-quite-criminal!  In fact from the newspaper reports Starbucks seem to have reduced their UK tax take to nil by using entirely legal means, means which are sitting right there in the face of the UK tax code.  They’re not legally or morally bound to pay anything else!  So what does the government mean when it says it will take large businesses to court where necessary?

Well, here’s HMRC’s Litigation and Settlement Strategy.  Most tax disputes are settled by the accountant and the tax inspector arguing the point across correspondence and meetings until either they reach a meeting of minds, a compromise, or, yes, have to go to actions set out in the Litigation and Settlement Strategy.  Assuming there’s some sort of appeal in place that can be litigated, the two sides go to the Courts and Tribunal Service and argue their point in front of the Tax Tribunal

HMRC obviously can’t comment on an individual business’ affairs so can’t really tell us whether they think Starbucks’ tax bill is correct or not, or whether it’s under investigation or not, or even whether there’s any litigation in prospect or not.  Does Starbucks avoid UK tax or not? Let’s give the HMRC leaflet the last word.  My emphasis, though!

Globalisation means that multinationals have the opportunity to structure their business to take advantage of beneficial tax rules in different countries. Provided that this results in profits being taxed in line with where genuine economic activity is carried on, this does not amount to tax avoidance.

Posted in Bit of politics, HMRC | Leave a Comment »

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Bread AND roses

September 17, 2012

I’ve always thought the suffragists and the wobblies had it right about bread and roses:

Our lives shall not be sweated from birth until life closes;
Hearts starve as well as bodies; give us bread, but give us roses.

In other words, it’s not just the “bread and butter” financial issues that campaigning organisations need to think about but the “roses”, the things that could otherwise be put aside with the derisory label “pink and fluffy” – like equality issues, support for the arts, anything outside of the narrow horizon of simply keeping body and soul together.

So when we have a government that thinks we need to cap benefits to reduce taxes and frames its agenda in terms of an unprecedented financial crisis it’s good to see any consideration being given to the roses of, say, the television industry.

But I can’t get excited about the consultation into creative sector tax reliefs.    The consultation is into applying something like the tax scheme that works for film production to three other areas: animation, “high end” television drama, and video games.

In contrast, the government will give Arts Council England £360m this year,  around thirty per cent less than the £400m+ it has had for the last five or six years.  Against that, the amounts shown in the tax impact assessment (in millions) for the three categories of business covered by the consultation are relatively small:

Animation Television Video Games
2012-13 0 – 0
2013-14 -5 – -10
2014-15 -10 – -25
2015-16 -15 – -25
2016-17 -15 – -25

Considerably less, in fact,  (max of £15+£25m in one year) than the government has already taken from the Arts Council.

So why did I not respond to the consultation?  Not because the numbers are small – lots of the consultations we’ve looked at so far have been in the why the heck are you spending time and money asking about it if it makes no difference category.  Not because I don’t care about the subject – it would be hard for more than the three people involved to get truly passionate about, say, the taxation of unauthorised unit trusts or time apportionment reductions on life insurance policies.  I didn’t respond to this one because… well, because it’s OK.

I mean, the general principle of giving tax breaks to creative endeavour seems OK to me – whether or not you agree we have money to give to the arts, it seems sensible not to take too much from them, like not eating your seed corn.  Bread AND roses, right?

And I think they’re asking the right people – even though the amounts involved are ludicrously small in context, there are three working parties of industry representatives working with the Treasury and HMRC.  And they seem to be asking them the right questions: working on things like coming up with a workable definition of a distinctively British television programme, or how to avoid giving tax breaks for video games which are pornographic, or how do you define “animation”.

So, just this once, I’ll pass, thanks.  Keep calm and carry on!

Posted in Bit of politics, Consultation | 1 Comment »

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Wouldn’t it be nice…

September 14, 2012

…if we treated our paralympians and other fellow citizens with disabilities or terminal illnesses the way we treat our tax avoiders?  I’ve just written a long post, below, in response to a consultation about the General Anti-Avoidance Rule Notion.  I just wanted to pick out one small aspect of that suggestion, the proposed definition of abuse.

Tax arrangements are “abusive” if they are arrangements the entering into or carrying out of which cannot reasonably be regarded as a reasonable course of action, having regard to all the circumstances…

This is called the double reasonableness concept: it’s not enough that the action is reasonable, it also has to be reasonable to regard it as reasonable.

Wouldn’t that be a great way of re-testing disabled people to make sure they’re still entitled to disability benefits?  Say something like

Disability assessments are “abusive” if they lead to an action such as the removal of benefits which cannot reasonably regarded as a reasonable course of action, having regard to all the circumstances…

Just a thought.  (but the consultation on the tax GARN closes today.  You’ve still got time to drop them a line at study.gaar@hmrc.gsi.gov.uk suggesting they pass on their double reasonableness test to the DWP…)

Posted in Bit of politics, Equality | Tagged , , | 1 Comment »

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Residence

September 12, 2012

I really wish I could care about the consultation on a statutory definition of tax residence, honestly I do.  I mean, I’m sure it’s a good thing to give simplicity and certainty to people whose residence status might be in doubt, and I’m sure all the work that has gone into the initial consultation, the responses document and the current consultation has been carried out diligently and intelligently and will produce the right result in the end.

Only why couldn’t we just copy out the same rules the Americans use?  The ones that fit onto one sheet of A4?

Oh, that’s right, because Americans have sensible rules “If you are a resident alien, you must follow the same tax laws as U.S. citizens. You are taxed on income from all sources, both within and outside the United States.”

In the States, the first determinant is citizenship – if you’re a US citizen, you pay US taxes, and you don’t have to faff about with residence and ordinary residence unless you’re in a non-citizen-but-still-living-there category.

Here, we still retain the imperial concept of “domicile” – if you were going out to rule the Empire, you were still an Englishman even if you never set foot in blighty till your corpse was shipped home for burial. Which might have made some sense when we HAD an Empire, but, you know, That Sun Has Set.  Now we are only a tax haven, inviting anyone filthy rich enough to settle here and pay us £50k in blood money and we won’t bother them about taxes because that’s only for the little people.  Oh, and if you’re starting to make serious money, check out your family tree – if your grandfather was born somewhere interestingly foreign or if you suddenly develop a passion for Belize then you too could become a non-dom

So you’ll forgive me if I can’t get too fussed about the detail of how to legislate the residence conditions.  The tax impact assessment shows that it’s “expected to have a negligible Exchequer impact”.  Well, what about tackling the other side of the coin and doing something which would have some impact?  Let’s stop being a tax haven, make citizenship and taxation go together, and stop faffing about.

Posted in Bit of politics, Consultation | Leave a Comment »

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Forty two

September 11, 2012

How many employers are there in the UK?

Well, the Federation of Small Businesses says there are about four and a half million small businesses in the UK and about a quarter of them are employers. So let’s suppose there’s one and a half million, plus another few thousand of the very largest businesses not covered by the FSB.

HMRC makes it rather more: 2,351,620 to be precise, if you add up the figures for employers on the timetable for rolling out RTI (figure 6 on page R25 of their latest annual report.)   This seems more plausible: there are nearly thirty million people in work, after all.  And HMRC ought to know: they’re the ones who are implementing radical changes to the way that all employers have to operate the PAYE system, moving them over to RTI.  So they have planned for the numbers in their table:

  1. Control group and first stage pilot.  Around 320 employers.
  2. Pilot: around 1300 employers
  3. Extended pilot: around 250,000 employers
  4. Main migration: around 2.1 million employers.

Please check my adding up, but I make that around 2,351,620 employers altogether, right?

I’m a bit worried about that.  Principally, that it’s all a bit quiet, and those two million three hundred and fifty one thousand, six hundred and twenty employers aren’t going to know about, let alone be ready for, RTI coming at them like a steam train.  After all, the government has abolished its own advertising agency and radically cut down the amount it spends on getting information to us.  And, serendipitously, it seems I’m not the only one, because Steven Timms asked David Gauke how much money HMRC had set aside to publicise the changes. 

The answer seems to be, well er… none, actually.

Or rather, communication is part of the overall cost of RTI, which the Minister helpfully tells us may amount to £108 million.

Do the math with me here. Counting just the small businesses covered by the FSB (and not the large ones where, so far, most of the education and support has been targeted) and not including the people who have employees but who aren’t businesses, like people with nannies and people given budgets and told to go off and employ their own careers…

The smallest number of businesses likely to be affected by RTI is, well, for the sake of the mental arithmetic let’s say that a quarter of the FSB’s four and something million amounts to ONE million employers.

On whom HMRC can spend 108 million quid?  Ok then – lets say changing HMRC’s computer, building the free software for micro business employers and doing all the other techie stuff only came to 8 million. It won’t, is my guess, but you see where I’m going with the numbers.

That gives HMRC 100 million to spend on education and communications for 1 million businesses.

A hundred quid each?

That won’t get you one person from each business going on a course, or even having a couple of phone calls with HMRC’s helpline. Its… It’s peanuts.

Divide that theoretical hundred million by the HMRC number of 2,351,620 and you get … £42.

(Well, OK, £42.52, but still.  You really couldn’t make it up.)

Posted in Bit of politics, Employment, HMRC, RTI | 5 Comments »

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Hang on, lads; I’ve got a great idea

August 31, 2012

Yesterday I suggested that a land tax might be a good idea and tweeted and facebooked a link to the blog entry.  Here’s the subsequent thread of facebook comments (names redacted, but number 3 was me)

  1. Give me the wealth and I’ll give you the tax.
  2. Nah: beard, hearth and window.  A return to the old values.
  3. Beard tax! Oh yes, let’s do that one!
  4. Can I now be a member of an irrationally oppressed minority?
  5. If we didn’t have to pay tax the country would become a lot wealthier.  Of course no schools and hospitals or police or NHS.  I agree with you, Wendy; a Beard tax will do.

And, you know, it being Friday and all, I got to thinking.  What ABOUT a beard tax?  So here’s the draft TIIN.

                                                                                                                                                                                           

Tax Information and Impact Note for the introduction of the Beard Tax

Who is likely to be affected?

This measure applies to all natural persons resident or ordinarily resident in the UK, and to all natural persons visiting the UK for more than 20 consecutive days.

General description of the measure

This measure requires any natural person present in the UK to pay a levy if they wear a beard.

Policy objective

This measure supports the Government’s objective of a more competitive corporate and personal tax system to provide the right conditions for business investment and growth, by putting the onus on the taxpayer to decide whether the ambition to demonstrate facial hair growth outweighs the requirement to pay the tax.

Detailed proposal

This measure defines “beard” as a facial hair density (“fhd”) (not including vellus hair) of more than 13 hairs per square inch (“psi”) over the “chinbeard” area.  This area is defined as the area surrounding a natural person’s mouth measured from

  • below the eyes
  • between the ears
  • to the topmost point of the Adam’s apple

Any person with a chinbeard fhd of 13 psi and above is subject to the tax, which will be calculated on a daily basis.  Beards, sideburns, moustaches and other facial extrusions will, should their root be within the chinbeard area and their length be greater than 0.005 inches, be included in the calculation of the chinbeard fhd.  In other words, a particularly stupid moustache may also qualify as a “beard” for these purposes.

Any person with a 13 psi fhd at 8.30 am will be liable to the tax for that day and must, if challenged by a properly accredited officer of HMRC, be able to produce a Beard Tax Token for the day in question (these will be available either as a token or as an electronic card obtainable from HMRC which may be “topped up” at any cash machine) or be subject to the Beard Tax Token Penalty (initially £50, rising to £100 a day.  And, for repeat offenders, waxing.)

Summary of impacts

Exchequer impact (£m)

This will be calculated by taking the expected deficit, dividing by the number of beard-wearers estimated to be affected, divided by the number of days in the year, and then charged on a daily basis.  The final figures will be subject to scrutiny by the Office for Budget Responsibility, and will be set out at Budget 2014.

Economic impact

The measure is not expected to have any economic impacts.  Clearly razors and shaving cream will be banned under the associated anti-avoidance provisions which may impact on the steel and pharmaceutical industries but any impact is expected to be negligible.

Impact on individuals and households

Individuals subject to the tax will make a daily choice between shaving before 8.30 or self-certifying for the tax and acquiring the necessary token.  It won’t take but a minute, honest.

Equalities impacts

No different impact on any equality group has been identified. (Ed: that’s what we usually put, I think.  We aren’t going to get any comeback from the bloody feminists this time are we?)

Impact on business including civil society organisations

This measure is not expected to have an impact on businesses or civil society organisations.

Operational impact (£m) (HMRC or other)

This measure will not have any impact on HMRC’s operating costs.  Yes, I know they’ll have to chase around checking whether the beardies have bought their tokens but they’re not getting any more money out of us for it.  Hell, I don’t know.  They can close down another contact centre or something, can’t they?

Other impacts

No other impacts have been identified. (Ed. That’s what we usually say, isn’t it?  The tree-huggers aren’t going to kick up a fuss and say we’re, I don’t know, putting up heating bills by losing facial insulation or something?)

Monitoring and evaluation

This measure will be kept under review through communication with affected taxpayer groups. No, really.

(Note: economic impact edited, as I had neglected to avoidance-proof the first draft!)

Posted in Bit of politics | 4 Comments »

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Bit of politics

August 30, 2012

I had two immediate reactions to Nick Clegg’s “wealth tax” proposals. First of all, the obvious “politics of envy” jibes from the Tory benches were really annoying in the current climate: yes, let’s freeze salaries, raid pensions, screw the disabled and sell off the playing fields, but heaven forbid we should be “envious” of our betters!

“But we also have to be careful as a country we don’t drive away the wealth creators and the businesses that are going to lead our economic recovery.”

says George Osborne. Funny how the “wealth creators” need to be motivated by giving them money and the ordinary person by taking it away. And how is that “trickle down economics” working out for the States, hmmm?

But I’m afraid as a former tax professional my first thought was “that won’t work”. A wealth tax? Define “wealth”. Are the Queen’s diamonds “wealth”? What if they were in a safety deposit box in a Swiss bank?

The costs of calculating, collecting and enforcing a “wealth” tax are likely to outweigh the benefits, particularly if it’s only to be a one-off levy.

But I’ll tell you what would work. A one off levy on land. You know where it is, you know (or can calculate) what it’s worth, and, with a firm deadline that says someone – and we’re not going to argue with you about who, so you can set up as many offshore trusts as you like – has to pay the tax by Land Tax Day or else the land itself is forfeit – simple to administer.

I’d like to see the cost benefit analysis for it. Anyone want to have a go at drafting the impact assessment???

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