Exposed: Taxman’s ‘illegal’ war against Britain’s small businesses. That is the title of a most interesting report in the Independent. Not so much a war, I would have said, as a shakedown.
The Government is unlawfully using late-payment penalty fines against tens of thousands of small firms who do not file their tax returns on time as a “cash-generating scheme” for the Exchequer.
In a damning judgement, the Tax Tribunal has ruled that Her Majesty’s Revenue and Customs is operating a policy of “deliberately” waiting months before alerting businesses that have not filed their tax returns so that late- payment fines stack up.
…
“It is no function of the state to use the penalty system as a cash-generating scheme,” said the judge, Geraint Jones, QC. “We have no doubt that any right-thinking member of society would consider that to be unfair and falling very far below the standard of fair dealing expected of an organ of the state.”
While applauding his judgement in this case, I question his expectations of standards of fair dealing by an organ of the state. It’s not as if they didn’t try much the same with speed cameras.
I gather HMRC are to appeal*. Confusion to their knavish schemes.
(Via Englishman’s Castle)
*This sentence originally read “I gather HMRC are appealing.” Edited for accuracy.
Speed cameras were the first thing that I thought of when other money making government scams were mentioned. One particular aspect of the speed camera scam is that there is a reversal of the presumption of innocence. The game is rigged so that even if you are certain that you are not guilty and can prove it, your easiest and cheapest option is still to pay the sixty pound fine.
Astonishing. A QC and a virgin!
From my own perspective as a lawyer, most of whose fees are meant to be settled by the taxpayer (the state being the monopoly (monopsony?) purchaser of my services, I have long been amused, and it must be amusement because it couldn’t be murderousness with rage, by the fact that that an organ (the legal services commission) of the entity (the state) which finds ever less imaginative ways of not paying me is a different organ (ie HMRC) of the same entity that requires me to pay tax on money earned but not paid by that sister organ. If you see what I mean.
It must be amusement, because the state is my friend.
According to the Economist magazine there is a “tax gap” of almost 20% in the United States.
So, the implication goes, the IRS is not tough enough – and could painlessly increase government revenue by taking the money the government is “entitled” to (by being tougher).
Natalie’s post shows what being “tougher” really means – small business enterprises utterly ruined (even if they have paid all the taxes).
And it is the same in the United States as it is in Britain.
Indeed the IRS in the United States is even worse than the tax authorities in Britain.
And yet the demand is that it be tougher – in order to close the “tax gap” and so on.
Every person is to be assumed guilty – and treated like a criminal.
The idea that such a policy will have beneficial economic effects (“reduce the deficit” and so on) is demented.