Whistleblower

Whistleblower

THAT CONFIDENTIAL MEMO that was accidentally left in the photocopier, the e-mail sent 'Reply all' by mistake — they all make their way to Whistleblower. Or so he says ...

INTERNAL MEMORANDUM

From: HM Treasury

To: All Permanent Secretaries

Subject: Abusive tax avoidance.

You will recall that in both the Pre-Budget Report and in this year's Budget the Chancellor expressed his desire that taxpayers should pay 'the right amount of tax' and this year we legislated with regard to those who took advantage of the nil-rate corporation tax band by 'upsizing' their business into a limited company. We are now concerned about a new development — 'downsizing'.

News reports indicate that taxpayers no longer want to be part of the rat-race and are moving to cottages in the wilds of rural England where they will only carry out work as required to meet their reduced levels of expenditure. Our colleagues in the DTI with their ill-considered press releases on 'work-life balance' should shoulder a substantial part of the blame for this. However, the consequence is that these 'downsizers' will be paying less tax and National Insurance; patently unfair to those 'compliant taxpayers' who are prepared to work (and pay tax by reference to) the longest hours in Europe. Why does the DTI think that we opted out of the Working Time Agreement after all?

These downsizers have the ability to pay more tax, but are evading their responsibilities to society. They will still, no doubt, expect to receive the benefits of our welfare state (education, health care, pensions, etc.), whilst blatantly paying less for these. This is nothing less than 'abusive tax avoidance' and we therefore need new measures to prevent this. I look forward to hearing from heads of department, think tanks and other interested governmental bodies a.s.a.p.

Suggestions so far are that downsizers' liabilities should be linked to their previous payments for a period of years to mitigate the sudden fall off in revenue. This could include council tax as well as income tax, National Insurance, etc. After all, why should local as well as national government lose out? Perhaps part of the excess proper amount of council tax paid in the rural area should go the deprived — both socially and now economically — urban area which our downsizer has left? ('Out of the box' thinking, please.)

Alternatively, could tax liability be linked to educational achievement? We have long been saying that those with degrees can pay off university debts by obtaining better jobs; having received such a state-subsidised education what could then be less like paying 'the right amount of tax' than deliberately suppressing one's true earning power?

Imaginative linking of examination pass and tax levels now and in the future could mean that we will be able to maintain our promise of not increasing tax rates for a long time. Instead, we simply adjust exam pass rates. There is a rumour that we have been doing this for years anyway …

Issue: 3977 / Categories: