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Most clients see tax as a bit of a necessary evil … Probably the best way to sum it up would be one client who said, “I don’t mind paying my tax, but I don’t want to leave a tip”.’
This quote from the research report, How can HMRC encourage more co-operative relationships with the wealthy and their agents? (tinyurl.com/hmrcrrwcjun), made me smile.
The report presents a broadly recognisable picture of the current tax landscape for the wealthy. On avoidance it concludes that, while it has not disappeared, it has become much less prevalent. This might reflect a recognition that avoidance is becoming socially unacceptable, but the reality is the increasing acceptance that the chances of schemes working has become vanishingly small and that it is simply not worth implementing them.
What struck me, however, was high earners’ desire to get their tax affairs done and dusted. Many are used to making deals and cannot understand why tax disputes cannot be resolved through tough negotiation and compromise in the same way as everything else in their commercial life. As one agent put it: ‘My key recommendation would be for HMRC to get out of its litigation strategy. It’s a nightmare for HMRC, a nightmare for the client and I don’t think it represents value for money for the taxpayer.’
There is some praise and a fair amount of criticism of HMRC in the report. But this is not all one way. Here is a final comment for us all to ponder: ‘I don’t have any agents or advisers. I don’t even have a financial adviser. I have had in the past, but I just don’t trust them to be honest. They are all just desperate to get their hands on your pension and all the fees they can get with that.’
