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Paranoid taxman swings wildly

May 28, 2014, 05:05 AM
Authors : Daniel Selwood
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Post date : May 28, 2014, 05:05 AM

Like some aging 17th century diarist full of gout and paranoia, the taxman has begun to send mean-spirited notes to people whose transgressions against him are minor or imaginary.

Taxation has become aware of a recent letter-writing campaign by HMRC compliance officers who raged against those whose “effective tax rate is lower than the average for people with a similar income to you”. The apparent (cack-handed) intention was to compel tax evaders to own up to their offences.

The standardised missive’s tone was spiteful and its wording aggressive. See for yourself. And the whole project was baffling: evaders declare falsely low levels of income on which they pay the correct tax. They don’t usually admit to every penny and then skimp on the taxman’s share.

An erroneously low tax rate most likely means an administrative error like an incorrect gift aid entry on a self assessment form or an errant decimal point in losses brought forward. Maybe a wrong box was ticked.

Doubts about a rate’s veracity led to a Revenue enquiry back in the day, and a few genuine tax-fibbers were brought to rights. Nowadays, tacit threats of criminal inquiry are made against everybody in sight.

And what a waste of time. The tax department is woefully understaffed: that is known. But limited human resources were not best used by facelessly putting the frighteners on people – who went on to accuse their accountants of all sorts of shenanigans.

It was blowback from exploding tax advisers – subjected to copies of the letter along with their client’s misplaced ire – that convinced HMRC to stop with the letters, we’re told.

Maybe now a few members of the Revenue’s (over-burdened) staff are now spending their time usefully by calmly checking shonky figures in tax returns.

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