More News of the Taxman. Clearly, Not Paid To Be Generous.
In earlier Blogs links here and here I ruminated about the apparent wish of the Government that we should all “do the right thing” and pay full tax without seeking any avoidance opportunity. This on the basis that such opportunity as there is to avoid tax, might not have been intended by Parliament.
A difficulty there, it seems to me, is that it is hard to know what tax rules were made on purpose and which by mistake.
Nevertheless, the Chancellor wants the taxpayer to play nicely; if ever we think that the present tax rules seem a bit generous, let’s pay the full whack in case it’s a mistake.
And for its part, HMRC is apparently quite downhearted when it finds that it has taken tax which was not due – as reported in the case of Jim Dooley, reportedly owed a refund of £60,000.00 – “It might appear unfair to deny a customer [yes, you and I are the Customers of the Revenue, not that we are allowed to shop elsewhere] the opportunity to recover tax that may not have been due”
But in that case the tax was paid too many years before the claim for refund and so the Taxman had to obey the law and refuse to help. Presumably, a law which Parliament did intend.
The implication of the Taxman’s statement about unfairness could be understood to be that, had the law not prevented it, then a full refund would have instantly been provided wrapped in festive gift-wrap and possibly with a cake.
So we might be forgiven if we suppose that – in a case where the HMRC does have a discretion – then it also will be quick to “Do the right thing”
Some will be disappointed to read of the case of John Clark -V- HMRC. Here the taxman’s opinion of what might be the “right thing” is shown to be less than liberal.
The case report is here in full. In brief, a person with learning difficulties – the mental age of a primary school child, also unable to communicate in writing due to dyslexia, has worked three days a week self-employed as a decorator over two years or so. He looked after his daughter alone. He suffered from depression. In 2006 his house was burnt down. His wife has died.
It is the sort of list of hardships which Charles Dickens might have rejected as too obvious for fiction.
The tax demanded was a sum which the HMRC had made up, by reference to the income of other self-employed decorators. It is not known whether those other decorators were suffering learning disabilities or the other slings and arrows of outrageous fortune afflicting Mr Clark. There is no evidence that his earnings justified such taxation. The judge found at the hearing that no tax had been due. The Revenues made-up figure was £17,779.94.
The Tax Tribunal described the actions of the HMRC as “unreasonable and unconscionable.”
Of course, the taxman is not in place to be liberal, and the Country has not voted for the Liberals.
It is the job of the taxman to collect every penny of tax that is properly due and no-one should doubt that hospitals and schools and benefits have to be paid for.
So perhaps the element of this case that should cause the Revenue to shed a collective tear is not its apparent heartlessness so much as its wilful stupidity coupled with a degree of incompetence. To say nothing of wasting, rather than collecting money.
If the Country is to pay for its Army its doctors its teachers and all of the other colossal burdens on the National budget, perhaps its tax collectors should concentrate on better targets than mentally frail single parents with no money.
Whilst HMRC is unlikely to say so in any publicity materials [“Tax does not have to be taxing” – anyone?], it may well agree this case was not its finest hour.
George Harrison had his own view – link here
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