FT: “Osborne must not exploit public anger to make bad law”

George-Osborne_cFrom Financial Times :

“(…) In his recent Budget, George Osborne declared that public tolerance for people who did not pay their share of taxes had “evaporated long ago”. He seems more than willing to exploit the mood for his own ends. But while some elements of his proposed crackdown are justified, others are excessive and need rethinking. (…)

(…) One of Mr Osborne’s new measures regards individuals who declare they are in a tax avoidance scheme and then become embroiled in a legal dispute with HMRC over whether it is an acceptable one. (…)

(…) This proposal is justified. People who have entered into tax-avoidance schemes should not be granted the privilege of holding on to the disputed cash while court proceedings drag on for years. However, a controversial aspect of Mr Osborne’s plan is that this new rule will retrospectively apply in some 65,000 cases that are still being disputed. This may trigger a sudden cash flow crisis for some individuals who entered into schemes many years ago. A more general concern is that the government should only apply tax law retrospectively in the most exceptional of circumstances(…)

(…) A balance must always be struck between the power of the tax authorities to exact what is due; and the right of individuals to keep their assets protected within the law. Britain’s elaborate tax-avoidance industry must be tackled. But public anger on that issue should not lead ministers to write laws that are far too draconian.”

 

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