From Private Eye No. 1433, 9 December – 22 December 2016, page 6 News:
“Last week’s report from parliament’s public accounts committee on HM Revenue & Customs read like a compendium of old Eye stories.
From the disastrous Concentrix tax credits affair (a “complete failure”, with “many claimants being wrongly accused of fraudulent claims” and causing “unnecessary hardship and suffering”) to misleading claims about success investigating tax dodging, the MPs’ message was unrelentingly critical.
But on one point they were wrong. “HMRC’s senior management cannot afford to be complacent about the catastrophic collapse in customer service in 2014/15 and the first half of 2015/16,” said committee chair Meg Hillier MP. The trouble is they can afford to be complacent. The price of failure is simply gratitude from government for mercilessly implementing cuts without care for the consequences.
The HMRC chief executive who presided over the Concentrix and other customer service “catastrophes”, Lin Homer, bagged a damehood earlier this year. Meanwhile, the non-executive chairman of the HMRC board since 2012, Ian Barlow, remains at the head of the boardroom table. Even the minister responsible for the tax system throughout the years that gave the country these disasters, David Gauke, was recently promoted to the cabinet as chief secretary to the Treasury. A similar performance elsewhere would have meant political oblivion. But HMRC’s cock-ups tend to hit lower-income families whose plight can be safely ignored, giving plenty of room for complancency.“
From Finance Bill Committee transcript , 17th June 2014:
David Gauke: “The consultation on the draft legislation earlier this year generated over 20 responses”
From “Tackling marketed tax avoidance , Summary of Responses”, March 2014:
HMRC: “HMRC received 847 responses to the consultation
A breakdown of the capacities in which respondents made their comments is below:
• 12 from representative bodies
• 29 from consultants
• 245 from accountancy firms
• 5 from law firms
• 547 from individuals
• 9 from other businesses “
Yes…. 847 is technically “over 20″…
Did the Minister deliberately mislead the Parliament to force his retrospective legislation through?
You be the judge…
(In fact, is this any different to when HRMC misled Parliament into passing S58 in 2008 ?Jane Kennedy later confirmed in writing that “she was told by HMRC that only a very small number of people would be affected, and certainly not the thousands that have been impacted“.
It’s this kind of “inaccuracy” that will cost average people everything, yet cost MPs and civil servants nothing. Demand accountability from your representatives! )
Tax policy confusion ‘hugely damaging’, say City lawyers
From The Law Society gazette:
“A ‘disturbing pattern’ is emerging where legislation is introduced with ‘minimal or ineffective’ consultation.
Concerns are raised that tax policymakers are ‘insufficiently conscious’ of the importance of the rule of law and over-reliant on guidance. The current government, it adds, has legislated retrospectively against certain types of stamp duty land tax avoidance schemes even though they had been known to HMRC for some time.
‘We do not consider that this is acceptable. Businesses must know that the law in place when transactions take place will be the law that applies to them’.
‘This principle is either absolute or it is nothing – once it has been broken once, further breaches are only questions of degree,‘ the committee says.“
(…and as it happens, the principle has been broken once already)
If you have been following Finance Bill 2014, you certainly know that the “Retrospective Upfront Payments” legislation is the brainchild of Exchequer Secretary to the Treasury, David Gauke.
It is most interesting to note that when he was in the opposition, Mr. Gauke once said the following to the Parliament:
“It is not acceptable that the Government permit something that they consider unacceptable to exist for some years, and then seek to introduce retrospective legislation to address it. That is what we see here.
The comments from the professional bodies are universally critical. The Chartered Institute of Taxation described the retrospective nature as “extreme” and “unjustified”, the Law Society described it as “wrong in principle”, and the Institute of Chartered Accountants in England and Wales said that “it sends out a very damaging signal about the stability of the UK tax system”.
Rather than allowing the courts to interpret [the] law, they will rewrite it retrospectively so that it says what they wanted it to say in the first place. Such an approach gives individuals and businesses no reassurance that the law is what they think it is, as it is written down and what has been passed by Parliament.
The impression is that it is something that can be changed if not at a whim, at the discretion of the Government retrospectively“
– David Gauke, Public Bill Committee debate, May 2008
The above (which be can be referred to on the Parliament’s website – the entire tirade is worth a read…) refers to the vindictive legislation termed S.58 passed in the Finance Bill 2008, which retrospectively changed the tax law on the use of a DTA and backdated it to 1987 (21 years!!). The people who joined this scheme were contractors simply seeking some certainty in their lives when faced with the total uncertainty of IR35 (more information can be found at notoretrotax.org.uk)
So… is Retrospection good? Is Retrospection bad?
Do “universally critical comments” from all professional bodies matter? Do they not?
Can such a level of duplicity be considered repugnant?
You be the judge.
BBC News: MPs raise concerns over new tax powers in Budget
(…) the [finance bill] committee also had “deep reservations” about changes to tax policy that would require upfront payment of any disputed tax associated with tax avoidance schemes.
“Retrospection should be considered only in wholly exceptional circumstances. The latest measure would have to be justified on those grounds” Mr Tyrie said.
“Retrospection puts policy on a slippery path to arbitrary taxation, discouraging investment and innovation and creating the scope for great unfairness.” (…)