THE UNACCOUNTABLES
Over the last few years there has been a definite move within the Inland Revenue (sorry – Her Majesty’s Revenue & Customs) to become less accountable for their actions. This has been witnessed by accountants in various ways, including the withdrawal of telephone contact with Tax Inspectors and the dogged tenacity of said Tax Inspectors to spend hours and hours in an enquiry to squeeze an extra few pounds of tax out of the targeted victim.
As an accountant in practice I regularly receive letters from Tax Inspectors regarding my clients. Sometimes these require a response, perhaps one which a quick telephone call could deal with. But more often than not the telephone number on the letter is that of a call centre. The call centres cannot put you through to the Inspectors and I have recently been told that the call centre operative “will decide whether you speak to a Tax Inspector”. This is a terrifying view of power being passed across to (sometimes not very) Civil Servants.
Even when you speak to the call centre, they will not give you a telephone number for the Tax Inspector claiming that they do not have it. It would appear that the current thinking is to place Inspectors in ivory towers totally removed from the reality of the everyday world where they can perform their duties in peace and quiet.
More worrying has been the increase in instances where Inspectors have obviously spent a great deal of time going through client’s papers in an attempt to eke out an additional few pounds of tax and, presumably, extra brownie points. In a recent enquiry we had three letters arguing over what was and was not allowable expenditure. In the end the client gave way on the grounds that my time costs were greater than the tax payable – this is an incredibly worrying as an approach. If the Tax Office were a business it would probably have gone bankrupt – how about a sensible cost/benefit analysis?
One very interesting area is that of education. The Government has been banging the education drum since coming to power and Mr Brown made a big song and dance about it in his last budget. But Tax Inspectors are repeatedly trying to argue that Continuing Professional Development is not an allowable expense. Could Mr Brown and Mr Blair please have a word with them and obtain some consensus.
Another very worrying aspect that I have come across in recent months is where Tax Inspectors openly admit that they have no knowledge of the sector in which a client operates, but then try to dictate which expenses are allowable. Power linked with ignorance is a very dangerous animal.
The much-heralded Tax Payers Charter, which was introduced by John Major, was quietly laid to rest back in 2003 by a unilateral decision of the then Inland Revenue; not a lot of people know that. It is interesting to note the publicity (or lack of) given to its demise as compared to its birth.
Perhaps it is time that the activities of HMRC were looked at in a subjective way rather than the apparent present approach of squeezing every possible penny out of the British Tax Payer. Perhaps then less of our skilled workers and specialists will be leaving this country heading for the antipodes.