Thursday, October 20, 2011

UK: The man who taxes our belief in fair play

Over the next few days, seven million citizens across Britain will discover whether they are winners or losers in the great tax lottery.

The familiar beige envelopes, stamped with the words ‘On Her Majesty’s Service’ will land on doormats up and down the land, informing us if we are among the losers (more than 150,000 of whom are pensioners) who are deemed to have underpaid their taxes — or the winners who have overpaid and can expect a refund. And all this is thanks to the incompetence of the tax authorities.

For ordinary, hard-pressed households, already reeling from surging ‘green’ taxes on energy bills and inflation at more than 5 pc, the horror of the tax collector bearing down upon them is, in many ways, the final insult.

One of the great qualities of a civilised Anglo-Saxon democracy is that most people regard taxation as a civic duty, which they fulfil honourably, if not with relish.

For individuals and small businesses, Her Majesty’s Revenue & Customs (HMRC) automatically raids our pay packets every month through PAYE and removes an ever-increasing share of our income. But if you are a major corporation, paying taxes is not such a cut-and-dried exercise, because of fiendishly complicated regulations, which have led Britain’s multi-nationals to move their tax affairs to every corner of the globe to minimise their payments.

The result is a depleted Exchequer and strain on the public finances at a time when it is borrowing £150 billion a year.

There could not be a starker contrast between the indulgence with which Britain’s top tax inspector, David Hartnett, treats the nation’s corporate high rollers and the imperious demands for payment being issued to modest earners who have never attempted to dodge taxes.

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