George Osborne has announced that he's U-turned on the cap on charitable donations attracting tax relief for the rich. The cost will be £50 million of tax relief for the rich a year, with not a penny's worth of gain to charity.
In the meantime, and on the same day HMRC have announced:
Six new taskforces launched this week by HM Revenue & Customs (HMRC) are expected to recover more than £23m from tax dodgers.
The taskforces will target traders who do not pay the right amount of tax in:
- Indoor and outdoor markets in London
- Taxi firms in Yorkshire and East Midlands
- Property rentals in East Anglia, London, Yorkshire and the North East
- Restaurants in the Midlands
Taskforces are specialist teams that undertake intensive bursts of activity in specific high risk trade sectors and locations in the UK. The teams will visit traders to examine their records and carry out other investigations.
Now, I have no objection to HMRC tackling tax evasion: indeed, I argue they should. Bt what is extraordinary is that they can conceded so much on tax avoidance on the pasty tax and charities this week and at the same time make such a fuss with a stack of press releases on the paltry sums they expect these new initiatives they are launching to raise.
There is £70 billion of tax evasion in the UK.
OK, I conceded, they say it is only about £26 billion.
But even if they were right (and they're not) they're targeting 0.09% of evasion with this initiative whilst at the same time conceding the piont that I have made endlessly, that if only resources are targetted there are tax yields to recover.
Just suppose they engaged serious numbers of people to do this work. What would the yield then be? Almost as much as Osborne would give away in tax reliefs to his friends? Or maybe more? It's hard to tell, given his enthusiasm for back-tracking on his desire to tackle tax avoidance.
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The rationale for such a policy being that taxi drivers, market traders, etc aren’t actual or potential Tory party donors, Richard – though they may of course vote Tory – whereas very rich people may well be. In addition, task forces ‘swooping’ down on tax dodgers makes for a very visible spectacle. Just the stuff readers of the Sun or Mail want to see (along with benefit scroungers, illegal immigrants, and the rest of the undeserving poor). No doubt HMRC are already in talks with one of the TV production companies that make any one of the numerous ‘police, camera, action’ type shows to start a new sub-genre: Tax inspector, camera, action’. Marvelous!!
You cynic!
Probably true though…
Anecdotally and when folk meet and chat at social gatherings you hear an awful lot of people talk about how traders, owner-builders, taxi drivers, self-employed, landlord/developers, people running B&Bs, small business types are under recording their earnings – certainly in the South East area where I live and work its such folk and their wives too who drive the big black 4*4s-its common around the M25 compared to elsewhere in the UK; its not nurses, social workers and other PAYE employees who pay income tax on all they earn who own these big black Audis, Mercedes, or BMWs – its those who develop property, provide business services and handle their tax in business ways. So I do not think its unreasonable that all sections of society have to realise tax is an obligation we pay for a civilised society.
But in that case the answer is 20,000 new staff – not a few pilot studies
“it’s the rich what get the handouts,
it’s the poor what get the blame,
it’s the same the whole world over,
is it not a crying shame?”
sums it up nicely. HMRC come the heavy handed bullies on these people because they reckon they haven’t the resources to stand up to them.
Is there something special about taxi drivers in Yorkshire and the East Mids? I thought they were pretty much the same throughout the UK.
Precisely