HMRC (Britain's tax collecting agency) has been headline news recently, following its admission that it has prosecuted only one individual out of thousands reported to have undeclared Swiss bank accounts. Tory MP Richard Bacon told the Today programme last week that HMRC’s troubles come from the merger with Customs and Excise in 2005 and from excessively complex tax law. He blamed Labour governments. What he didn’t say was that the merger had cross-party support. Nor did he say that a complex tax code historically was intended to ensure fairness but that the recent huge expansion of tax legislation has been driven by government ministers’ obsession with tax reliefs for risky “entrepreneurial’ enterprises and the necessity for concomitant anti-avoidance rules that have become a playground for the tax-planners who promote these reliefs.
As I see it, HMRC has been emasculated by managerialism, a new style of punitive management, and the kid-glove treatment of big business. Politicians have very little understanding of the business world. Labour leaders are showing some recognition that business has to contribute to the greater good as evidence has grown that the trickle down of wealth didn’t happen, but this is politically dangerous for them.
Then of course there are the cuts: their worst impact has been on the services provided to ordinary taxpayers who face endless delays on undermanned helplines especially since the closure of the last tax enquiry offices in 2014. Talent has been lost from the specialist areas as pay levels have been frozen. Big money ‘customers’ however have their own service relationship managers and so have no problem contacting HMRC.
