The first rule of tax club

… is you do not talk about tax club.

This, from Big Brother Watch is just breath-taking:

Fined for talking about tax

This morning the Daily Mail has covered a very worrying story about changes to the law which effectively make it a criminal act to dispense tax advice. The woman behind the story – Anne Redston, a Visiting Professor in tax law at King’s College London – has written the following blogpost exclusively for Big Brother Watch.

Have you ever suggested an ISA might be a good investment, helped an elderly relative reclaim overpaid tax, or been encouraged to use gift aid? This sort of advice could soon cost you £1,500 or more. 

HM Revenue and Customs have drafted new laws penalising ‘deliberate wrongdoing’ – but this isn’t about hiding money in foreign bank accounts. 

Instead, ‘deliberate wrongdoing’ is defined as an act capable of causing a ‘loss of tax.’ This in turn is defined as ‘relief, reduction, repayment or credit of any kind.’ These definitions mean that any advice on saving tax could be subject to a penalty.

How much?

The maximum penalty is 100% of the tax ‘lost’, but with minimum £5,000 (reduced to £1,500 if you confess your wrongdoing to HMRC before they discover about it). There is also a ceiling of £50,000 – but this is per person, per tax, per year, so it could be much higher.

Who’s affected?

The draft law also makes it clear that these new rules apply to everyone, although lawyers and journalists have special protection. Of course, this legislation will be particularly tough on those whose day job involves giving tax advice, such as accountants and financial advisers.

And for them there is extra punishment – HMRC can take away all their client files – not just those files relating to the ‘wrongdoing’ – but all files, from all clients, including former clients. 

Is this necessary?

Very definitely not! The taxman already has a huge armoury of legal powers to investigate genuine tax offences. 
Although HMRC may say it will only use the powers ‘reasonably’ or ‘proportionately’, once a government body has such draconian powers, the temptation to use them is overwhelming.  The taxman already deploys the anti-terrorism powers in the Regulation of Investigatory Powers Act (RIPA) over 5,000 times a year. And councils are using the same powers to check your rubbish bins.

What next?

You can find the draft rules by going on to the HMRC site (www.hmrc.gov.uk)  and searching under ‘draft legislation and deliberate wrongdoing’ and then reading from page 11.  It is too late to respond formally but you could still try sending your comments to HMRC at: powers.review-of-hmrc@hmrc.gsi.gov.uk

And of course, you could ask your (prospective) MP to oppose these new extreme powers. I hope you will.

Go to it people. Oh and pay more tax.

Personally, as soon as my liabilities are cleared, I’m going to go onto a 3 day week. I’m sick to death of paying into this system, only to be treated with not only suspicion but legal coercement, for simply making sure I don’t pay any more tax than I am supposed to.

AJ

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About Al Jahom
Anti-social malcontent, misanthrope and miserable git.

10 Responses to The first rule of tax club

  1. manwiddicombe says:

    Worth keeping an eye on .. .. I encountered this earlier this year and it is being positioned along the lines of ‘people who knowingly sell red diesel to non-agricultural users’.

    • Peter MacFarlane says:

      It’s perfectly legal to sell red diesel to pleasure-boat owners.

      You will find pumps doing just that in every marina.

  2. I am researching a piece that will prove absolutely that ALL tax laws are illegal. My evidence is sound.

    Should I get ready for the Men in Black? I am fucked. Or at least, I will be when I publish the piece.

    CR.

    • john miller says:

      Speaking as an accountant, I will personally unfuck you.

      It’s not very pleasant though. For either of us.

  3. JuliaM says:

    I just can’t believe this! How could they expect to get away with it?

  4. Jonathan says:

    Most of those who work for HMRC are Labour supporting socialists/marxists who believe that every penny you earn belongs to the state and its employees.
    We need a cull of these parasites after the election. I won’t be holding my breath though.

  5. Looloo says:

    Shocked, disgusted and confused. I thought tax avoidance was a permitted activity and tax evasion was not. Is this correct? If so, is the legislation redundant? Also, what happens if a tax rebate is given by HMRC, are they subject to their own legislation given that ‘repayment and credit of any kind’ are within the definition?

    Apologies for the obvious questions; I’m at a loss to comprehend the logic behind this (apart from the goverment being broke!)

  6. Pingback: Law Review: Judge rejects ‘irrational’ idea that Christianity deserves special protection from law and other matters « Charon QC

  7. FCAblog says:

    Nods, actually quite an old story. I ran it back in February when the consultation originally came out. Accountancy Age ran it too.

    As Professor Redston would be well aware, HMRC were sent packing by the CIOT, ACCA and ICAEW and had to extend their consultation on the draft legislation beyond the original March deadline. This then had the handy side-effect that it couldn’t be rammed through Parliament before the election.

    God knows what they’ll come up with in reply, but it can only be better than their first, execrable attempt.

    • Al Jahom says:

      Is there any reason it wouldn’t be put down humanely by an incoming Conser… oh hell.. what am I saying?

      They’ll need every bean just as much as Gordo and Al do.

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