A Taxing System
Never a day goes by when I read examples of how so many have been affected by the seemingly limitless powers of the tax authorities.
In no particular order; I read that the planned tax cut for 2.7m self employed has been scrapped; it was due last year but delayed a year until this news. Cynics will point out that the cost is "only £150 a year". Fortunately Treasury Minister Robert Jenrick says that the government remains committed to simplifying the tax system for the self employed and will keep this issue under review. Well, that's good news then.
The government recently announced a funding increase for the NHS - well received in most quarters but then it follows that, logically we must ask the question, "how?" Maybe increase taxation or reverse a planned tax cut...
Many financial adviser firms hold seminars and preach about how unfair inheritance tax is; at last something I agree with them on! It is true; the reward for our hard work, risk taking, sacrifice, tax paying lifetime, is a penal 40% death tax on assets we own at date of death over £325,000 in value.
A large financial firm regularly invites me to its seminars in fancy hotels with refreshments where I can listen to experts extolling their prowess in reducing this final tax bill. I will refrain from commenting on this but would point out a recent announcement from the tax authorities reminding them of the April 6 deadline for advisory firms to disclose details of their strategies for dealing with inheritance tax to ensure they do not breach the rules. Good of them, isn't it?
Next April is D Day for many unfortunates who entered into certain aggressive tax schemes on the advice of "experts" years earlier. Changes in law - applied retrospectively - has resulted in the planning being "unlawful" and the penalties expected to be crippling.
The Times reported recently that HMRC is moving firmly into the business of shaming individuals as well as companies for avoiding or mitigating tax. There is a list we can all peruse at our leisure! Helpfully, the tax office is providing the Cabinet Office with a "traffic light" list of people who offend them so that those who score badly can be dumped from the honours list. How long before past recipients receive a nice brown envelope revoking honours?
Lastly, for now, comes news that in the field of stamp duty land tax, the tax office has been accused by experts of exploiting tax payer ignorance and trying to alter previously understood definitions to suit their own purposes. It's almost hard to believe.
I would never advocate trying to avoid paying tax but I despair at the growing reality that even if we try, by using clearly defined and approved strategies, we cannot guarantee that at some point in the future, laws will be changed and we will be attacked. Very sad.