A View From Middle England - Conservative with a slight libertarian touch - For Christian charity and traditional belief - Free Enterprise NOT Covert Corporatism

Wednesday, July 25, 2007

The Taxman came knocking and got shown the door!

The new conglomerate that is now Her Majesty's Revenue & Customs has just had a bloody nose from the House of Lords. Their lordships reckoned Caesar was getting too big for his boots.

Geoff Jones and his wife Diana have successfully fought a ruling by HMRC that they avoided tax by paying Diana through dividends from their firm. The couple were only following the advice that was posted on the DTI website giving small businesses helpful information. This was of course another example of the muddled "we'll point you in the right direction" thinking of government departments. Nobody taking responsibility, the right hand not knowing what the left is doing. Just passing the buck for the citizen to chase his tail!

The senior echelons of the Treasury, conveniently sidestepping the DTI's view of the world, decided to make an example of Mr & Mrs Jones. The Joneses faced a tax bill of about £50,000. So Goliath stepped up the pressure. However, with various organisations and accountants backing them up, they fought back and won.

Now there must be a hefty court bill left over. A couple of hundred thousand at least. Who pays that, I wonder? Why, us the taxpayers, of course. But we have to set an example as citizems. HMRC just got too big for their boots.

A tax partner of Grant Thornton said today that the Treasury only needed to get the Chancellor to change the rules via debate in Parliament. That's democracy. But they thought better and lost.

HMRC was apparently thinking they could "close a loophole", but no such loophole existed. The reason they got so excited was the thought of £1 billion extra coming into their coffers. If they need this extra money, let the Chancellor raise it properly through taxation. If they don't need it, what were they thinking of? Perhaps the Sheriff of Nottingham is their hero!


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