Tax means never having to say you are sorry

It is a testament to the sad accountant that I am that the Wayne Rooney story which caught my eye this weekend related not to his attempts to rebuild his marriage after his recently reported indiscretions, but to the fact that he and a number of Premiership footballers and clubs are being chased for as much as £200million in tax over payments in respect of “image rights”.

This was probably due to the fact that HMRC is once again in the news for the wrong reasons, which were not helped by HMRC’s Permanent Secretary, Dave Hartnett’s less than fulsome apology for the coding errors that have led to millions of people dreading a pre Christmas envelop telling them of the extra tax that they will have to pay.

I will leave it to others to blog on the continuing failure of public officials to understand when they are in the wrong and apologise accordingly. What the PAYE fiasco once again shows is that the current tax system is still struggling to cope with demands placed upon it by the growing development of Enterprise Britain.

The one job, one employer, one life scenario that PAYE was designed to cope with has been in steady decline for much of this millennium, and it will no doubt be dealt a further blow with the demise of hundreds of thousands of public sector jobs. Second jobs, pension payments whilst continuing to work longer, one off consultancy assignments and portfolio careers are becoming increasing common, and in due course will become the norm.

This will require an HMRC that is dedicated to helping people get it right rather than one that works on the presumption that they have got it wrong. Sadly, in spite of the claims that their new computer systems will ultimately deliver this, the current signs are not promising.

Targeting the small percentage of taxpayers who can afford to have imaginative tax reduction schemes devised for them for investigation is something that the 80:20 rule would suggest was a sensible mix of resource and yield. This is grown up territory, and those who play in it are more than able to look after themselves.

For the rest of us who do our best to comply, and trust in the authorities to at least make a stab at getting it right, it is going to take a significant improvement in performance by HMRC if Dave Hartnett and his successors are not to be constantly practising their use of the ‘S’ word.

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