Leader: A culture of evasion

In his podcast last week, HM Revenue & Customs’ effective policy chief Dave Hartnett said the organisation needed to instill a culture in which inspectors didn’t automatically assume taxpayers were trying to avoid their responsibilities.

Hartnett should not speak too soon. For the amnesty announced this week for taxpayers with unpaid liabilities in foreign bank accounts raises disturbing questions.

When the original Barclays special commissioners judgment came out, John Avery Jones noted that the number of people mentioned in the trawl was larger than the number who filled in the foreign income section of the tax return. That was one bank, with more customers with foreign bank accounts than there are people officially declaring any foreign income.

Coverage of the moves to enable the unpaid tax to be paid has, equally, often been sympathetic to the people evading tax. Newspapers run images of middle class families from the shires who may or may not have extra liabilities.

Such people should know better, but there seems little point in sanctimoniously pointing that out.

What the taxman needs to create is a culture in which such evasion, and contrived tax avoidance, is frowned upon.

In that context, it should start with its own policies. Where tax on foreign income is concerned, the system of domicile and residence that the UK operates is antediluvian.

Successive generations of politicians have bottled the chance to drop it, even though it helps to create a culture in which tax and civic responsibilities have become obscured.

Taxpayers, seeing wealthy non-doms avoid taxation, may feel they have a right to the same. It’s time the rule, for that reason and for many others, was ditched.

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