There is no evidence so far that the prospect of a random self-assessment audit from the Inland Revenue will have the impact that it can produce in the United States – where nervous breakdowns are not uncommon among those faced with the ordeal.
Yet we find ourselves in an aggressive taxation era, quite new to the UK. The Revenue is stepping up psychological warfare against taxpayers and the tax profession.
It is not yet time to put in a national order for tin hats. But the Chartered Institute of Taxation is prudently adopting some civil defence measures.
The institute has been preparing new guidelines for members on what they should do in the event of a Revenue raid on their premises.
We are treating that guidance as an urgent matter. We also hope to publish shortly a complete revision to our professional rules and practice guidelines.
We want members to feel protected in a new and more dangerous taxation age. We are not acting like frightened rabbits, simply as prudent professionals.
It came as a particular disappointment recently when the government saw fit to disregard most of the institute’s representations on the finance bill. The era of settling UK taxation matters in a climate of grace and space may have passed. What we are seeing is a hardening of Revenue attitudes.
The government is placing great reliance upon the Revenue being a main vehicle for delivering policies. The way that vehicle is being driven suggests it will pose dangers to those who standing in its way.
Pointers that difficult times lie ahead include: outsourcing many of the clerical tasks previously undertaken by the Revenue, the new ‘process now, check later’ philosophy, centralisation of resources, the spend-to-save initiative, an obsession with closing perceived and often non-existent loopholes, and the apparently greater use of the criminal law.
One of the most depressing features of the new, harsher climate is that we may expect to see a rapid increase in the number of criminal prosecutions for tax offences.
Keith Daniels is president of the Chartered Institute of Taxation.
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