When Gordon Brown confirmed the long-circulated rumours about the merger of the Inland Revenue with the Contributions Agency, there were few complaints. Unlike the changes to CGT, this proposal looked a genuinely beneficial simplification of taxation.
But Brown isn’t a man to give anything for nothing: there will be a trade-off.
The burden of compliance will be eased, but the threat of rigorous and invasive investigations will increase. If one tax-investigations accountant is to be believed, the government will create a fearsome omnipotent monster.
Well might he quake. CA inspectors have powers that their Revenue counterparts only dream about. They can enter any premises without a warrant, and interview anyone without a lawyer being present. When the organisations join forces it seems inevitable the Revenue will want these powers.
Further, new government proposals announced in the Lords will make directors personally liable for unpaid NIC – an erosion of limited liability that has caused considerable consternation. Will the Revenue have the same power after the merger? The prospect is frightening.
But those complaining about the tie-up are on dangerous ground. While no-one wants a Big Brother-style agency, leading lights in the profession have long backed such an alliance, saying it would increase efficiency.
Tightening up on avoidance was always going to be part of the equation.
That’s the deal, and it’s not a bad one.
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