Tax advisers are to blame for complexity – not the inspectors[QQ] I have an unusual employment history in that I have worked for the Inland Revenue (as an accountant/policy officer rather than an Inspector) and now work as financial controller in a mid-range plc.
I can appreciate both sides of the tax simplification argument.
With that viewpoint in mind, why do more people not recognise that the majority of the complexity of the tax system is due to the activities of the tax planners rather than the Revenue?
The Revenue is continually berated for the complexity of the system it administers but there is no possible alternative method for protecting public funds than to write new legislation to counter the ever-more creative activities of the tax planners. The drafting style employed for centuries by parliamentary counsel is to blame for the illegibility of the words rather than the Revenue’s policy staff.
In one sense a GAAR is the ultimate simplification. It is a one line approach to dealing with any and all instances not covered by extant legislation.
On the other hand, it potentially creates complete chaos as it represents a final sweep to unravel any tax planning activity whatsoever.
No one – Revenue, practitioners, company accountants, taxpayers – will be able to operate their affairs with 100% certainty under a GAAR regime unless prior Revenue approval is sought in all cases of doubt which is, of course, impracticable.
In summary, I think those of us in the profession should look to be more reasonable in what we attempt to do if we expect the Revenue to treat us reasonably. Surely that is a better approach than making a name for yourself by developing some new but short-lived wheeze which so occupies the Revenue that they are unable to make the simplifications we all crave without the need for such Draconian impositions as the GAAR.
Steve Bellerby, financial controller, via e-mail
On the side of human rights
In your article (Hash for Questions, October 26, page 7) you wonder how much revenue could be generated from taxing cannabis. Of course such a figure would be hard to calculate since the number of users in the UK is unknown.Your discovery that one in three UK finance directors have tried cannabis must surely increase the governments estimate from 1.5 million users.
If cannabis were to be legalised many more people in sensitive positions, such as teachers, carers, hospital workers and the police etc, may then admit to using cannabis too, maybe giving the false impression that cannabis use had increased dramatically.
But even more than the amount that could be raised through product taxation without risking a residual illegal market, is the amount of revenue that could be saved.
The government spends close to #5bn a year fighting drugs. The result is that about 80% of those prosecuted are for cannabis possession only.
The police may say they concentrate on hard drug suppliers, but the figures speak for themselves. Add to that the saving in police time, legal aid, prison costs and the figure comes to billions.
There is no doubt the prohibition of cannabis is a crime against Human Rights and a social and ecological disaster.
Alun Buffry, Legalise Cannabis Alliance
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