The heat is off - but not for long

The government is unpopular because the economy is in the doldrums, not for
its tax policy, as previously. The non-dom heat is off, the CGT row is over. A
boring budget has been successfully delivered.

This, though, is a dangerous time for the government’s tax policy chiefs.
With the finance bill due to be published today, there are still some important
technical issues to be ironed out. A few things stand out.

The details of the residence and domicile review will be pored over by
advisers and lawyers. Not necessarily to advise their clients whether to leave
or not, but amid the threat of far greater damage to the UK economy.

There is a suggestion that the UK’s wealth managers might be prevented from
managing non-dom money, on the basis that having a UK investment manager means
they have ‘remitted’ their offshore income. This would do immense damage to the
private client wealth management industry, a not inconsiderable part of City
work.

On top of that, the taxman is hoping to take vast new powers to enforce tax
rules.
While it is important to support HMRC in its attempts to stamp out frauds, the
taxman does need to know that this debate has gone too far in one direction.

When the revenue and Customs & Excise merged, spokespeople pooh-poohed
the idea that this would see the world of direct tax become more brutal and
hard-hitting.

That is exactly what has happened, and the promised taxpayers’ charter has
yet to materialise.

The taxman is taking a lot ­ it has to give a little too.