The spy who taxed me

Earlier this month it was the news that tax inspectors could soon be
listening in to your business discussions via a bugging device officially
sanctioned under new legislation.

This week we learn that HMRC has parted with £100,000 of taxpayers’ money to
line the pockets of an informant who has, in turn, handed over intelligence on
British citizens using the tax haven of Leichtenstein. The tiny principality hit
the headlines last week when it emerged the same informant had supplied
information to the German intelligence services on the financial affairs of
hundreds of wealthy Germans.

HMRC hopes that its modest investment would enable it to recoup at least
£100m in tax revenues, which would be an impressive achievement. But what are we
to make of its latest venture?

Clearly HMRC has entered a cloak and dagger world of eavesdropping and
informants that would make George Smiley proud. It displays a hard-line attitude
towards tax avoidance that we had not anticipated and a level of intervention
that we could not have imagined. It is perhaps instructive that when the German
news broke, it would not have occurred to many that HMRC was involved.

Will our own intelligence agencies in future partner the taxman in big
investigations? HMRC must speculate over the investigation skills our own secret
services might have the taxman could only dream of. But the direction of travel
smacks of a shift to a more authoritarian and interventionist approach to tax
that creates more than a little discomfort.

A taxman invigorated in this way could begin to blur the lines between what
is acceptable and infringing on our civil rights. That’s a disturbing move and
deserves serious debate before we begin talking of a merger of HMRC and MI5.

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