True cost of GLOs has Taxman running scared

gavin hinks, accountancy age

Requests for information under the Freedom of Information Act often result in
disappointment, but rarely have they been so surprising as HM Revenue &
Custom’s recent refusal to elaborate on the estimated cost of the group
litigation order tax cases still rumbling there way through the European Court
of Justice.

The six cases, involving hundreds of big-name brands, were once estimated to
cost £20bn if the UK Treasury lost them all. But HMRC’s reasons for not
disclosing the estimate were revealing in themselves.

Firstly, the taxman believed that the figure would give ammunition for a
press campaign against the UK’s involvement in Europe, if the full value was
known. The true potential cost could also call into question the government’s
adherence to its own fiscal rules, prompt speculation that taxes would have to
rise, borrowing increase and undermine the government’s management of the
economy. Well, in a democracy losing the confidence of the electorate is simply
a risk of office. And if there was a risk that taxes might have to rise, we
should know about it.

Ammunition for the press? Surely that only indicates that the figure must be
pretty large, which makes HMRC’s claim it can’t find the estimate among 17,000
documents sound fairly disingenuous. And we do still operate freedom of speech,
don’t we?

Oddly, all the reasons seem to show that the estimate is so significant that
officials are too concerned to make it public, even if the general threat from
the GLOs appears to be receding. If you’re worried about political meltdown, a
negative press campaign and the undermining of economic policy, you’ve got to be
very worried indeed.

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