Don't outsource bank tax responsibility
Banks' tax compliance regime will hurt all businesses, warns Nick Mayhew
Regulation for professionals and intermediaries around tax evasion has strengthened in every year that I have been a practicing chartered accountant and adviser. It is a sad thing that the old way of emphasising the ethics of professionals is not enough to ensure honest play, but it’s not enough, especially in the banking world of global transactions.
Entrepreneurial business people will already recognise the regulation put in place by the last regime, which means many carry two or three forms of identification around with them routinely these days. My view has always been ‘stop whining and get on with it’; international and internet fraud is everywhere, and identification protection is crucial to free trade.
However, no honest business, already subject to various types of oversight, will welcome the extra hurdles needed to trade that might be implied by even more scrutiny of transactions by their banks, especially when this is for the purpose of finding tax evasion. This is another example of HMRC and HM Government outsourcing what is properly their job and making businesses pay through the over-regulation of the honest.
What is more welcome is the strong emphasis on getting the bankers’ own houses in order. One would hope that major high street brand name banks would hold their values as corporate citizens highly and pay their dues. I’m sure most of their employees would expect it. However, with my cynical hat on, I have to remember that I used to think the same of our MPs. I think George Osborne’s comment on the Andrew Marr show was far too weak. Tax evasion is not just unacceptable because of the straightened times, and the bankers’ culpability in creating them, it is immoral always, full stop.
In the long term, open compliance with the law is the key to confidence in trade. And passing off the responsibility for prevention to the business community rather than HMRC and the police – is this just the latest example of what the “Big Society” really means?
Nick Mayhew is head of consulting and board director at Price Bailey