Closing the tax gap
If I asked you to close the door what would you do? Most reasonable people would shut the door… well you might tell me to get up off my arse and close it myself – but stick with me on this one: for most people closing the door would result in a door that was completely shut. But this is not the case at HMRC as the above clip shows. Here HMRC boss Dave Hartnett gives his rather unusual definition of what ‘close’ means.
And why is this important? Well whenever you get into conflict with HMRC you will always come into this question: what would a reasonable person do? But what HMRC defines as reasonable is very different from what the rest of the world thinks of as reasonable. If they can’t use simple words like ‘close’ in a way that’s understood by most people, what hope have this team got of creating a more simple and effective tax system?
None, what so ever.
Here is the House of Commons dialogue:
Mr Tyrie: You say in your mission statement that you will close the tax gap. You are not actually going to close the tax gap, are you? You are going to reduce the tax gap; isn’t that right?
Dave Hartnett: We had much debate on this, Mr Tyrie, as to whether “close” means close so the door is aligned with the frame, or whether it is the process of closing, and it is the second of those that we are doing.
Mr Tyrie: That is another classic Sir Humphrey reply, if I may say so.
Dave Hartnett: That was the debate we had.
Mr Tyrie: Out of the top drawer, if I may say so, above the doorway. Impressive…
I’ve been trying to interview HMRC boss Dave Hartnett for well over a year now, “he’s very busy,” his press officer tells me. So no joy there!
The question I’d really like to ask him is this: why do you waste resources on hammering sole traders and small businesses – often going to the expense of bankrupting them when they can never pay up? And why – as part of the same question – are you so soft on big businesses? Why do you allow some banks and companies like Vodafone to get away with hardly paying any tax at all?
Well it seems as though I’m not the only one who wants answers to questions like these, last month Dave was called before a House of Commons Treasury Sub Committee and the line of questioning took this form. Dave refused to answer some of the more sensitive questions, saying that he’d been given legal advice not to talk about it (ho-ho) but it’s still a very revealing 17 minutes of questioning.
You can see the film by clicking on the above image (it will open the Select Comitee video page).
Video shows Dave Hartnett CB, Permanent Secretary, Tax, Mike Eland CB, Director General, Enforcement and Compliance, and Melanie Dawes, Director General, Business Tax, HMRC at House of Commons Treasury Sub Committee Monday 12 September 2011. A full transcript can be seen here.
