In the news, the British Government is out of pocket millions on its tax collection duties since February, surrounding VAT and corporation tax. The blame of late payment notices are being send to businesses, yet it was the HMRC’s fault in changing its bank details. “In February, the government department changed its International Bank Account Number (IBAN) without informing a number of UK businesses that use the method to pay their taxes.” (Simpson, 2016)
“Accountancy firm, Smith and Williamson, said one client had discarded the letter advising them to make payment to a new bank account as they assumed it was a scam due to its poor wording.” (Morley, 2016) This is outrageous, the taxpayer already funds the HMRC for its services to continue to tax them, I know the sentence is criminal. HMRC are planning to move their operations to more nicer offices and a more efficient digital tax system. “HMRC cut £210m from its costs in the last financial year, taking its savings to £991m over the past four years.” (Dakers & Hoppe, 2015) Well done HMRC we should all be thankful, now might I ask who is it that came up with this very large bill in the first place? “We have been clear for some time that this will mean fewer, but larger and more modern offices that will help us to deliver better services to our customers and bring in more tax revenue for public services.” (HMRC spokeswoman in Dakers & Hope, 2015)
Also, the digital software required for the new system would increase taxes and put pressure on small to medium sized businesses. Discouraging new industries and UK businesses in general. “It would have an impact on large businesses (who may not currently have accounting systems which are compatible with HMRC’s requirements) as much as on small businesses, who may not use computers,” (Tyrie in Fuller, 2016).
Whats the relation to the EU referendum, well, “[the consultation] on digital tax accounts is to be delayed until after the EU referendum on 23 June, HM Revenue & Customs has confirmed.” (Fuller, 2016) This is as if they are trying to prevent bank withdrawals and move more to a digital currency, which you could say is strangely correlated to the fact that the UK are considering zero interest rates or even negative interest rates. Because they can see fit to blame any action surrounding the EU on their own monetary policy mistakes. My article To Leave Or Not To Leave The EU? explains this more.
“British taxpayers could lose as much as £50billion due to EU judges overruling the UK’s tax laws.” (Dathan, 2016) With the HMRC having to pay back billions of pounds in the last decade, “[after the tax] rules deemed illegal by EU judges were drawn up by Treasury officials and implemented after being approved by MPs in the House of Commons. (Dathan, 2016) Such illegal taxes were found to be a stamp duty tax and a form of corporation tax on profits distributed by a subsidiary of a parent company.
Used as a campaign aid to the Vote Leave side of the EU referendum debate. “The figures, unveiled by the Vote Leave campaign, expose the extent to which multinational firms use the European Court of Justice to cut their tax bills and reclaim billions of pounds from the UK taxpayer.” (Dathan, 2016) These figures put forth by the Brexit campaigners add up to pay for the equivalent of ” […] 25 fully-staffed hospitals and two more Queen Elizabeth class aircraft carriers.” (Dathan, 2016)
“EU judges also blocked the UK government from reducing the time limit on businesses claiming for overpaid tax.” (Dathan, 2016) On-top of the £350 million that goes to Brussels weekly. Big-business and governments are taking the British taxpayer to court in Europe where “[…] unelected judges are overruling the decisions of our parliament on tax rules – costing us all billions.” (Dathan, 2016)
No matter what side you are on for the EU decision, why are we letting these politicians take our money to spend on leaflet advertising? “More than 200,000 voters have now signed a petition against the £9.3million taxpayer funded leaflet.” (Dathan, 2016) Yet people are arguing for an equal amount to fund both leaflets sides, does this mean taxpayer have to now pay £18.6million for both a Leave and Stay campaign. Its not even their money to spend!
Dathan, M. (2016). UK taxpayer face £50bn bill after eu judges overrule our tax laws – exposing how multinationals use eu courts to claw back taxes. Daily Mail. Retrieved [02/06/16] from <http://www.dailymail.co.uk/news/article-3532727/UK-taxpayers-face-50bn-bill-EU-judges-overrule-tax-laws-exposing-multinationals-use-EU-courts-claw-taxes.html>.
Morley, K. (2016). Businesses unable to pay millions in tax – as hmrc changed its bank details without telling them. The Telegraph. Retrieved [02/06/16] from <http://www.telegraph.co.uk/news/2016/05/30/businesses-unable-to-pay-millions-in-tax—as-hmrc-changed-its-b/>.
Dakers, M. & Hope, C. (2015). HMRC to merge 170 offices into 13 hubs as part of major overhaul. The Telegraph. Retrieved [02/06/16] from <http://www.telegraph.co.uk/finance/economics/11989681/HMRC-to-merge-170-offices-into-13-hubs-as-part-of-major-overhaul.html>.
Simpson, F. (2016). Tax headache for uk firms as hmrc changed its bank details without telling them. Accountancy Age. Retrieved [02/06/16] from <http://www.accountancyage.com/2016/06/01/tax-headache-for-uk-firms-as-hmrc-changed-its-bank-details-without-telling-them/>.
Fuller, C. (2016). Digital tax consultation to be delayed until after eu referendum. Accountancy Age. Retrieved [02/06/16] from <http://www.accountancyage.com/2016/05/12/digital-tax-consultation-to-be-delayed-until-after-ey-referendum/>.
Copyright © 2016 Zoë-Marie Beesley
Licensed under a Creative Commons Attribution 4.0 International License.