Even individuals who do not necessarily have a keen interest in current affairs and politics cannot fail to have noticed that tax arguments are thrust into headlines these days. This can be shown to be for quite a few reasons. Sometimes it is HMRC or the Treasury, seeking publicity to show that they intend to ‘crack down’ on tax evasion and tax avoidance.
There are many occasions where HMRC themselves mess up, and they end up in the news for things which have gone wrong. For example, using incorrect PAYE coding notices and issuing these to employers was a major issue in the news two years ago. Controversially, despite this major error, which came to light a few years ago, HMRC, chose to reclaim the tax back from individuals who had innocently believed that they had been paying the right amount of tax. Millions of people were affected by this error on the part of HMRC.
The Budget in 2012 brought about some measures which annoyed the greater public. Most notably, there were the scandals of the ‘pasty tax’ and the restriction on tax relief for those making substantial donations to charities. Both measures were slammed as restrictive for the public. The ‘pasty tax’ in reality was simply redressing a VAT anomaly which had been allowed to exist for years. The anomaly was that if a customer bought a hot pasty in a restaurant, and sat down to eat it, then VAT would be charged as this was classed as catering. However, a supermarket offering hot pasties for sale, did not need to charge VAT. In theory, the closure of this anomaly should have been seen as a success, but the nation was in uproar. The media publicised how hard working British people were being punished by VAT being applied to the simple pasty. However, the truth is, VAT should have been applied all along!
However, not all publicity has been against the tax authorities. The ‘crack down’ on tax avoidance and evasion came to a head also, when the names of certain celebrities were ‘named and shamed’ for being within tax avoidance schemes. To name a few, Gary Barlow, Mark Owen and Howard Donald from pop band Take That were all part of the same scheme. And no one can forget the furore caused when comedian Jimmy Carr was exposed for sheltering millions of pounds within a tax scheme.