My first response on reading this following document was, “somebody at the Revenue doesn’t understand the basic principles of international taxation”. My second response was that they should have paid me to write them something. My third was that they were joking.
Unfortunately, they appear to be serious and you will see why I view this as the ultimate surrender of HMRC.
It seems like HMRC are suggesting that the recent stories regarding Facebook and Google are nonsense. It seems that they are suggesting that, actually, they are paying the correct amount of tax, not only within the letter of the law, but the spirit too.
What sort of tosh is that? It is time we put this nonsense to bed.
Of course it’s not in the spirit of the law. It is not even within the strict reading of the law, when read by a highly-qualified tax expert such as myself who, incidentally, has comprehensive knowledge of the law and jurisprudence.
Yes, a layperson reading the law and giving the language its common meaning whilst referring to all the specified definitions within the tax acts, interpretation acts and centuries of case law might think that would be the case.
They would be mistaken. And, of course, they are.
So, it is left to me to explain why the meaning of the law and its widely accepted meaning is wrong. Here is an extract from my first book State of Courage (RRP £34.99) which summarises the legal position perfectly:
Well, let me start by saying apartheid was legal once. That means that basically we should ignore the law altogether because it has nothing to do with what the law should be and, therefore, is.
Clearly, the Will of Parliament considers that the greater the amount of money it can claim, the more control it has over its citizens and therefore the more it can do.
Parliament sees tax as “good money” and the rest that it can’t claim as “evil money”. Loving good money is good. Loving evil money is neoliberalistic and evil.
However, much evil has been done by good men standing by and doing nothing. So, anything The State doesn’t collect in tax is a failure on its behalf, and an evil failure at that.
The State can only be good if it is Courageous and taxes everything. Only that way can all money be good.
But why stop with money? There are trillions of pounds worth of assets in the UK which aren’t money. Why should we only punish the neoliberals who favour cash?
Again, The State must be Courageous by taxing all these assets and using them for good. Only in this way can The State purge evil once and for all.
This is the True Will of Parliament, and it must obey The State of Courage when it demands that it performs the ultimate good.
So, you see that the Will of Parliament demands more than what is written in the letter of the law, and more than what it hoped to achieve when it enacted the legislation.
The law must be interpreted in such a way as to maximise the yield of tax, as close to 100% of all assets as possible, as permitted by any reading of the legislation given its common meaning in English or any English-based patois. Perhaps the most useful patois to read legislation in is that of Australia, being the second-most sarcastic nation in the world.
What really galls me is that HMRC seem to have forgotten these basic principles of tax expertise.
I think the truth is that they’ve given up. All the recent stories have hammered them publicly. They can’t collect the right amount of tax, they can’t calculate a simple tax gap correctly, they aren’t taxing multinational corporations (especially those who do so by not even having a UK subsidiary!), they aren’t taxing pop bands, they aren’t taxing comedians or gameshow hosts, they aren’t collecting taxes from bankruptcy cases and they can’t even calculate a simple tax gap correctly!
The truth is, given all the public pressure, HMRC are sticking their head in the sand and pretending that the staggering tax avoidance gap of over £180bn is not even actually tax avoidance!!!!
That is a travesty. And exactly why you should set up a direct debit for £50 a month to the Justice for Taxes Network.