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Where Taxpayers and Advisers Meet
Editorial: HMRC "Customer Targets", or Targets "Customers"?
08/07/2012, by Mark McLaughlin CTA (Fellow) ATT TEP, Tax Articles - General
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TaxationWeb's Mark McLaughlin worries that HMRC's taskforces may be taking an unduly heavy-handed approach to taxpayers, for the wrong reasons.

altHM Revenue & Customs announced on 5 July 2012: "Over £30m will be recovered from tax dodgers as HM Revenue & Customs (HMRC) launches new taskforces around the country. These "specialist teams" will be targeting Scottish pubs and nightclubs, hair and beauty businesses in Northern Ireland, the motor trade in South Wales, the South West, Yorkshire, Nottinghamshire and the North East, and restaurants in South Wales and the South West.

The stated intention is that these taskforces will target those traders who do not pay "the right amount of tax". That seems fair enough. However, I have two particular concerns about these taskforces.

Firstly, the Taxpayer's Charter states: "Unless we have a good reason not to, we will presume you are telling us the truth". In other words, the taxpayer is innocent until proven guilty. However, is that going to be the mindset of these taskforces? Unless and until their investigations uncover evidence of evasion, the only 'crime' of these traders is that they are engaged in the 'wrong' type of business in the 'wrong' locations. One hopes that it is not going to be a case of 'guilty until proven innocent' for these traders caught in the crossfire between HMRC and tax evaders.

Secondly, how is the figure of £30m for unpaid taxes arrived at? HMRC also says that it is "on target" to collect more than £50m as a result of other taskforces launched in 2011/12.

I have made this point before, and I make no apologies for making it again. It is one thing for HMRC to call taxpayers "customers". However, HMRC's "target" from its customers is uncomfortably reminiscent of a sales target, and takes the whole "customer" analogy too far. Setting taskforces targets in terms of tax yield (or 'sales', if you wish to continue the customer analogy) is wholly inappropriate in my view.

I personally hope that HMRC collects every penny of evaded tax. But not a penny more. Who is to say what the actual figure for evaded tax in the targeted trades and geographical areas might be? it could be £30m, or £50m, or £10m - the true figure is what it is. In the absence of clear, unequivocal evidence, HMRC's setting of targets from its customers is unhealthy, and must stop.

Best wishes,

Mark McLaughlin

Managing Editor

About The Author

Mark McLaughlin is a Fellow of the Chartered Institute of Taxation, a Fellow of the Association of Taxation Technicians, and a member of the Society of Trust and Estate Practitioners. From January 1998 until December 2018, Mark was a consultant in his own tax practice, Mark McLaughlin Associates, which provided tax consultancy and support services to professional firms throughout the UK.

He is a member of the Chartered Institute of Taxation’s Capital Gains Tax & Investment Income and Succession Taxes Sub-Committees.

Mark is editor and a co-author of HMRC Investigations Handbook (Bloomsbury Professional).

Mark is Chief Contributor to McLaughlin’s Tax Case Review, a monthly journal published by Tax Insider.

Mark is the Editor of the Core Tax Annuals (Bloomsbury Professional), and is a co-author of the ‘Inheritance Tax’ Annuals (Bloomsbury Professional).

Mark is Editor and a co-author of ‘Tax Planning’ (Bloomsbury Professional).

He is a co-author of ‘Ray & McLaughlin’s Practical IHT Planning’ (Bloomsbury Professional)

Mark is a Consultant Editor with Bloomsbury Professional, and co-author of ‘Incorporating and Disincorporating a Business’.

Mark has also written numerous articles for professional publications, including ‘Taxation’, ‘Tax Adviser’, ‘Tolley’s Practical Tax Newsletter’ and ‘Tax Journal’.

Mark is a Director of Tax Insider, and Editor of Tax Insider, Property Tax Insider and Business Tax Insider, which are monthly publications aimed at providing tax tips and tax saving ideas for taxpayers and professional advisers. He is also Editor of Tax Insider Professional, a monthly publication for professional practitioners.

Mark is also a tax lecturer, and has featured in online tax lectures for Tolley Seminars Online.

Mark co-founded TaxationWeb (www.taxationweb.co.uk) in 2002.

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