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LITRG Chairman Anthony Thomas recently spoke at a seminar hosted by the Bingham Centre for the Rule of Law on the subject of the rule of law in tax.

Background

The Bingham Centre for the Rule of Law is an organisation inspired by the late Lord Bingham, who is described on the Centre’s website as “the pre-eminent judge of his generation and a passionate advocate of the rule of law”.

Tax and the rule of law

The LITRG Chairman’s speech focused on three Bingham principles and considered how these principles played out in today’s tax system.

• The laws of the land should apply equally to all save to the extent that objective differences justify differentiation.
• Ministers and public officers at all levels must exercise the powers conferred upon them in good faith, fairly, for the purposes for which the powers were conferred, without exceeding the limit of such powers and not unreasonably.
• Questions of legal right and liability should ordinarily be resolved by the application of the law and not by the exercise of discretion of some official, in effect giving them quasi legislative powers.

Inequality

He said, “It is axiomatic that equality before the law is a cornerstone of our society. There should not be one rule for the rich and powerful and another for the poor. Nevertheless, there is a widespread belief that HMRC seem to have forgotten that fundamental principle. That all should be treated as equal before the law may now be accepted without much question, although it has taken time to get there. There is now an important related issue – inequality in administration gives rise to unequal treatment and hence unfairness.”

The speech also examined the current public perception that big business and the wealthy have access to the ‘corridors of power’ not available to the poor and smaller business. Big business should not be treated differently to smaller business. Nobody should get a better service because they pay more tax.

At the same time, much political and media comment was unhelpful and muddied the waters. HMRC needed to get back to taxing in accordance with the rule of law, rather than de facto government by press release, guidance note and toolkits, which merely complicates the system and is subject to no Parliamentary scrutiny.

Significant numbers of taxpayers are digitally excluded; many vulnerable taxpayers struggle to cope with a new way of working with HMRC; many are unable to deal satisfactorily with a complex tax system, getting more complicated with RTI and Universal Credit.

Conclusion

The speech closed reiterating that:

“There must be equal treatment of all taxpayers. Sadly, with ever more resources being siphoned off into specialist ‘hit squads’ there is a very real danger of the most vulnerable and poor in society being disadvantaged with the concomitant danger of the worst excesses of HMRC maladministration coming to the fore.”

To read the full speech, follow this link.