Tax
A Letter From The UK Tax Collector
The UK tax authority has sent letters 5,000 of the richest people in the UK, “welcoming” them to its newly-formed High Net Worth Unit, according to a report by the Daily Telegraph.
As GoldFinger could not help note from the article, which was written with a nice touch of irony, there is something absurd about a tax collecting body sending out a friendly note to any group of taxpayers, wealthy or otherwise. Tax is, after all, collected by force of law. Non-payment is not an option. It is not as if HM Revenue & Customs were seeking charitable donations.
The article says that the letters spell out details of an "enhanced relationship" between HMRC and its "customers" by developing "trust and understanding". Quite.
The letters say the unit will seek to achieve the following: "Build relationships and develop our commercial awareness to help us better understand our customers and make it easier for you to get things right; provide a better service for you through proactive engagement and by providing a single point of contact for all your tax affairs; and encourage open communication to achieve swift resolutions to any contact you have with us."
What this means, once the holiday-brochure language is stripped away, is that tax inspectors will investigate more thoroughly into a person’s financial affairs, using more sources of information, both foreign and domestic, to determine the overall wealth of an individual.
There is something almost comic about such a letter being sent out to people as the UK gears up for a new, top-rate income tax band of 50 per cent to be paid by those earning £150,000 a year or more. Once changes to pension tax reliefs and other allowances are taken into account, the UK’s top earners face a marginal tax rate of more than 60 per cent, taking this country back to the bad old days of the 1970s when thousands of wealthy individuals chose to flee the UK. The politically non-aligned think tank, the Institute For Fiscal Studies, has warned that the tax increase will reduce, not increase, tax revenues.
As tax lawyers and financial advisors have already told WealthBriefing, the arrival of a new top income tax rate, coupled with other changes such as the levy on non-domiciles, is creating a boon for tax advice as people seek ways to avoid paying such heavy taxes. Quite why HM Revenue & Customs thinks it will make higher taxes easier to bear by affecting a chummy image is a mystery.