An HMRC ‘Wise Guy’ Calls


by Dick Puddlecote
http://feedproxy.google.com/~r/DickPuddlecote/~3/rD165bBa6uM/an-hmrc-wise-guy-calls.html

An HMRC ‘Wise Guy’ Calls The oddest thing happened this morning.

Sitting at my desk, some woman just wandered in through our warehouse and asked to talk to a director. I replied that I’m one so how can I help. She tersely declared that she works for HMRC and demanded a payment of £15,000 for overdue corporation tax.

I was taken aback for a moment as she looked about 60 and was dressed in jeans and a sweat shirt – it’s not the kind of thing one would expect her to come out with.

As it happened, the people who deal with our accounts were both at a funeral at the time, so I said I’d have to talk to them first. She, however, insisted that as I was a director I would be able to sign a cheque right there and then. Of course I could, but there was no way I would even consider doing that, especially for someone who just breezes in arrogantly from the street.

She fixed me with a surprised glare (perhaps for not shitting myself when faced with a rep of the government, I dunno), before handing me her card and telling me all the nasty things that might happen if it’s not paid in the next week. Now, I’ve often said that tax is effectively extortion with menaces, but I’ve never seen it illustrated in such a blatant manner.

On later talking to our credit controller, she said that we’d paid a huge amount up front and were just waiting for some communication of the balance due before settling it – that’s what one would expect from a government agency, after all. However, we’d not received a single letter or phone call to tell us what we were supposed to pay. Wouldn’t it have been much more professional – and less costly in time and, therefore, money – to ring or write rather than sending some late middle-ager round to ask for a cheque out of the blue?

And when did employing similar intimidatory methods to 1930s mafia protection racketeers become an acceptable state policy?
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32 responses to “An HMRC ‘Wise Guy’ Calls

  1. Of course taxation has always been a form of extortion – that is why it is called “to tax” (i.e. “to burden” – that is why the Inland Revenue adverts “tax does not have to be taxing” used to set my teeth on edge, of course it is “taxing”, by freaking definition…..).

    However, this informal style of extortion……

    The (highly paid) person just wandering in (dressed down as if working in the garden) and making casual threats without even a pretense of the rule of law……

    This is actually fairly – this style of government dates from 1997.

    Mr Major still clung to some of the rituals of government as had Mrs Thatcher (what Burke called the “veils of decency” on naked force). Mr Blair and co was having none of that.

    Top government employees were to be highly paid (as if they were the managers of private companies) and were to operate in an informal (casual force) style.

    You have just been on the recieveing end of the new style of goverrnment (it is vile). And, sadly, Mr Cameron loves this end-to-ritual-and-custom as much as Mr Blair did.

    It has been a long time comming……

    Chief Justice H. (the author of “The New Despotism” 1929) said that the British Civil Service was the most decent and honourable in the world (which they may have been in his day) – but that if people were given unlimited power, free from the restrictions of the old Common Law, they would not stay that way (honourable and decent) over the generations.

    The generations have passed (this is the “long term”) and what he feared has come to pass.

    Things will, of course, get worse.

    You might try Guernsey (if your business can move) – I am told they have less contempt for ritual and custom (for the limits on naked violence) there.

  2. Dick: the trouble with this is you only have one side of the story. As a retired Inland Revenue officer who did a good deal of investigation work, I can assure you that stories told by taxpayers, corporate or otherwise, about both their tax affairs and their encounters with the Revenue are often somewhat removed from the truth. You might find in this case that HMRC had contacted the company and received no reply prior to this call. The “we never heard from the Revenue” is a very common excuse for non-payment, up there with the false “the cheque is in the post”.

    • Well, Robert, my wife and I were a fortnight late with our self-assessment earlier this year. An extremely arrogant Scotchman called my wife, and threatened her with bailiffs who would come into the house and take furniture and other possessions. When I took over the call, he started to bluster. He refused to give his name or the name of his line manager. I did think of complaining, but suspected it would be a waste of time.

      Oh, and, while our accountant told us how much we should pay, we had no written demand from the Government.

      I believe Dick. These people are on some kind of commission, and are behaving like tax farmers in the early modern period.

  3. Quite frankly, I’m far more inclined to trust a random stranger who just walked out of a penitentiary in clothing 20 years out of date than any government official.

    Government officials are always rabbiting on about “the other side of the story” while never actually producing that other side. Handy that, leaves the reader unable to draw any conclusions about credibility or to perform any fact checking.

  4. I am forced to agree with Sean Gabb.

    The choice to go for an “informal” style of government was just that – a choice.

    It was policy change made by Mr Blair (and co) back in 1997 – along with higher pay for senior government people (in an effort to “motivate” them).

    I suspect that Mr Henderson was a Civil Servant when I was (or even before) it was a different Civil Service in those days (although it was already changing…..).

    It did not pretend it was “part of the private sector”. And so on.

    Hard though it is for me to say it (after all the Germans turned some of my family into soap) – someone would be better off (in terms of avoiding a lawless state) in Germany these days.

    The German way is different to the British way – no Common Law tradition and so on.

    But then the British way is dead – at least in the United Kingdom.

    The German way (Administrative Courts, well known formal rules of procedure – that individual and corporate taxpayers know in advance, and so on) is very much alive.

    I can not speak or read German (unlike Sean Gabb), but I am told that even the paperwork is less complicated in Germany.

    Straight forward rules with clear objectives – not perfect (after all Germany is also in the E.U.), but better than here.

    Not thousands of almost unreadable pages …… mixed with “informal government” (i.e. random, lawless, threats).

    If you have a choice between operating a business in England and in Bavaria – choose Bavaria. If you can not get into Guernsey and so on.

    By the way – the United Kingdom government borrowing figures are just in.

    Yet again they are “unexpectedly” high (government spending is going up – not down).

    So expect more random (and I mean random) tax demands.

    The next move may be “tax farming”.

    It could be presented as a form of “privatization” or “contracting out”.

    Tax Farming would, of course, be terrible.

  5. Robert:
    I don’t know how long you have been retired but you maybe assured that Bottler Brown’s merger and “reform” of HMRC has left it in such a state that non-communication between (what were) the Inspectors and the Collectors is nearly non-existant. It is quite common for people to come calling for debts that have been paid or are no longer due.

  6. Sean -there is definitely not any form of direct inducement although there might be general targets for bonuses.

    I am of course somewhat out of date and I do realise that Thatcher and her successors , up to and including the present dire coalition, have destroyed the public service ethos. Nonetheless, human nature has not changed and the propensity of people to lie when faced with someone armed with the authority of the state is immense. You wouldn’t believe the absurd lies I encountered on a daily basis and although Dick’s post may be an accurate report of what happened, you need to know the full details including HMRC’s side to make a reasonable judgement.

    To take just one ambiguous point from the Dick post: the writer complains of the officer’s scruffness. Well, it depends where the call was made. Normally smart business attire is what is required, but not always. I spent several years working with a special unit investigating the London rag trade, most of which was in East London. There was absolutely no point in dressing in smart attire because (1) the premises we had to enter were generally filthy and (2) we did not want to advertise who we were before raiding a factory. The same applies to raids of building sites.

    As for HMRC not issuing tax demands, if this is not happening I suspect it is probably down to that favourite reason for public chaos, computer systems. However, unless accounts and tax returns are made on time (or often not at all) HMRC is left with either issuing estimated amounts (always unpopular with taxpayers and timewasting for HMRC) or chasing up late submissions. Having said all that, there is no excuse for gratuitous rudeness.

    • Robert – Of course, I don’t know all the facts behind Dick’s story. But I can speak with full authority about my own dealings with the tax authorities. Regardless of the general legitimacy of their demands, I have not been impressed by their conduct.

  7. Sean – I am not questioning your story, merely raising a few words of caution about the veracity of Dick’s. There really is no excuse for the gratuitous rudeness towards you that you described. It is also almost always counter productive from HMRC’s point of view because it either makes the taxpayer uncooperative or, if they become frightened, frequently to tell lies they would not otherwise tell, something which takes additional HMRC time to unravel.

  8. Paul Marks – “Of course taxation has always been a form of extortion…”
    Well, there can be debate about how much tax should be raised and how it is spent but there cannot be any debate about the need for taxation in any society beyond the tribal. I am, incidentally, a most severe critic of government waste.

    You may find this piece from my blog of interest:

    http://livinginamadhouse.wordpress.com/2010/10/05/the-principles-of-taxation-a-guide-for-politicians/

    • I have now looked at the blog entry that Mr Henderson wanted me to see – it was not as bad as davidncl hinted it would be.

      I do not agree with the post of Mr Henderson (and the content tends to get worse as the post goes on – I gave up when Mrs T. started to get attacked) – but I would not say it was Nazi or anything like that (because it was not).

      The old Poor Law was limited – and the Poor Law that replaced it (after 1834) was even more limited. The scale and structure of the thing was utterly different to that of the modern Welfare State – so my arguments against the moder W.S. do not really apply to it.

      It would be as if I why to warn someone someone about having a tiger in their house – and then tried to use the same arguments with the family next door, who had a tabby cat in the house (rather than a tiger).

      However, I still hold that the claim Mr Henderson makes – that the Poor Law prevents mass death, is mistaken.

      For example, it is often forgotten that the Poor Law was introduced in Ireland some years before (yes before) the crises of the 1840s.

      Passing laws and collecting local property taxes did not prevent the horror (the horror that led to one in three of the population of Ireland either dying or leaving the country – of course the “leaving the country” bit is left out of extreme accounts of the crises of the 1840s) – indeed the taxes made things worse.

      Both by forcing landlords to make desperate efforts to collect rents (it was the landlord, not the tenant, who was responsible for paying the Poor Law tax) and by underming local private sources of alternative employment for victims of the potato blight.

      Even Scotland (a much poorer country than England – thin soil, short growing season) did not have terrible famine in the period before the introduction of the Poor Law in 1845.

      It is often forgotten that most of Scotland (even the largest city – Glasgow) did not have compulsory Poor Law taxes before the Act of 1845.

  9. but there cannot be any debate about the need for taxation in any society beyond the tribal.

    Really? We know how taxation began; it is tribute. Tribal societies do one-shot plunder, in that you raid your neighbours, steal their goods and pretty girls, and kill as many men as possible. This later developed into continual plunder; the conquered are kept in a state of permanent suppression by the theat of violence, required to give some part of their production as tribute. This tribute is then used to enrich the monarch, and fund an army to (a) keep those already conquered in their state of being plundered and (b) conquer new people to plunder.

    The idea of using the tribute to fund State services is a later development on this, and can quite reasonably be seen to be a justification for the plunder. Eventually this develops into a system in which all of the conquered-and-plundered, now declared to be “citizens”, are enmeshed in a system of plunder against each other, via the government and its threat of violence. The plunder of all by all.

    None of which demonstrates any “need” for this system; all we can see is how it developed, from the first king who lusted for the grain and spices and gold produced by other people, and who understood that the use of force would allow him to acquire it.

  10. “…. but there cannot be any debate about…”
    What prevents it? What would happen if there was?

  11. IanB and Davidncl – The one thing that any society must do is provide the means to defend itself. That has far reaching consequences, because it is not only the requirment to maintain armed services which comes into play. A country needs to be able to supply and improve its military equipment; it needs to have sufficient resources of raw materials and the production to not only maintain the military but also to keep the population fed and provided with other essentials. All of that requires both a great deal of money which history shows uniformly can only be provided by the state using taxes to fund it. In addition, the state needs to provide the focus for national action.

    Most libertarians would also include justice and policing in the minimal state, something which again has to be funded from taxes, not least because private funding would destroy any pretence of equality before the law. That is another large taxpayer cost.

    Even the most limited libertarian state would have to raise considerable amounts of money to achieve all that. It is also true that many of the most famous and popular figures amongst libertarians advocated much more than simply the supply of armed forces and the things that underpinned them. Adam Smith was crystal clear on the need fopr the state to undertake not only defence but to fund the making and maintenance of highways. Hayek advocated a basic welfare state.

    I come back to my original point: once a society grows beyond the tribal, by which I mean a tribe of a few hundred where everyonce knows each other, there has to be some level of taxation.

  12. @Robert If you read more and more widely you’ll find that there’s a substantial and respectable body of libertarian litarture arguing for a much more radical position that the one you seem to have adopted. I suggest most libertarians lean towards one of those positions. In fact (I think) the very first Libertaian Alliance pamphlet I read was Chri$ Tame’s “All Taxation is Theft” So saying that taxation is wrong is, if anything, a mainstream libertarian viewpoint. It’s not the fact that you don’t agree that I find breathtaking (very few people do, I’m used to that) it’s the fact that your posting on the LA blog, and you don’t *know* that.

    If your seriously interested, ask and I or someone else will post you some links/refs. But I’m not doing a comment war where I rehash “Man, Economy & State” or “The Law” or whatever so don’t bother “debating” with me.

  13. Robert Henderson.

    Military spending in the United Kingdom is heading towards 2% of GDP – whereas government spending in total is close to half of GDP.

    So the vast majority of taxation is nothing to do with the military.

    Nor is the miltary used to defend Britian – on the contrary sworn enemies of Britain (open Islamists) are allowed to settle here (indeed, as you know, the government offers them free health care and so on) and any member of the armed forces who tried to stop them would be sent to prison.

    The police?

    Again a tiny percentage of total government spending – and police forces were not compulsory in English and Welsh counties till 1856 (I suspect the population were not eating each other in 1855).

    The modern tax system is primarily about funding the Welfare State.

    You know this.

    Them modern antics of the tax authorities are not about defending the Realm (or anything like that) – they are about desperately trying to prop the Welfare State.

    Even the banking credit bubble……

    A banking bubble encouraged, every step of the way, by government (although now they pretend it was nothing to do with them).

    This banking credit bubble, the new “Finance Economy”, was seen by Mr Brown as a way of financing the Welfare State.

    After all about half of the incomes generated by the new “Finance Economy” were taxed away by the government.

    However, of course, the “FInance Economy” turned out to be based upon magic pixie dust, and Moonbeams (as some of us kept saying – again and again, for years…..).

    In our hearts we all know that the unlimited Welfare State is unsustainable and nothing will change that.

    “Pull out of Afghanistan” – I quite agree (but that will only fund the W.S. for a couple of days).

    Nor will banker bashing, or banning corporations do any good – indeed that will just make the crises come sooner.

    The Soviet (sorry Russian) propaganda line that the Americans and European could have their unlimited Welfare State if only they hit “the bankers” or “the 1%” of rich people generally, is a lie. A vast lie.

    The present W.S. is unsustainable – in Britain, in Continental Europe, and in the United States.

    And no savage tax enforcement is going to change that fact.

  14. “But if there were no corporations, people would run their own small business enterprises and the Welfare State burden would decline”.

    No it would not. The whole economic thinking behind this “anti corporate” claim is wrong.

    Indeed such action, ending the corps, would only bring the crises upon us quicker.

    Although, as the crises is soon upon us anyway, it hardly matters at this point.

  15. @Paul – have a look at Robert’s blog. I think it’s fair to say that his mind is made up about free markets and not in a good way.

  16. I think I will take your word for it davidncl.

    I forgot where I was – there are still some libertarians on the Libertarian Alliance site, but there are “friends of Sean” as well.

    By the way if you are based in Australia (as the picture might hint) you are likely to be in good (or less) bad place than the rest of us in the comming crises.

    Australia will go through tough times (very tough times), but nothing like as bad as most of Europe or the United States.

  17. Actually, Paul I’m in the socialist republic of Newcastle (as in Tyneside)
    and I’m well aware of the oncoming storm.

  18. Not good davidncl.

    Still I hope your plans to survive the comming storm are better than mine.

    As my Irish ancestors would say “I would not start from here”.

    Of course my Jewish ancestors would say something intellectual – but I am not in an intellectual mood right now. I am in a “Hulk Smash!” sort of mood.

    I need a walk.

  19. Paul Marks – I did not stipulate the size of the taxation required, Paul, merely that taxation at some level is inevitable. Moreover, even defence, policing and the justice system would be around £45 billion.

    As for no compulsory police forces until 1856, there were police of sorts funded from the public purse (Parish constables) and in London the Bow Street Runners operated from he second half of the 18th century . It is also true that prior to the establishment of modern police forces there were, especially in London, state no-go areas known as liberties which lasted until the 1850s – one liberty based around the Holborn area was the last to go. Nor do we have any meaningful statistics until the Victorian era of the extent of crime in Britain.

    As for the Poor Law, famine was a common experience in Europe well into the 19th century. Famine in England ended in the early years
    of the 18th century. The Poor Law was not a panacea but it removed the shadow of famine from England and Wales. The Irish famine was a wholly exceptional event with the faiulure of a crop which was the staple food of Ireland, the potato. It was something utterly new and I doubt whether any state of the period could have handled it. As it was, tthe Poor Law provided significant aid although nothing like enough.

    As for Scotland, you need to remember that Scotland forcibly exported with the Highland Clearances much of its population between 1750 and 1850. This removed pressure on food supplies there, as did Irish immigration during and after the famine in Ireland.

    davidncl – Why not give me your own thoughts rather than the thoughts of others?

    As for my libertarian credentials, I am strongly libertarian in spirit and in practice on many core libertarian issues – absolute freedom of speech, the legalisation of all drugs, the right to bear arms and a minimum of laws and regulations – but I also understand both the social instincts of Man and the need to prevent the creation of plutocracy which is a de facto form of authoritarianism. I call myself a social libertarian.

    On economics my position is this, there should be clear lines drawn between what is public and what is private. It is for example, quite wrong for prisons to be privately run. There should be protectionist barriers to ensure a broad and strong domestic market. Within the domestic market , the vast majority of economic activity should be undertaken by private enterprise with little interference from the state.

  20. Edwin Chadwick’s reports against voluntary law enforcement (and a lot of other things) are basically collections of libels (as a utilitarian he did not regard truth as important in-its-self only the consequences of a statement mattered to him – therefore he would say, and write, anything he regarded as leading to the greatest happiness of the greatest number).

    A Poor Law can not create wealth only reduce it – therefore it can be responsible for the long term reduction in povery in England and Wales (or anywhere else). Although that does not mean that some good can be done in “life boat situations” in the short term.

    Ireland (or any mass economic breakdown) destoys any system – as the wealth on which such a system depends is (yes Mr Henderson) simply not there.

    However, the sums of money spent on the Poor Law (at least in the High Victorian period) were not crippling, they were a sustainable (not unsustainable) burder, ditto the sums of money spent on the police and so on (at that time).

    If I was like Chadwick (i.e. was prepared to manipulate the facts to serve my cause) I would say that the Tudor Poor Law (or the 18th century Acts of 1723 or 1782) or the Act of 1834 made the modern bankruptcy inevitable.

    However, that would be a lie.

    There is no reason to suppose that the Victorian Poor Law system would naturally have grown into anything like the present monster.

    The schemes that have grown were designed (yes designed) to grow like cancers.

    That was the whole point of the “Minority Report” written by the Fabians and their servants – it is even one of the things they boast of in the “Fabian Window” (if one takes the trouble to really look at this stained glass window).

    Cloward and Piven (or Mr and Mrs Cloward – as the old style would have it) did not invent the tactic of bankrupting “capitalism” by welfare schems that are designed (yes designed) to grow like cancers.

    The idea was developled before they were even born.

    So yes Mr Henderson.

    We might argue over whether the Poor Law was needed or not.

    But I am not going to argue that he Poor Law (as it was structured in the Victorian period) had anything in it that would have inevitably grown out of control.

    Had it been left as it was (or even modiefied in line with the Majority Report, not the Minority Report, – much like the Scots Poor Law of 1845) there is no reason to suppose that it would have destroyed civil society.

    I, no doubt, would still grind my teeth and complain.

    But I am not going to pretend that the Victorian Poor Law was a threat to civilisation. Because it was not. It was changed (fundementally changed) by the Fabians and others (in the 20th century) to gradually become so.

    These people are astonishing in their ability to think long term. And to think internationally – as they have the counterparts in most other Western countries, over time.

  21. Paul Marks – The reason that the Poor Law was reformed in the 1830s was precisely because support of the poor by taxpayers was thought to have got out of hand, especially with what was known as “Outdoor Relief”, ie, money given to the poor while they lived outside of the poorhouse, and personified in the Speenhamland system .

  22. Agreed Mr Henderson.

    Starting in the late 1790s (with, yes, the magistrates of Speenhamland) J.Ps abused the powers granted under the 1782 Act to engage in mass wage subsidies – rather like Gordon Brown (although the system was vastly less expensive than the modern W.S.).

    As you know the Act of 1834 did not ban Outdoor Relief (indeed there were always twice as many people on Outdoor Relief as in Workhouses) – what it did do was restrict Outdoor Relief being applied to fit and able bodied people. And established the direct election of Poor Law Guardians (by the ratepayers, including women I believe – but not by the people taking the government benefits, one of the fundemental flaws of our system) subject to regular reelection.

    There were problems with the 1834 Act – if was legally a gray area whether someone could be ordered to go to a Workhouse or not allowed to leave once there.

    The Scots Act of 1845 (I believe) makes clear that no one can be ordered to go to a Workhouse – and if someone believes they have made a mistake by going to one, the door is open for them to leave.

    Of course the Scots Act does not (in most of Scotland) replace a compulsory system.

    In most of Scotland there was no compulsory Poor Rate before 1845.

    The Scots (led by people such as Rev. Chalmers) were very proud that they helped the poor – voluntarily.

    The vast change in the Scots character (from being such a proud and self reliant people – to being what they are now) is astonishing.

  23. I believe that the changes proposed to the Poor Law by the Majority Report (supported, I believe, by people in the tradition of Octavia Hill and C.S. Locke – people who had spent their lives “getting their hands dirty” by physically helping the poor) would have improved the system in England and Wales.

    However, this was not the road the Powers-That-Be choose to go down – basically the governments (of all parties) over the next few decades choose to follow the ideas of the Minority Report.

    A report written by people who were not known for giving much (if any) of their (often very great) income to the poor – let alone getting their hands dirty with any practical help (changing the bedpans of the sick and so on).

    For more than a century now government policy (of all parties) has been under the influence of a gang of Hampstead socialists.

    And in other nations the situation is much the same – with their own versions of socialist “planners”, who dominate the universities and (via the education system) dominate everything else.

  24. Paul Marks – the system before the 1834 Act had the same effect, for able bodied employed workers, as working tax credits in that it lowered wages as employers knew they could pay a wage below subsistence because the taxpayer would make up the difference.

    By the way, be cautious about judging that the he Poor Rate was not onerous. It was levied locally not nationally and consequently varied considerably from parish to parish.

  25. Agreed Mr Henderson.

    The Poor Law rate had got very high in many rural areas before 1834 – which is why action was needed.

    On the other hand in many northern cities the burden of the old Poor Law was much less – so the new Poor Rate was actually higher than the old one.

    Of course the change to elected local councils (after the 1835 Act) also increased local taxation in the cities.

    This was especially true in Manchester – where the campaign (pushed by the Manchester Liberals) for an elected council was based (in part) on promises that it would cost less than the evil-corrupt Tory Closed Corporations.

    Almost needless to say – the new council cost more than the old one.

    Later Manchester started to take over things – for example the gas supply.

    This was not inevitable – for example Newcastle had private enterprise providers of the various things (gas, electricity……) successfully. Newcastle was still a basically free market city right up to the First World War (the decline of the such formally basic industries as ship building really hit such cities badly after the First World War – although there were problems developing even before the war, due to the Union Acts of 1875 and 1906).

    There was something somehow wrong with “Manchester Liberalism” long before most people think the problems developed. There is more to, proper, liberalism than just free trade.

    Although I was still shocked (when I visited Manchester) that they have got rid of the Free Trade Hall.

    No real sense of history – even the science museum (and Manchester has such a wonderful history in science) was just full of P.C. ……

    Still. perhaps I needed a guide who could have shown me a better side of things.

  26. Getting rid of the Free Trade Hall shows a depressing lack of civil pride.

    If you don’t care for your own city why should anyone else give a damn?

  27. They may have had a good reason, I just do not know.

    But, on the face of the matter, it does seem to be terrible.

  28. In Leeds they turned the exceptionally fine Victorian Post Office into a winebar and apartments. I don’t think there was any good reason, just saving a tiny bit on maintenance, all the while spraying money on countless dubious expenses.

    And so a Northern city loses another little bit of its character.

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