Taxidermy: getting under the skin of tax law
‘Thank you for your Tax Returns ended 5th April 2006 & 2007 which we received on 20th December. I will treat your Tax Return for all purposes as though you sent it in response to a notice from us which required you to deliver it to us by the day we received it’.
In my line of work I get letters like that from HMRC quite often.
In 2002 an NAO investigation
found that difficulty in completing forms was a major reason why pensioners did not apply for benefits available to them. Wearing my other hat as a Judge of the Upper Tribunal, I read these forms and they are, in many cases, masterpieces of misleading simplicity.
Making official forms more understandable (which is not the same as simpler) could have clear benefits for government. HMRC have estimated
, for example, that around £300 million is lost in underpaid tax each year due to unintentional errors by taxpayers when completing their self-assessment forms. (They remain strangely coy when it comes to estimating the extent of errors leading to overpayment of tax.)
The PAC Chairman, having quoted Orwell’s comment that political prose ‘consists less and less of words chosen for the sake of their meaning and more of phrases tacked together like the sections of a pre-fabricated hen-house,’ started the process of taking oral evidence with the question, 'Does this drivel matter or does it just irritate us?'
Based on my experience while writing the second edition of my book
on stamp duty land tax – or more specifically the three days I spent staring at one section of the Finance Act 2007, trying to make sense of it – my answer to the Chairman’s question is a heart-felt, resounding ‘Yes!’ (Yes, it does matter and yes, it is also extremely irritating.)
In 1975, the Renton Report on The Preparation of Legislation
commented (quite rightly in my view) that ‘the legislative output of Parliament is often incomprehensible even to those who are most familiar with the subject-matter.’ Some 20 years later, explanatory notes to accompany proposed legislation were introduced, with the aim of making things clearer to a non-specialist audience. Here's an example of an explanatory note
produced by the Treasury in relation to what became section 24(1) Finance Act 2009:
‘Subsection (1) explains that Part 2 of the Capital Allowances Act 2001 (CAA) has effect as if mention of the clause appeared in section 39 and mention of the clause and the 40 per cent rate appeared in the Table in section 52(3). This is because Part 2 will not actually be amended as the clause is only a temporary measure but all the provisions in Part 2 are to apply for the temporary period as if it was a new section in Part 2.’
Well I’m glad they cleared that up. Thanks, guys.
In giving evidence to the PAC, Matthew Parris suggested that mockery served a useful purpose in reducing the extent of official bad language. Somehow I don’t think that approach would go down too well with HMRC.