30 November 2017
Autumnal Cheer
Tax return time is here.
By Chin Chin
For many, autumn is a sad season. The warmth has largely gone out of the sun and, although the days are often bright, the weather is turning colder and wetter. For those who live in the country it may be an opportunity to stride with dogs through the crisp leaves, the warmth of rural clothing matched by the prospect of a good log fire in the grate and a glass of something fortifying with dinner. For those of us in town, however, it is merely an opportunity to slip on the badly swept pavements and curse the fact that we did not have the central heating serviced while the weather was still fine. There are no glasses of chardonnay in the garden now. Just a dismal reflection that the leaves need to be swept up again and anxiety that the longish grass is encouraging moss.
But cheer up! As Sir Walter Scott remarked in Rob Roy “But it’s an ill wind blaws naebody gude” and, despite Thomas Beecham’s suspicion that this was merely a description of the French horn, the proverb still applies today. So what is the “gude”, the silk lining of autumn? Each of us will have a favourite candidate but in my case there is no doubt at all. The highpoint is doing my tax return.
Some people pay professional firms to do their returns for them but they are missing a great opportunity. From late November to the end of January, tax return duty is an all-purpose excuse. Can you help with the washing up? No, just got to find that invoice for repairing the computer. Will you be coming to the evening with the neighbours (the ones who serve that warm yet acidic prosecco)? I would love to of course but just need to press ahead with those returns. Why do you spend so much time late at night in front of the screen? Are you watching porn? Certainly not, it is just that the Cayman Islands are in a different time zone.
Actually the Paradise Papers have added an extra dimension to this. Top entertainers, top sportsman, top Duchies, they all have interests in tax havens. An offshore presence is as crucial to being a top person as a polo pony is to being a Ralph Lauren sock. So if you want to create the right impression you need to find ways of suggesting to your friends that you might feature in the next release of Paradise Papers.
This has to be done very indirectly. A straight “I am worried that I might be tracked down by Panorama before long” is likely to be ignored as vain boasting. The trick is to leave a clue for your friends to notice, and then deny any offshore investments at all. In my experience Panamanian law firms will respond with a satisfactorily bulky package if you write asking them for their standard terms and conditions. You can leave the unopened package on the mat as if it had just been delivered and then ostentatiously put it on one side with a slightly embarrassed air, muttering about “planning a holiday.” That should get the odd tongue wagging.
The difficulty of course is in making a sufficiently lasting impression. Your friends may find it surprisingly easy to forget that you are a top person, so you have to keep the illusion that you are disentangling offshore structures going for some time. Anyway, once the returns are completed you lose all those excuses for avoiding domestic chores and social occasions. How can you justify spreading the completing of your return over a couple of months? It is here that you have an unexpected ally: HM Revenue and Customs.
Although it would obviously make sense for the submission of tax returns to be simpler, that would do serious damage to the economy. One of the government’s key indicators is the ratio of debt to GDP and Mr Hammond has made great play of the fact that it should peak this year. It is therefore the duty of the Treasury to do all that it can to support the GDP figure. Unfortunately its influence over most areas is very limited. Control of interest rates has been ceded to the Bank of England. Reducing taxes is politically very difficult. Even growth in the building of housing, which the Prime Minister herself has undertaken to support, is likely to get bogged down by the planning process.
Still, there is one area where the government can boost output very directly. If they manage to make submitting tax returns difficult enough, people will have to instruct accountants and the fees paid to those accountants will be an addition to GDP. It is a gratifying reflection on the quality of our public servants that they have approached this essential task with such zeal. While pushing everyone to complete returns online, they make it steadily more difficult to access the site by adding to the complex User ID and password a requirement that you receive an access code by text. Brilliant for those who do their spouse’s returns as well and have to keep ringing them up to see if they have received the text. Good too for those who mislay their mobile phones. There are secrets in the way in which income has to be returned, too. No doubt this year’s form is a model of clarity, but have previous forms made it clear that dividends from offshore debt funds should be taxed as interest? The hell they have.
All this confusion encourages frustrated taxpayers to entrust their affairs to an adviser and no doubt that pushes up GDP. For me, however, the complication has quite a different advantage. It means I can take an age over my returns and continue to use them as an excuse to avoid domestic obligations until well after Christmas.
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