CENTRE POINT
Try to regard your Revenue tax return as a democratic icon, on a par with the franchise
SIMON JENKINS
November has come and I am late. Falling leaves bring the manila down from the shelf. A long day must be given over to the Great Reckoning. Normally I try to beat Hallowe'en. I don a cardigan full of holes, mull the wine, grab the boiled sweets and play trick or treat with Her Majesty's Inspector of Taxes. This year I am overdue. I am at Guy Fawkes night and into the buff reminder zone.
I try to regard the Revenue tax return as a democratic icon, on a par with the fran- chise. For the majority of citizens it is their most intimate encounter with the state. Indeed it is more than an encounter, it is a Contract. The ballot is one side of a politi- cal bargain; form P60 is the other. They are the warp and weft of democracy. The system known as Pay-As-You-Earn has always been an abuse of this contract. It relieves the majority of taxpayers of the rit- ual of actively paying money over to the Government. It anaesthetises the tax expe- rience. It reduces taxpayers to the status of Treasury helots. They pay tax as they breathe. For them, being taxed is what computer-speak calls their default mode. And, since they never stop paying the Gov- ernment money, the Government never stops spending it. Small wonder the public sector is imper- vious to shrinkage and the Tories now levy more in tax than Labour did. The money keeps flowing in. From the moment the Government was put on the drip-feed of Schedule E, public revenue has been as buoyant as the employed population. When in the 1960s MPs ceased being self- employed representatives of the people and became employees of the state, they lost interest in tax simplification or in serious tax reduction.
There remains that sterling corps of knights errant who do not pay as they earn, but complete the Schedule D self- employed return. They are not conscripts to the Revenue's colours but volunteers. Each year as they fill in their return, they briefly suspend their bargain with the state. They are not to be herded under the flimsy device of form P60. Like Stanley at Bosworth, they are independent spirits ready to sense the mood of the moment. When finally they ride into battle, they do so under a more splendid banner, 'form lip, with notes'. The killjoys of form 11P are this year the Institute of Fiscal Studies. It has set up a group under Lord Howe to investigate `simplifying the tax system'. In the 1979 Tory manifesto, his lordship pledged that he would 'simplify taxes'. He was Chancel- lor then and did not get round to it. He had the power but not the time. Fifteen years on, he has the time but not the power. If he failed to untie the Gordian knot then, I cannot believe he will do so now. Nor should he try.
The essence of form HP lies in its com- plexity. Even its source is surreal. Mine emanates from a galaxy known as London Provincial 22, located in 'Management Unit Five' in Edinburgh. Despite these cosmic origins, the form's language is a paragon of clarity. It has been torn apart by the great- est sub-editors in the land at the behest of successive Chancellors. The grammar pass- es muster. The jargon has been debugged. Awards for good English have been won. Form 11P is a good form. Yet none of this has infringed its inherent complexity.
The Schedule D taxpayer is addressed in crystalline prose, as befits his freebooting status. The agents of the corporate state cannot pin him down with Morton's fork. Inspectors must burrow into his Rent-a- Room scheme, his free-standing AVC, his 'business of less than £15,000'. They must know of his first-bond options, holiday lets, ground rents and feus, mortgage relief, child support and alimony. Merely to read this glorious form is to glimpse another England, and perhaps another life. 'You are living with your wife,' declares 11P with exemplary precision, inviting a tick of mat- rimonial consent. It hesitates and offers an escape: 'You separated before 6 April 1990 but are still married to her.' There is anoth- er pause and another thought: 'Tick here if your wife is likely to be unable to look after herself throughout the tax year.' Like the News of the World, 11P knows all of human life, but knows also when to make its 'How do you like your eggs?' excuse and leave.
There is no way this can be abbreviated without losing its humanity. Schedule D is for designer taxes, taxes a la carte not table d'hOte. This is taxpaying for the connois- seur. The inspector wants to know if a fuel claim is for petrol or diesel, if a letting is 'in your main home', or if 'you are signing as trustee, receiver or factor'. He is meddling, but to suit his tax to your 'personal needs'. To simplify may make his job easier. It will not make the tax more friendly to the user.
Hence we should resist the spreading curse of tax deduction at source, of Miras and payroll giving, of the monstrous 'tax credit'. All are devices to drive Schedule D taxpayers under the yoke of PAYE, to make them pay tax faster, sooner, above all without questioning. Deduction at source is meant to sanitise personal taxes, as Lady Thatcher sought to sanitise local rates by nationalising them. She wanted to take our money without it hurting.
The same goes for those barber surgeons of the tax game, the accountants. Even before the 'Taxpayer's Charter', the Inland Revenue was obliged to offer fair advice, including on allowances and deductions. In my experience it does this scrupulously.
There is a named inspector and direct dialling number on the form. I dump on my inspector's desk the same bumf I used to dump on my accountant's, and ask the same questions about avoidance. These days only fraudsters and social climbers need an accountant for income tax. (In this respect Revenue inspectors are different from VAT officers, who work on incentive bonuses and are thus tax farmers.) I believe that the pain of taxation should never be relieved. It proves that the citizen is still alive and kicking. His contract with government is an individual one, like the vote. My one revision to form 11P would be to make this contract explicit. It should declare the purpose, however general, to which the Government intends to put my money. And it should print the name and phone number of my parliamentary repre- sentative, without whom taxation, as Cam- den said, is mere robbery. If MPs are pestered in consequence, that is their job. A bargain has been struck with the state.
The MO is its guarantor. Autumn is when Shylock pays, and when he wants to see his bond.
Simon Jenkins writes for the Times.
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