Dave Penman: Gove and Johnson’s HMRC attacks an unacceptable slight on civil servants

Two Cabinet ministers have effectively accused civil servants of politically-motivated attacks. They cannot hide behind anonymous sources to attack hard working government professionals


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By Dave Penman

04 Jan 2018

I'm not one for New Year’s resolutions. I like my food and I'm a bit of a cliched Glaswegian, with a penchant for the bevvy. If it wasn't for the fact that I've never smoked, I'd probably be reinforcing those life expectancy figures for the east end of Glasgow that are so startling.

This year I thought maybe I'd try something different and I resolved to be nice to the politicians who've been the subject of some vitriol from this column over the last few months. It did not go well. A resolution to give up square sausage and Guinness could not have been succumbed to so quickly.

On New Year's Day that nice Mr Farage was given a few column inches in The Telegraph to jump on a bandwagon that had been rolling along for a week or so, alleging that "Brexit-backing entrepreneurs" (or multi-millionaires as I like to call them) were being targeted by HMRC. "Revenge of the Taxman", the headline screamed.


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Essentially the story was that donations to the Leave campaign from these millionaires will be subject to inheritance tax. “Revenge of the Establishment” is the cry and the accusation is that Leave donors have been singled out.

This actually isn't a very contentious or complicated piece of tax law. It derives from section 24 of the Inheritance Tax Act of 1984. Basically, donations to political parties are exempt, but not donations to political campaigns. It is, of course, a piece of UK tax law, passed in the mother of Parliaments, piling on so many ironies that you can barely see Big Ben over them. Now you can argue that political campaigns should be included, it's a fair point. Any government, including this one, could change that law – but the fact is they haven't.

It will have come as no surprise to these multi-millionaires that donations exceeding the £325,000 threshold would result in a tax bill. If they can afford to make a donation that big, they can afford to hire very expensive tax consultants. Of course, they could have got better advice for free from the tax professionals at HMRC, who are paid a fraction of the salary these millionaire donors pay their advisers.

They knew they would be subject to tax and they knew that donations to both the Leave and Remain campaigns would be treated the same, so no particular side was targeted. They knew it and the Telegraph knew it, but it didn't stop them from whinging about having to pay tax and running an “Establishment conspiracy theory” story. No surprise, therefore, that Farage jumped on the bandwagon to prove once again how this former merchant-banker-turned-career-politician really is an anti-establishment hero.

But the Kipper wasn't the source of my resolution transgression. It was Boris Johnson and Michael Gove, who apparently weighed in on the subject via the Sunday Telegraph. I say apparently as neither was directly quoted. Sources close to both ministers made their concerns clear. These millionaires were apparently plucky individuals being hit by HMRC for supporting a grassroots campaign. It will, according to the source close to Mr Gove, appear to many like an attempt to silence anyone who dares challenge the establishment.

So two Cabinet ministers are adding weight to a conspiracy theory that HMRC is deliberately targeting donors to the Leave campaign. Two prominent members of the current government are effectively accusing civil servants of politically-motivated attacks.

They will of course hide behind the defence that they cannot be held responsible for what others say in their name, but journalists know who is and isn't a reliable source among the coterie that surrounds these politicians. In my book, those who indulge in this game of plausible deniability bear the responsibility for those sources if they do not explicitly deny them.

I do not have the words to sufficiently explain the outrage felt by FDA members in HMRC over this issue. They've come to expect it from Farage and the millionaire donors who don't like paying their way, but for two ministers in the government they serve to effectively accuse them of manipulating the tax system for political ends is simply unacceptable.

Assessing and collecting tax is difficult enough. Yet despite ever-decreasing resources, through their dedication, skill and professionalism, tax professionals delivered a seventh consecutive year of increased tax revenue and exceeded the target for compliance yield (the bit that comes from action against those that attempted to break the rules).

Our tax system works because most taxpayers accept that it is applied fairly. Undermining this key principle inherently damages the integrity of both the system and the individuals who work to deliver it.

Responding to this story, sources close to Dave Penman said: "It takes a particular calibre of minister who is prepared to knowingly and deceitfully sacrifice the integrity of the civil service for their own partisan political agenda”.

"Penman has also given up making new year resolutions," the source added.

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