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The chancellor is reported to have said that if he sells any of his properties, he will pay capital gains tax at the 28% rather than at the 24% rate which he announced in the Budget. This might be good politics – showing he is whiter than white by not taking advantage of a tax change he had made – but I find it troubling.
Chancellors should not use their influence to obtain benefit not available to anybody else. The days when Winston Churchill could lobby the head of the Inland Revenue to give him special treatment are long gone, and even the most cynical observer of politics would surely accept that things have changed. If you don’t know the story of Churchill and his tax affairs, I urge you to read ‘Churchill and the Taxman’ in History Today (tinyurl.com/htchurchilltax) – what went on is quite astonishing.
But back to Mr Hunt. Will every chancellor now have to make a personal statement after a tax change to say that he (or we hope one day she) will still pay tax on the old basis? That seems to me to be unwise. A chancellor who increased taxes but said that the increase wouldn’t apply to them wouldn’t last five minutes. So why should things be different when taxes go down? Either a particular tax rule applies or it does not. I found the pressure on Rishi Sunak’s wife to abandon her non-dom status quite wrong. She was simply filing returns on a basis that she, like anybody else in her position, was entitled to.
If politicians do not pay the taxes that are due, they should certainly face the consequences. But let’s have no more virtue signalling. It is unnecessary and ultimately undermines the integrity of the tax system.
If you do one thing...
Read the consultation on raising standards in the tax advice market (tinyurl.com/hmrcraisingstandards) – make your views known to HMRC.
