Earlier this month it was the news that tax inspectors could soon be listening in to your business discussions via a bugging device officially sanctioned under new legislation.
This week we learn that HMRC has parted with £100,000 of taxpayers’ money to line the pockets of an informant who has, in turn, handed over intelligence on British citizens using the tax haven of Leichtenstein. The tiny principality hit the headlines last week when it emerged the same informant had supplied information to the German intelligence services on the financial affairs of hundreds of wealthy Germans.
HMRC hopes that its modest investment would enable it to recoup at least £100m in tax revenues, which would be an impressive achievement. But what are we to make of its latest venture?
Clearly HMRC has entered a cloak and dagger world of eavesdropping and informants that would make George Smiley proud. It displays a hard-line attitude towards tax avoidance that we had not anticipated and a level of intervention that we could not have imagined. It is perhaps instructive that when the German news broke, it would not have occurred to many that HMRC was involved.
Will our own intelligence agencies in future partner the taxman in big investigations? HMRC must speculate over the investigation skills our own secret services might have the taxman could only dream of. But the direction of travel smacks of a shift to a more authoritarian and interventionist approach to tax that creates more than a little discomfort.
A taxman invigorated in this way could begin to blur the lines between what is acceptable and infringing on our civil rights. That’s a disturbing move and deserves serious debate before we begin talking of a merger of HMRC and MI5.
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