HMRC should have moral obligation to taxpayer

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Evasion and aggressive avoidance are wrong, but HM Revenue & Customs has a moral obligation to the taxpayer to ensure that its requests are reasonable and fair.

Fifteen years ago, the relationship between taxpayer and tax collector was much more evenly-balanced. Now there are punitive penalties for failing to submit returns, even if no tax is due or if HMRC owes a refund.

It is time that the debate on the morality of tax turned its focus on those powers, which often have a detrimental effect on those on low incomes, the isolated, the vulnerable, and older people.

Our tax code is hugely complex. The most popular edition of the tax guide now has over 17,000 pages, and the system is especially complicated for pensioners.

In the last year of the Labour government, the National Audit Office estimated that some 1.5 million older people had overpaid tax. The complexity of the tax code and the frequency of HMRC errors mean that it is not reasonable to expect the burden of checking demands to lie entirely with those vulnerable people.

HMRC must at least have some responsibility for its own mistakes, especially if the consequence to the taxpayer of fulfilling a retrospective demand would be great hardship and it would eventually be detrimental to the public purse.

HMRC should have an obligation to ensure that tax codes are correct, all due allowances are applied and that people are being as tax-efficient as possible.