The revelations of widespread abuses of the expenses system by MPs, including Alistair Darling’s claim for his personal tax advisor and Gordon Brown’s “oversights”, has seen all MPs tainted.
Perhaps expense claims should be subjected to extended verification, and then refused, requiring an appeal by the individual MP to a Tribunal?
MPs would then have to pay for all the legal costs themselves and would have to carry the burden of cash flow and the possibility of having to cease being an MP until the appeal is resolved.
The backlog of Tribunal slots may mean a delay of two to three years before being heard. If the MP is successful, the authorities may still refuse to accept the Tribunal’s decision and appeal to a higher authority, causing more delay.
Of course, this would be very unfair, but it is exactly what has happened to traders caught up in the broad-brush campaign by HM Revenue and Customs (HMRC) against the ‘grey market’ in mobile phones and computer components.
It was Gordon Brown who authorised the extended verification process, for which the legal basis is highly questionable. It was a desperate measure to support the Treasury budgetary deficit.
HMRC has relied on “tainting” everyone associated with the grey market in Tribunal. It is time for the authorities to act to restore fairness to the system and support legitimate traders whose alleged connection with an alleged fraud is so far removed. It is totally unreasonable to jeopardise the future of hundreds of businesses that have contributed so much to the UK economy.
HMRC uses the argument that a trader “knew, or should have known” as a reason for withholding millions of pounds of VAT input tax refunds – which we must remember have actually been paid out in good faith by the trader concerned, despite the lack of evidence of participation in fraud (unlike some MPs who have allegedly claimed for fictitious mortgages and council tax to avoid capital gains tax).
I am not suggesting all the good MPs should be treated badly or unfairly by the system, but hopefully they will now understand the issues of tainting all because of the actions of the few.
Many local and senior MPs have been approached by traders concerning the attack by HMRC on the legitimate grey market, but very few have stood up for fairness and questioned the legitimacy of HMRC’s assertions, despite the fact much of HMRC’s so-called evidence to Tribunals is based on hindsight and conjecture.
Instead of being intimidated by the Treasury and worrying about “supporting fraudsters”, MPs should now realise we must protect the innocent and reverse the much-quoted policy of Dawn Primarolo, who when Paymaster General said: “We cannot promise one innocent [trader] won’t get caught up, but a delay for the innocent is better than a payment to the guilty.”
The fact is hundreds of innocent traders have been caught up.
Primarolo claimed on a second home in Bristol. In 2004, she switched to a London flat and claimed mortgage interest payments. Perhaps these claims should be refunded to the Treasury pending an investigation?
It is interesting to hear MPs blaming “the system”, and of course their low pay. In hundreds of cases, traders have lost their businesses, homes and futures.
It was the VAT system and the guardians of that system that let them down. The VAT system is fundamentally flawed, and many of the problems have resulted from HMRC failing in its duty to correctly vet VAT registrations and monitor claims and transactions.
If HMRC cannot undertake effective due diligence, how can traders be expected to police the system for them?
Full article in Mobile News issue 443 (July 13, 2009.
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