The Sheer Horror of Tax Consultants
"Why is it?" someone once asked, "that people can be perfectly reasonable when they work in the Department, and then become utter bastards as soon as they set up as tax consultants?"
The only explanation I could think of was that they knew that decisions about tax were sometimes a matter of interpretation and nuance and got frustrated that they couldn't get their hands under the bonnet any more.
(Before any Pukka Sahibs kick off to say, "it's not that way in direct tax", I'll make it clear I'm talking from the limited perspective of Cream Tea Duty).
As far as interpreting the law goes, the job of an Officer in Cream Tea Duty was to say, "No you can't do that!" It was the job of the Higher Officer to then come along, stroke his chin and say, "Hmm, let's see if there's another way of looking at that."
Of course, when it suited tax consultants, they'd often say, "Parliament makes the law. It's not up to HMRC to say what the law means." But, of course, it's not always easy to understand just what Parliament was thinking of when they made the law, and traders were usually happy for HMRC to provide an interpretation of the law, if it delivered the result they wanted.
For the HMRC staff, it made the job more interesting. After a spell acting up to Higher Officer and stroking my chin, I found it difficult to go back to saying, "No, you can't do that!" So, I can understand how frustrated the tax consultants felt now that they were outside the tent.
I guess a lot of it is also because you can invest a lot of emotional energy in the intellectual challenge. Digressing to Slap And Tickle Duty for a moment, I did have one tax consultant complaining because the processing staff were being obstructive. He'd studied the law and found a loophole which meant we absolutely had to register his client. He'd constructed a detailed submission and wanted to know why the processing staff had come back asking him questions, rather then forwarding his submission to Policy. The answer was that you can only appeal against a decision, and we hadn't actually refused the application yet. You can imagine how much lip we'd have got from Policy if they'd started work on his submission (which was, admittedly, intriguing) and then we'd turned round and said we'd approved the application.
But, going back to Cream Tea Duty, by far the aspect which had me waking in the middle of the night screaming was Dutch Tax Consultants. Of course, there are no Cream Tea's as such in Europe, so the whole thing came under the European General Pastry Duty, which took in Cannoli, Le Gouter, Cream Tea etc. Every so often, one of our Policy people would troop over to Brussels and sit in a conference where the various member states would try to ensure that the regulations matched the unique circumstances of each country. But as each member state had started out with a law to tax its own native industry, there was often a lot of ambiguity.
Some Dutch Tax Consultants seemed to revel in the ambiguity and would spend a lot of time and effort trying to prove that their client's product was not actually taxable. I'd suddenly receive a letter on behalf of a Scone importer, attached to an untranslated report from Dutch Customs. "Dutch Customs have accepted that lab analysis shows the product known as Scono does not meet the molecular definition of pastry under General Pastry Duty. Please confirm that my client's product is no longer subject to Cream Tea Duty."
After half a day running the document from Dutch Customs through Google Translate, I'd discover that it actually said Scono did not meet the Dutch Excise definition of choux pastry but made no comment about General Pastry Duty. I'd then have to spend another half day covering my backside with Policy before I went back to the Dutch Tax Consultant and told him Scono was a Scone and still liable to Cream Tea Duty. He always took it well, probably because we both knew he'd be back next week with another scheme.
Having said that, a lot of Foreign Tax Consultants did earn their money. I once organised a meeting at a trader's premises because we'd come to an impasse over whether their clotted cream substitute from America was taxable or not. We'd gone backwards and forwards over the various excise definitions and couldn't come to agreement. Gert, another Dutch Tax Consultant walked in. We sat down, and he said, "Why don't we phone up for a Binding Tariff Information on the product?" It turned out that - with all the focus on the Excise liability, I'd overlooked the fact that there was a Customs classification which could make it non-taxable. You normally have to get the BTI in writing, but because I was in the Department, the Customs expert at the end of the line was willing to give a verbal confirmation that the product was non-taxable."
After twenty minutes the issue was resolved! I knew I'd have to explain why I'd spent all that T&S on a meeting that could have been dealt with on the phone, but I was more gutted that I'd overlooked such a simple solution. From the way the production manager walked me to the factory gates and kept saying, "Are you sure you're all right?" I guess I must have looked suicidal. I'd certainly put the clot in clotted cream.
