SMEs hate tax havens

SMEs hate tax havens

Treat us fairly

It was the Mars bar wot did it. A simple purchase of the delicious chocolate and toffee confectionary was enough to trigger months of misery.

My mate was self-employed. Like many, he set a certain amount of petrol spending against tax.

A little later, he had a routine tax inspection and handed over his books to HMRC. All appeared to be in order, except for one glaring problem.

He’d made a huge mistake. On one occasion, when paying for petrol he’d also bought a Mars bar. It was on the same debit card and thus on the same receipt. He’d set the Mars bar against tax. Heinous crime.

Naturally my friend apologised for his error, but that wasn’t enough. As the tax inspector put it: “If you’ve done this, we have to wonder what else you’ve done.”

Thus he was subjected to a wider investigation and more stress and uncertainty.

Nothing else untoward was found and the matter ended. The full price of the Mars bar was repaid. No taxpayers’ money was lost. The national debt was reduced.

Contrast this, if you will, with the authorities’ attitude to offshore tax havens and large corporations’ practice of shifting money round the world to lessen their tax bill.

People who take advantage ofoffshoring do not lay awake at night worrying whether they've accidentally put a box of Milk Tray on their Grand Cayman tax return.

[Lawyer’s note: nothing in this article should be interpreted as implying wrong-doing. In fact, everyone and everything referred to is lovely and law-abiding.]

The saddest thing about the Panama Papers scandal is how out of touch the tax authorities are. HMRC have been obliged to ask the BBC and The Guardian to see the documents.

By contrast it’s easy to go after foul racketeering small-fry Mars bar ne’er-do-wells. They don't have fancy lawyers or accountants.

My friend was, of course, mortified at the suggestion that he was fiddling his tax. Like most of us, he wanted to do the right thing.

We all agonise over our tax returns, checking and double checking that we are accurate. If in doubt, we err on the side of caution.

This is especially stressful for SME owners who already work long, lonely hours to keep their businesses moving and growing, creating jobs and contributing to the nation's wealth.

They are angry that another group of people takes another attitude and appear to be treated with a different set of rules. Tax is for the little people, New York hotel tycoon Leona Hemsley was once quoted as saying.

That's the bit that really rankles. That somehow by being honest, we little people are stupid. Mind you, Hensley was eventually jailed for tax offences.

Little people do not ask for leniency. They just want to be treated even-handedly and efficiently (try answering the phone for starters, HMRC).

And perhaps to be presumed innocent. Inadvertently setting a Mars bar against tax is not evidence of international criminality.

Give us a break.

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