Budget 2009 - Crikey

After more than 10 years of suffering from an annual, or even bi-annual, announcement of half baked revisions and additions to the tax code by a government that has probably proved to be more consistently inept in the field than any other in 200 years, we might, this week, get something which, for a change, might just make good sense.

Ironically, The Guardian reports that the publication of a UK register of tax defaulters is to be announced. Ironic, because, as best we can recall, in the acres of mainly rubbish produced by the Grauniad in its shrill series on tax evasion, none of their crack team of journalists and outside experts offered up such a register as a possible solution towards the non payment of taxes of which the paper complains and which, in fairness, no one sensible is saying is not an issue needing to be addressed.

The view said to be proven by the Irish experience, is that the potential downsides which come from being publicly declared to be a tax evader can have a significant deterrent effect. This, in turn, fosters a heightened sense of awareness and compliance with the law. The risk of being outed to one’s immediate circles can prove to be very effective, especially when it can come with negative commercial repercussions. The sanction can, therefore, achieve far more in terms of results than the advancing of any moral argument. Rightly or wrongly, this a facet of human nature which we regularly encounter when representing individuals and their companies who are under investigation for civil tax fraud; where concerns over the minimisation of reputational damage often inspire the recalcitrant in their co-operation with both their advisers and the Revenue.

We will have to see if and how this takes shape, and when such a register might be introduced. We suppose that it would be best introduced after the announcement of one, or more, amnesties or similar initiatives where, as in Ireland, those taxpayers availing themselves of the initiative and voluntarily disclosing their past non-compliance will exempt themselves from inclusion on the public register.

Most importantly, in the longer term, and where such a public register might have its biggest value, is that, in heightening the burden on its citizens, the public might then have more cause to question its government, of whatever stripe, and the quality of the tax law it makes.