TCS Daily

More Tax Please, We're British

By Amanda Oliver - February 24, 2004 12:00 AM

It's 11:30 p.m. and I'm scrabbling about on the floor: crawling round on the carpet sifting through daunting piles of cryptic receipts, crumpled invoices and assorted scraps of paper. I comb through a chunk of credit card bills and bank statements. My spreadsheets grow inexorably. I scrutinize reams of phone call records matching numbers dialed to real-life conversations. Gas, electricity and water rate bills spread themselves out of the living room and into the hall. Phone calls go unanswered. Friends get short shrift.

All this because I have very little time left to file my taxes ... the annual deadline for the UK's self-employed is approaching and, despite vowing each year that this will be the last, the run-up to it never fails to turn ugly.

Why do I put myself through such agony? The system works on self-assessment. I could be gung ho about it and make a few reasonable sounding numbers up. But I don't. Why am I so zealous? I'm implementing voluntary servitude. I make a conscious decision to follow the rules. I'm complicit in giving the tax authorities detailed financial information and my reward for compliance is that I part company with an even higher portion of my income.

Do I play the game because, as the 16th century French commentator La Boétie says, "The essential reason why men take orders willingly is that they are born serfs and are reared as such?" La Boétie is perhaps better known as the much-lamented friend of the French philosopher Montaigne but he had very strong views on men and women consenting to their own enslavement.

Is my compliance merely a habit - stemming from the fact that I can't think for myself and don't know any different? I'd like to think not. I appear to have a high degree of mental resistance to doing my tax return or I'd handle it a good deal sooner.

Yet I'm not alone. This system wouldn't work without my consent and that of the majority of British people. There's a strong element of social pressure -- were I remiss in this, I'd be seriously castigated by friends and family for irresponsible behavior. In Britain, we follow the rules largely because we were brought up to obey the laws of the land. The self-assessment system only works because we can by and large be relied on to behave as responsible self-governing citizens. Our compliance in paying taxes is reinforced by our culture - Britain still has a distinct and highly developed sense of fair play. Friends who've moved here from the continent seldom cease to be amazed by this British trait. They say it contrasts sharply with a prevailing attitude in many cultures where flouting the rules is fine so long as you don't get caught.

Of course our system is backed up with penalties. A late return would earn me a £100 fine. And, if I were caught fiddling my taxes, there would most certainly be significant fines to pay. Yet, in the People's Republic of China there's a far stiffer deterrent to tax fraud. Major tax evasion carries the death penalty. Those found guilty are dealt with courtesy of a bullet to the back of the head.

Britons generally don't have a lot of time for embezzlers and fraudsters but neither do we seem to want them executed. But we are amazingly tolerant of gross inequities in our own taxation system. Council taxes are one arena in which fair play is woefully absent. The amount of council tax we pay bears no relation to our earnings -- it's geared solely to where we live. My work necessitates that I live in London where council taxes are cripplingly high. Each year the tax hike far outstrips inflation and we are at the mercy of the local council's spending whims.

What sort of things might my local council get up to with my money? Their track record is not great: In the late 1980s they decided it would be a good idea to boost their income by speculating on the interest rate derivatives or SWAPS market. By 1991, they'd racked up £500 million in losses. Eventually, courtesy of a House of Lords ruling, their trades were declared illegal and only a small portion of these huge losses had to be repaid, with the banks involved left to shoulder the bulk of the burden.

Britain's short-lived Poll Tax proved the point -- consent is contractual. The poll tax attempted to level the local taxation playing field by introducing a flat rate tax to be paid by every man and woman across the country. Yet here the British people refused to consent to what they saw as their own enslavement. The tax proved widely unpopular and so many people refused to pay that the government was forced to backtrack and reinstate the old system. So if we were all to stop paying income tax would that too go away? Perhaps force of habit is so powerful that we wouldn't think to stop. In any event, with this year's tax return safely filed, I have once again given consent to my own misery.

Amanda Oliver is a London based communications consultant and journalist.


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