Sometimes I despair of government.This is not a party-political
point, just the uninformed observation of a humble citizen who
marvels at how with all those resources, clever people and
committees, the government can still manage to mess things up.
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This month’s example concerns the Assets Recovery Agency,which
was set up to seize criminals’ illgotten gains.The Commons Public
Accounts Committee has just announced that the Agency’s launch was
illplanned and its goals unrealistic.Worse, it has spent three
times as much as it has recovered! So rather than hurting the
criminals it has hurt the victims; those law-abiding citizens,who
have had to pay yet again, through taxation.
In my previous job as an accountant, I learned that Adam Smith,
the famed 18th century economist, said that four principles should
underlie all taxation.These were that tax should be fair, cheap to
calculate, cheap to collect and certain.He called these his four
Canons of Taxation and they have been basic stuff for every
economist and accountant ever since.Two hundred years on most
fair-minded people would agree that these four principles should be
at the heart of the way governments levy taxes.
If you are wondering why you have read this far and not yet seen
anything to do with leasing or fleet management, bear with me dear
reader. I want to focus on that word “certain”. Adam Smith said
that the taxpayer needed to be able to plan his affairs in the full
and certain knowledge of the tax consequences.To be fair,
governments in recent years have done more than in the past by
giving company car drivers and fleet managers advance notice of
changes in the system. But the fleet-related announcements in the
chancellor’s pre-budget report must surely fit into the category of
“what the heck do they think they are playing at?”
The fleet industry has been waiting far too long for three big
decisions from the government; the future of Employee Car Ownership
Schemes, the outcome of the review of AMAPs and changes to the
business car capital allowance regime.
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By GlobalDataI have used this column before to write about Employee Car
Ownership Schemes.These account for something between 100,000 and
200,000 vehicles and a lengthy review of these schemes by the HMRC
has delivered the verdict.The government has decided not to
interfere with these schemes.Two cheers for the government.
But there will be no cheers from fleet managers and lessors who
were expecting a decision on the other two pressing business car
tax issues – the level of Approved Mileage Allowance Payments
(AMAPs) and the future treatment of capital allowances. No decision
will be announced until next spring’s budget.These issues have been
sitting on someone’s intray in Whitehall for far too long. This
continuing uncertainty is interfering with business
decision-making.
Colin Tourick MSc FCA FCCA
MICFM,www.tourick.com
