The Squeaking of the Pips

Rather worrying for many people is this latest report into the ongoing heavy handedness of HMRC. They are increasingly picking on professionals, people living in the South East and the self-employed to investigate. It seems from the Telegraph's FOI request that they are looking at over 100,000 people extra per annum.

Mainly thanks to their fancy new computer system, Connect. My worry is that Connect actually allows the fishing expeditions that the Government and Revenue say are illegal. After all they get bank statements and Land Registry information, decide that a person cannot afford their house purchase and then begin an investigation.

How is that not a fishing expedition?

I am not sat here saying people should not pay tax; after all I personally handover eye-watering sums PAYE every month. Still once a year I get asked for more for some spurious reason post handing in a self-assessment form; it always feels like a stick-up as the process and reasoning are Byzantine but failure to comply ends in a court summons and CCJ in short order.

What to make of this in the medium term though, HMRC is desperate for revenues now, what is it going to be like in the UK after the next election? The Government will be very short of money and stuck with a massive structural deficit that will require big tax rises and a larger tax take from the taxpayers.

But I fear that as you try to make the pips squeak as Labour and Conservatives are want to do, you drive away the desire for wealth creation. After all, if you can't hold on to it what was the point? The situation, for doubters, is similar to pensions today - with the State pension much safer, albeit a lower level, than the Private sector pensions which have been taxed to death, people are saving LESS for their retirement and pushing the burden more onto the state - which can be seen in our deteriorating public finance and vast increases in pensions payments over the past 4 years.

I don't know where this ends, but the future is not rosy for taxpayers or the Government.

Europe's Commissioned failings

We all know when we have got under someone else's skin. The barbs comes forth, the anger heightens, faces redden and ludicrous accusations are made. One only has to watch say Nick Clegg debate with Nigel Farage to see in live action how this works.

With the EU the attack is the same, but of course faceless, matching the EU's preferred method of Governance. The recent elections presented the EU with a choice, with Centre-Right parties being the biggest leaders in the Parliament they came up with a wheeze to 'select' (i.e. no elect) a right-wing leader. Being the EU it watches the 'Managed Deomcracy' of Russia and China's political management and decided that a Federalist candidate should be found for both right and left, to ensure the 'correct' person was selected.

Thus we have the name Jean-Claude Junker to look forward to as President of Europe. the only small consolation being how much it must annoy Tony Blair, so craven in handing over the UK rebate and yet never to get his bauble.

Our valiant Prime Minister has had words with Chancellor Merkel about this stitch up and she has ignored him. Quite right too, the Eurozone is dead without fiscal union and fiscal union requires closer political union. The only way to do this is more Federalism - so Merkel is quite right to back her candidate to progress this.

Then the Commission gets involved with a set of recommendations for 2014 macroeconomic policy recommendations. They are for every Country but the UK's ones are more overly political than most. Effectively the UK Government is criticised for a number of flagship programmes and changes rather than for its overall position. For example, much is made of the minimal support Help to Buy has made and for the introduction of Universal Credit.

This is how the EU strikes with its faceless bureaucrats. Having said that we should not forget the chilling overall picture of the UK economic position. Debt has doubled since 2007. The deficit is still above 6% even though we are into a second year of recovery - tax rises recommend by the Commission are perhaps the wrong answer to the right questions. The UK is utterly unprepared for next recession which could occur from the end of 2015 onwards. The Country could not cope with a new recession when the deficit was already high and national debt was near 100% of GDP.

The UK desperate needs to reduce Government spend and the cost of doing business and increasingly I see leaving the EU as a way of doing this in the long-term. They have made it quite clear that Britain is not necessary for them now in any event.