The madness of King Gordon

I've commented a couple of times on how the Labour party just doesn't seem to understand why it has become so unpopular, as demonstrated by their failure to come up with any sensible suggestions for new policies to regain the initiative.

There's no suggestion that the higher echelons of the government have twigged the problem yet either. Take a look at this article from the Low Incomes Tax Reform Group, which is a pretty clear example of the madness which has become the stock in trade of Labour government. It tells the story of a hypothetical French student called Henri who studies in the UK and works at home in his summer holidays. Having a bit of cash to spare at the end of his hols, he buys himself a pair of new trainers to impress Les Anglaises.

At this point, Gordon Brown, or more to the point, his tax policy on non-doms steps in:

The new Finance Bill proposes that if Henri lands at Dover wearing his new trainers, he should declare that fact to HMRC and be charged to tax on their cost.

We should also add that if Henri needs to buy some books to study in the UK and uses his French debit card to buy them, he will also have to declare that to HMRC and potentially pay tax on those as well.

These are what are known in tax law as “remittances”.

Henri could declare all his income (including his earnings in France) like a UK student and avoid the charge on remittances, but that would mean completing a Self-assessment tax return, reading around 100 pages of HMRC material about double taxation agreements and residence, as well as corresponding with the French tax authorities.

Whatever he does, he is in a fix. Henri may not pay any UK tax at the end of the day; but he will probably have to spend half the year studying tax law in order to satisfy the requirements of HMRC.

If you spend six months finding out how to pay your taxes and the rest of the year earning enough money to pay them, you wonder why anyone gets out of bed at all. But these are the facts of life in Brown's Britain.