Andy Silvester: Tax powers that defy spirit of Magna Carta

Cast your mind further back, and you’ll also find that it’s 800 years since the signing of Magna Carta. An agreement to end a particularly bad-blooded civil war, the charter was more wide-ranging than it is given credit for. It approved tax breaks for the aristocracy, essentially exempted the City of London from any sort of regulation and – interestingly – devolved control over transport to what could loosely be described as the unelected local authorities of the time.

But most importantly and fundamentally, the Charter guaranteed the primacy of the individual over the state, of justice over the monarchy. In 1215 this provision very much referred to certain individuals, admittedly, but the principle remains important. “No free man is to be arrested, or imprisoned… or outlawed, or exiled, or in any other way ruined, nor will we go against him or send against him, except by the lawful judgement of his peers or by the law of the land.”

That basic principle – of access to justice, a trial of peers – has underpinned the legal system in Britain and in democracies abroad for 800 years. Yet the most important element of the document – that property rights can only be seized, or appropriated, or removed, after a judicial ruling – is under threat.

New powers announced in the last Parliament and being brought forward in this one will allow the Government to take money directly from an individual’s bank account if HMRC – Her Majesty’s Revenue & Customs – desires . So called “Direct Recovery” powers give HMRC the power of judge, jury and indeed executioner; a direct challenge 
to the principles laid down in Magna Carta.

A legal briefing published this week by the TaxPayers’ Alliance, written by leading barrister Francis Hoar, shows that quite apart from the principled objections one may have to such legislation, the draft documents being put forward by the Government are inherently flawed.

There is a serious risk that HMRC would be able to freeze an individual’s assets, take sums from an individual’s bank accounts, or leave a business vulnerable for bankruptcy without the possibility of appeal.

The legislation sees HMRC able to claim a debt owed from an individual, and issue a notice to ensure that debt was recovered. In the interim, HMRC would be able to place a “hold notice” which would freeze an individual’s (or a business’s) assets for an indeterminate period of time.

Throughout this period, HMRC would be under no obligation to respond to an appeal. Essentially, an individual’s assets could be seized without a court judgement; Magna Carta be damned.

Let’s be clear: tax evasion is illegal. Where the authorities find it, it should be punished accordingly and the money owed recovered.

But that is no reason to circumvent the principles of Magna Carta to do so. And that is without questioning whether HMRC – of all the government agencies – should be given such draconian powers. Last year, the organisation got 5.5 million tax bills wrong. Giving such an error-prone organisation the power to seize funds without legal recourse is a disaster in principle and in practice.

It may sound hyperbolic to compare the tyrannical nature of King John with the taxman, and in a sense it is. But the basic tenet that an individual should have the right to a hearing, a judge, and fair treatment according to the law of the land, is one that we must treat with great care. Make no mistake: these Direct Recovery powers are the start of a slippery slope.

David Cameron said, at the Magna Carta anniversary, that the principles of the document “shine as brightly as ever, in every courrtoom and every classroom, from palace to Parliament to parish church”. This Government mustn’t block some of that light.

Andy Silvester is campaign director at The TaxPayers’ Alliance.