Julian Knight: The Carr affair is a symptom of a failing system

  • @ukmoneyguru

For me Jimmy Carr's comedy performance in the Jubilee concert was a far greater crime against this nation than perfectly legally avoiding tax. But nevertheless the spectacle of the acerbic Carr being caught out does satisfy this week's quota of schadenfreude.

There is a lot of noise at the moment about tax loopholes and HM Revenue & Customs' "crackdowns" but the reality is practically nothing is being done to make even the merest dent in the budget deficit. I'm forever receiving releases from HM Revenue saying they are getting tough with this group or that. There was even one the other day saying HMRC was targeting landlords in Peterbourgh. What next, kebab shop owners in Wolverhampton?

Like in the film Jurassic Park when the T-Rex (sad to say that film is my sum knowledge of palaeontology) bellows to get its prey to move, HMRC is doing the same thing, shouting to get people to own up to unpaid tax.

How do I know that? Well the HMRC has simply far too much on its plate. It is creaking under some of the most complex tax rules in the world (thanks to Gordon Brown and Ed Balls) and senior accountants have been warning me that a potential systemic failure is in the offing. In other words the tax code system which we all rely on could break.

If the Government is really serious about stopping the likes of Jimmy Carr – but not Sir Philip Green it seems – then we need to scrap and simplify a lot of tax law in order to have more effective tax enforcement. When it comes to tax, quite literally, less is more.

The power of Twitter

I don't need an Arab Spring or a busted super-injunction to reveal to me the power of Twitter. I use it all the time when trying to broaden my range of contacts.

Sending out a tweet on a particular subject is a great way to find new opinions and people who have first-hand experiences.

This week I asked for the Twitter-sphere's views on shared ownership (see page 94 for more). The usual trickle of commentators came back offering their views and numbers to call. The PRs of a few lenders came back with their in-house (pardon the pun) experts on shared ownership. But from the public the trickle turned into a flood and all the comments were negative and these, crucially, were people who have taken part in shared ownership.

People's gripes were over inability to re-mortgage, expensive mechanisms for selling on their property or for buying a bigger share, rents going up at rates far higher than wages (one tweeter said he thought buying into shared ownership he was "escaping a grasping landlord but not the case and I have to pay all the repair bills") and management charges going up and up.

But the overwhelming sentiment was anger and disappointment at housing associations. Now as a former tenant of a housing association what these tweeters had to say rung true. Bureaucratic in the extreme – in my five years dealing with one I never spoke to the same person twice, normally due to sickness absence – terrible communication, milking homeowners through rent and extortionate service charges.

These third-sector housing providers went hell for leather to draw people into shared ownership – which in most instances looks a rank bad deal – and then lived off the proceeds.

Just because an organisation is not-for-profit doesn't mean it is worthwhile or that it offers a good service – in fact quite the opposite is usually true.

Twitter has revealed a groundswell of very disappointed part-owners. If we were looking at a financial product here rather than bricks and mortar the whole shared ownership schemes issue could be seen as mis-selling, with the housing associations playing the role of the grubby commission-earning sales team.