Terence Blacker: An attack on the lives of artists and writers

Behind this brutal new initiative there lies cynicism and ignorance, in more or less equal portions
Click to follow
The Independent Online

At first glance, the idea of imposing a bling tax would seem to be rather sensible. Its aim, according to early reports, is to stop the rich and the famous indulging themselves with expensive fripperies which they then put down as tax-deductible business expenses. Richard Madeley and Judy Finnigan, the master and mistress of the tea-time interview on Channel 4, have been hauled into the tax-office star-chamber for a test case - in this instance, for writing off the costs of employing agents - which could cost them hundreds of thousands of pounds, since the ruling is likely to be retroactive.

Beyond the offices of the grander type of accountant, few tears will be shed. Newspapers have pointed out that the famous and well-advised can currently claim that sports cars, clothes, tattoos, facelifts and jewellery contribute to their careers as public figures. Most people will find that a bit of a liberty. Nothing is more likely to cause a lurch of resentment in the stomach of the average Englishman than the idea of undeserved "perks", the thought that someone somewhere is getting away with something they should not be.

When, as in this case, the offender is extremely rich and the person who loses out is the poor old taxpayer, then this would seem to be that rare thing, a tax initiative which wins votes. The fact that TV's smuggest couple are first in the firing line will add to the joy of the occasion.

But, as is so often the case, what appears to be an easy crowd-pleaser of an idea turns out to be something altogether more ambiguous. Under Gordon Brown's beady stewardship, the Treasury has been fighting back against the brilliant, money-minded professionals whose every waking moment is spent in discovering new and original ways of avoiding tax.

Claiming that between £97bn and £150bn slip through tax loopholes every year, the tax office has gone on the offensive. Trusts, set up to avoid inheritance tax, have been identified and nailed. Banks have been forced to reveal details of British offshore account-holders. In a particularly impressive piece of work, it has been established in law that if a tax law is reinterpreted today, a retrospective claim can be put in, covering the past six years.

The result of their latest effort is extremely odd. Among the perks that have excited the press - Rolex watches and so on - has been included something far more important and controversial. The percentage removed to pay an agent who has acted on the taxpayer's behalf is also to be deemed taxable. "The Revenue believes that the law only allows actors, singers, musicians and dancers to claim that agents are a legitimate business expense," a Treasury spokesman is reported as saying. "Therefore, it is seeking to recover tax from other entertainers, sportsmen, authors and anyone else who has written off the expense of their agents."

I had to read this statement twice before its full idiocy - and, I admit, personal implication - sunk into my brain. It seems that, so far as the Treasury is concerned, a non-performing freelance whose work is sold by an agent is not spending the 10 or 15 per cent of the income accrued as a necessary investment, a way of staying afloat. It is not a legitimate expense, but a perk.

Cunningly, the Treasury is to test this idea against a high-profile couple, knowing that only Richard and Judy's most devoted fans will be upset if they lose. Inevitably, the celebrity-crazed media have concentrated upon the very people who need to worry least about this development. "It could affect thousands of names, Such as JK Rowling, the author, Jamie Oliver, the television chef, and Frank Lampard and Michael Owen, the footballers,"" it was reported in one name-dropping newspaper.

More to the point is the fact that the Treasury is about to deal a terrible blow to the paltry incomes of freelances who are neither famous nor rich. For a writer, having an agent is not a perk: it is an essential part of surviving in a large, rough industry where there is little or no place for the small and unrepresented.

Like a lame-brain celebrity correspondent in the tabloid press, those in the Treasury might see the millionaire JK Rowling as a typical author. The truth is duller: most freelances struggle to survive. A tax demand on income that they never see, since it has been deducted by their agents, will be a harsh blow. If it is introduced retrospectively, many of them will be in serious trouble. On the radio yesterday, Gordon Brown refused to comment on particular tax matters, but trotted out in his normal dreary way the New Labour mantra about the importance of creative industries. It is all utterly bogus. Behind this brutal new initiative, there lies, in more or less equal portions, cynicism and ignorance. Lacking the political courage to raise taxes on the super-rich in the conventional way, he has introduced a stunt which, far from hitting the privileged, will have its most serious effect on impoverished freelances.

In a way, the ignorance is more alarming. This is a government of suits. Its members play lip-service to creativity while invariably misunderstanding it and doing it a disservice. The life of aspiring musicians was made incomparably tougher by the Licensing Act. Now, while the media prattles on about celebrity perks, the lives of writers, artists and designers will be made more precarious than ever.