And now the budget

There is a lot of press coverage of the budget, but so much of what was said is just words. Changes planned to come in later this year will only happen if Labour is re-elected with a majority. The polls suggest this will not happen, so most of what is said and written is just hot air.

Of course some of the changes are more immediate - stamp duty and excise duties (betting, fuel and alcohol) - so we will see these.

Is it worth commenting on the others? Probably not.

The most important question is whether the problem with the economy is going to be dealt with in the right way and it is almost impossible to tell.

• In theory we need to cut back on public spending and increase taxes to give the rest of the world confidence that the borrowing will be reduced.
  
• In theory we need to maintain spending otherwise the economy will slow down, tax receipts will fall further and the borrowing will, as a result, increase.
  
• Which means that the answer is a mix of both - cutting and maintaining.
  

Will the government get the answer right? Probably not.

But on the other hand, we will not know as we cannot go back and try something different. All we can do is make sure we have the best people in government that we can find.

Legal decent and honest

The accountancy press (accountancy age) has just told us that our own Revenue service (HMRC) has now obtained information from an illegal source and will be using it to try and track down tax evaders who have Swiss accounts. They did the same with some Lichtenstein information last year.

Apart from questions about the admissibility of any such information in court (I think the Police and Criminal Evidence Act ("PACE") makes life difficult for police officers by making sure they only use information they obtain using the proper procedures), there is surely the question of whether this sort of evidence should be used by the government at all.

By contrast we are shocked and horrified that information about terrorism obtained by America might have been obtained illegally using torture.

It is clear that, if HMRC were in business, it could not have a tax deduction for the costs (ITTOIA 2005, s. 55(1)(a)). Equally, if the recipient (thief) is taxable in the UK, the receipt by him is a taxable receipt (have a look at the Revenue Law journal). This indicates that tax law is not sure how best to deal with illegal acts. But surely there should be a standard (similar to PACE) which the government should follow when chasing tax debts.

After all (and it has been said), buying this sort of information only encourages thieves to go out and steal it, something which our government would surely condemn as illegal.