Caesar Augustus’ descendants are not, quite, untouchable.
Luke’s gospel tells us that ‘in those days, there went out a decree from Caesar Augustus, that all the world should be taxed’. Recent scholarship* casts doubt on the existence of such a decree, let alone on it having anything to do with births in stables, but it’s fair to say that the idea of taxing all the world has caught on.
In the current political climate any measures that promise to clamp down on tax planning are seen as beyond reproach, whether you are dealing with Google, Starbucks or a modest LLP converting to limited company status.
Famously, it was the US Internal Revenue Service not the FBI which got Al Capone (admittedly, for something more serious than ‘planning’) – and that was without mechanisms such as HMRC’s proposed direct access to bank accounts, or the extraordinary attempt at global reach of the US’s Foreign Account Tax Compliance Act (FATCA).
Against such apparently uncontroversial expansion of arbitrary state power, who ya gonna call? One answer that emerged at a thoroughly entertaining event organised by the Law Society’s tax law committee the other week was... the European Convention on Human Rights (ECHR).
Speaker Philip Baker QC, of Field Court Chambers, admitted that the juxtaposition does not immediately spring to mind. He recalled raising the subject with an eminent academic expert who apparently told him ‘I’m not certain that taxpayers have any rights’. Neither do tax matters seem to have been of much concern to the convention’s drafters: according to Baker the convention’s travaux preparatoires mention the subject only once.
But the convention is a living instrument and the European Court of Human Rights has heard more than 500 cases concerning tax since the 1980s. And, slowly but surely, its decisions are chipping away at assumptions that tax authorities are untouchable.
Article 1, for example - ‘peaceful enjoyment of possessions’ - has recently seen off an attempt by the Hungarian government to impose a 95% tax on retiring civil servants. Article 8 – ‘no interference by a public authority except...’ - has constrained the French authorities’ powers to search premises.
Even the fair trial provisions of article 6, which since Ferrazzini v Italy (2001) had been held not to apply to tax proceedings, are beginning to have some impact. Apparently – and here I may be grossly over-simplifying Baker’s explanation – the article is ‘pretty applicable’ to cases involving penalties. So, for a start, cases have to be completed ‘in reasonable time’ - apparently a rule of thumb is five years, from start of a case to the highest court. There is also a right to presumption of innocence, silence and, ahem, legal aid.
Baker conceded that he knew of no tax case ruling on the basis of article 2, the right to life. However, article 3, on torture, appears a promising avenue, given the activities of the tax police in certain eastern European jurisdictions. And while article 4, prohibition of forced labour, is apparently spiked by the exception of ‘normal civic obligations’, what about the compliance burden imposed by a foreign government under FATCA?
No doubt the tax law committee will continue to inform – and entertain – on such issues. But what fascinated me is the way that the Strasbourg court's rulings on tax matters are ignored by all sides in the debate over Britain’s future relationship with the ECHR, perhaps because they don’t fit pre-conceived agendas. Which, when it comes to hard facts, are generally as reliable as the Gospel According to Luke, though not so well written.
*See for example The Unauthorised Version, by Robin Lane Fox, Viking 1991.
Michael Cross is Gazette news editor