Businessmen take the HMRC hit but democracy is the biggest loser
What price democracy? The HMRC is hitting businessmen who bankrolled the referendum campaign, by taxing their donations.
It’s true that both campaigns are affected, but while Remain received a lot of cash from public organisations, which are unaffected by the HMRC’S rules, Leave relied far more on individual entrepreneurs – so Eurosceptics will probably foot the larger bill.
Some of them will conclude that it’s a stitch-up with plausible deniability artfully attached.
A comparison that springs to mind is the 2013 tax targeting controversy in the United States.
The Internal Revenue Service, which operates with a bureaucratic terror worthy of the Soviet Union, admitted that it had scrutinised groups applying for tax-exempt status on the basis of their politics: groups with the words “Tea Party” or “constitution” in the title could be subject to delays or intrusive questioning.
At first, the scandal was political: conservatives called it a witch-hunt. Later, as it emerged that progressive groups had been targeted too, it became obvious that the IRS was simply incompetent.
In the case of the HMRC, many Eurosceptics who have received mammoth tax demands will doubtless
Britain’s political elite overwhelmingly opposed Brexit, so the campaign had to be privately financed
say it’s part of a wider picture of post-referendum retribution. Big name Remain supporters – who, lest we forget, actually lost – received government jobs, honours and were treated like the gallant heroes of a lost cause. Many Leavers got nothing.
Nigel Farage has spoken of being landed with expenses and abuse: he would do it all over again, but the personal cost was enormous.
And the worst thing about this tax raid is that it will probably put more people off taking those kind of risks.
The EU referendum was not a normal party political campaign, in which donations to parties are tax-exempt. Britain’s political elite overwhelmingly opposed Brexit, so the campaign had to be privately financed and had to be run outside of normal party structures.
The fact that it still won, against incredible odds, gives that effort moral credibility. The fact that the HMRC then slaps a massive bill on the men and women who fought for it is an insult to the democratic will of the public and will have a chilling effect on any future referendum.
Many potential donors and activists will infer that the system is stacked against them. Unless you’re pushing for something that the parties, the unions, big business and lobbyists approve of – don’t associate yourself with a cause that could leave you personally liable.
At the very least, the HMRC should recognise that Vote Leave and Britain Stronger in Europe were official campaigns in the referendum and, therefore, functioned with comparable status to a party in a regular election.
Even if it cares nothing for democracy, even if it isn’t bothered about bruising the egos of a few Eurosceptics, the HMRC ought at least to care about its own reputation.