Tax and the supergrass generation

HM Revenue & Customs (HMRC) recently proposed that as part of their citizenship studies children should study a module about the ‘tax responsibilities of a good citizen’. Few would argue against teaching children about societal values, public spending and the role of tax in this, but the module goes a bit further than that.

After engaging students in a conversation about why people pay tax, children are then asked “why do people try not to pay?” and “what do students think of those who refuse to pay tax or try to defraud the benefit system?”

What has been exercising the media and teachers is one seemingly innocuous question in the tax module: “Can [children] think of any examples they may have heard of in their local area?”

Methods of tax collection in the UK have changed over the years. The modern system effectively outsources most tax collection. Employers deduct income tax under PAYE. The self-employed and companies do their own tax collecting under self-assessment, and even banks have been asked to give up some information to HMRC. The concern is that children and their teachers may be being asked to participate in this outsourcing.

Taxpayers are engaged with the tax system. It is a fact of life for them. But if people feel children are being asked to ‘grass’ on them, their families or neighbours (for infractions of a system so complex it needs an Office of Tax Simplification) it is not hard to see why there are concerns. This assumes they can distinguish avoidance from evasion, which even our legislators struggle with.

One would hope that teachers presented with this module adopt a sensible approach and skip past the question quickly. If they do not they will be faced with a dilemma. If a child gives an example of a suspected tax crime to the teacher, the teacher has two choices. They could do nothing. But what does that teach the child about teachers and tax evasion? Or they could report it as they would do if they were told, for example, about a theft. In this case, aside from the fact that HMRC may place little credibility on a child’s evidence, there are wider issues.

Imagine: little Jonny comes home from school to his benefit cheat parents who ask what he learnt in school today. One can only imagine their reaction when it transpires that teacher asked Jonny to tell them if he knows any benefit cheats or anyone who does not pay their taxes. The Government has a stated aim of helping families on the fringe of society. This seems to be at odds with that approach.

I am sure HMRC never intended this module to assist tax collection, but perception is everything. Whether this is creating child ‘state spies’ or is good ‘moral guidance’ depends on how you look at it. Few people – except perhaps the unenthusiastic children at the back of the class – would argue against a factual discussion of tax.

However, most people would not want to feel their children could snoop on their private financial affairs and report this to their school. It may not only put parents and children in a difficult position – teachers too may prefer the HMRC questions to be seen but the answers not heard.