Sunday, August 16, 2009

"Bereaved families hit by tax hike"

The headline I've adopted here is taken from a BBC news item. It includes reference to the ubiquitous (self proclaimed) Taxpayers' Alliance in their standard rent-a-quote guise. [Edit: NB: I seem to have some influence as the title of the article has since been revised to the more accurate: 'Bereaved face late tax fee rise'].

I suppose I shouldn't criticise the press for adopting attention grabbing headlines. I have to do the same thing to attract readers to articles on my blog and in my newsletters.

There are two points worth highlighting here though:

Firstly the article in question does not refer to a tax hike but to an interest charge on late paid inheritance tax. Despite the recent reduction in interest rates generally, HMRC will be charging 3% interest if IHT is paid more than 6 months after the death in question.

Secondly, only a very small proportion of estates are subject to inheritance tax. So I do wonder whether suggestions in a story such as this one that the "public would be angry at the changes" - are intended more as an attempt to influence public opinion. Surely that's not appropriate for the BBC.

Let me be clear, I'm not advocating increases in inheritance tax or excessive interest charges on late payments of tax. But I am in favour of more accurate headlines and reporting - both generally and especially as regards tax related issues.

In the mean time, do tell me - what do you think about the way that such stories are reported?


  1. There does seem to be a growing requirement for headline writers to have failed GCSE English - at least the Grammar, Spelling, Vocabulary and Comprehension sections!

    I also remember some years ago seeing a documentary about the BBC's fast track course for trainee Television News Editors which took the line "A fleet of ambulances rushed the injured to hospital" and pointed out that, as the audience could see the pictures, 'Ambulances' added nothing new. Ditto the fact that the collective noun for more than one is always a 'fleet'.

    It continued by asking who, apart from the crew, travelled in Ambulances (the 'injured'), in which direction did they head at such times (to 'Hospital'), and how fast did they travel when doing so ('rushed')?

    It concluded that the only information in the script was "A of the to!"


  2. The interesting thing about this story in the Telegraph and on the BBC, is the key point it doesn't tell you. That is the interest 'hike' has come about because of a change in policy.
    For as long as I can look back over the data (many years), interest has been set at the same rate for overpaid and underpaid IHT. This parity does not, and has not, applied to any other tax. However from now on overpaid IHT will attract interest at 0.5% and underpaid IHT will attract interest at 3%.
    So the question is, why was it reasonable to have the same interest rate for under and overpaid IHT before now, but not now?

  3. Thanks David.
    I'm reminded of an old joke concerning a sign proclaiming 'Fresh fish sold here'. Each and every word then being shown to be superfluous!

  4. Thanks Becky
    That's right of course. There's always a been a differential between the rate of interest paid on tax repayments and the rate charged on late paid tax - other than for IHT. My guess is that prior to this latest review no one had focused on the unduly generous(?) rules re IHT that previously applied.

  5. It was not by accident that the previous rates for IHT under/over payments were set the same. It was done through legislation enacted in the late 1980s. The latest SI has dispensed with the parity, thereby allowing interest on IHT now to observe the pattern reflected by interest on the main taxes.

    Whilst I am all for accurate commentary when it comes to tax law and practice, I don't recall you criticising Cable, Toynbee, Murphy et al for any of their rent-a-quote-bollox. Will we soon be reading your criticism of them as well ?

  6. Who can tell.
    I don't read every paper or blog and do not attempt to comment on every thing. I'm selective.