Q. Does Mr Hartnett believe that the 50 per cent tax rate will result in higher or lower tax revenues? If not, how does he square this with empirical evidence that supports the Laffer curve.

Robert Moore, London

Robert,

HMRC’s role is to collect the right taxes at the right time. If there are attempts to avoid the proper rate of tax and these appear to work technically — and frankly most of them don’t — we will draw this to the attention of Ministers so that they can consider legislative change. I would rather wait for more evidence rather than speculate about future revenue flows.

Q. What is HMRC doing to help UK businesses grow and be competitive versus competition overseas?

Tim Potter, Manchester

Tim,

We administer Research and Development tax credits to support technical and scientific research and to help UK businesses undertake vital research and innovation. There are also specific tax breaks to support the film industry. We have a positive commitment to spend less time enquiring into those businesses that have a proven track record for good compliance. We are also very proud of the way we have fast tracked time-to-pay arrangements for those businesses experiencing temporary difficulties in meeting their tax obligations.

Q. Why do tax codes presume that last year's arrangements apply next year as well, even if you have been told in advance that they do not? I was told that the “new” system for issuing tax codes cannot take account of notes and information provided on tax returns. Why not? This leads to inflated tax codes putting the onus on taxpayers to tell you twice about your error — once on their tax returns before the tax code is issued and again afterwards to correct it.

David Crawley, London

David,

We update tax codes using the latest information available to us. This may be from information supplied by the taxpayer or by their employer about income or company benefits received in an earlier year, or it may be information supplied in the customer's self-assessment tax return. However, information may be incapable of being processed in some cases, for example if the relevant entries in the return are not clear.

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