Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.
Contrary to what the politicians would have us believe, the state very much favours tax avoidance (until, that is, its avoidance measures enter the public domain).
"Two Government departments have been fined and
100 NHS bosses and civil servants have been fired after the Treasury
discovered that staff were being paid “off the books” through companies.
Danny Alexander, the Chief
Secretary to the Treasury, fined the Ministry of Defence and the
Department of Health a total of £1.5million after it emerged that they
were not doing enough to stop staff being paid through companies and
potentially reducing their tax bills."
Quel surprise!
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
On Sunday I noted that Accountancy Age,
on the very same day as my article about Dearnley, wrote about
outsourced tax credit Concentrix staff in Belfast being paid millions
(approx £72M) to do nothing for three months as a result of a systemic
HMRC IT failure.
Concentrix were tasked with checking up on erroneous or fraudulent UK working tax credit payments.
Clearly worried over the time wasted, Concentrix are now applying themselves with gusto to the task and have gone for a spot of fishing. As per the Independent:
"When Mary Folwell got a letter from HM Revenue & Customs last
month, she put it to one side assuming it was just a standard reminder
that her tax credits would be renewed.
When she got round to opening it, she had a shock. It was actually
from an HMRC-appointed agency named Concentrix – and it accused her of
living with someone and threatened that unless she could prove
otherwise, her tax credits would be stopped within 30 days.
"It
said they had evidence to suggest that I was living with someone, which
sent me off into panic mode," Mary, a 55-year- old pre-school teacher in
Bristol, told me. "I separated from my husband two years earlier and
had moved into a small flat on my own. There really has never been
anyone else here."
The letter threatened that if Concentrix did
not hear from her by 24 February, "we will stop your tax credit". "I
only get £15 a week," explained Mary – "which may not seem much but it's
crucial to my budget. If I lost that money, I would really struggle."
She's
not alone. Tens of thousands of people – mainly single mothers, it
seems – have been targeted with similarly bullying letters. The letters
are not only frightening, but their demands are needlessly onerous. In
short they demand that people supply almost all their personal details
to prove some spurious suspicions that HMRC may have. Failure to do so
within a couple of weeks means losing out on essential cash for which
they are eligible."
This is corroborated by a loyal reader, who commented yesterday regarding postal delays:
"......and better.......have heard that working tax credit disputed
overpayments post is so far behind that they are starting to send out
"shortened" response letters not explaining anything but just telling
the taxpayer to pay up.
Quality customer service !!"
Low hanging fruit are the easiest to pick, especially when using the tactic of guilty until proven innocent!
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
In November 2014 I quoted Ed McKeegan (Director of HMRC Estates and Support Services) extolling the benefits of HMRC's "digital" postal procedures (as he announced the closure of various post rooms):
"HMRC's digital transformation is improving the service we offer our
customers, and post handling is now at the forefront of those changes
with the introduction of post scanning by Personal Tax (PT), which
contributes around 70 per cent of RPR work. For PT, the introduction of
post scanning means they can reply to customers more quickly, with the
ability to send post to any desktop, in any office, in an instant we
won't need to spend time sorting or transporting it."
Fast forward to March 2015, and a loyal reader advises me that all is not well in HMRC's brave new world of "digital" post handling.
I understand that hardly any post is getting worked in PT Operations.
For why?
Apparently so many offices
are now flex sites, that the staff are on the
phones all the time. Thus, for instance, letters dated September are only now being answered.
The scanned post is all waiting to be processed and dealt with, but staff are
on the phones instead.
Late self-assessment tax returns, many of which have been sent back for
correction, have been logged in as received in December, but the
figures are still not captured. Therefore no statements have been produced, and taxpayers wanting to pay can not be given an accurate amount. There
are various work lists with thousands and thousands of items on them.
I am advised that there
is a tool that telephone staff can click on to get an estimate of when
a taxpayer will receive a reply to any correspondence they have sent
in. Why not try ringing up (general information will be given without taxpayer
details, just ignore the automated questions) and ask about a
fictitious letter you posted in December, and see what the reply is!!!!
Thus my question is this, if most of PT Operations are now Flex sites and staff are always on the phones, who is left to actually to deal with the mail?
Answers anyone?
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
My thanks to the loyal reader who penned this most excellent analysis about Dearnley and the "binary revolution" in HMRC:
"Dearnley is a probably being economical with the actualité like so many members of HMRC’s Ex Com.
The
constant shouting of the word 'Digital' to describe their IT strategy
should immediately ring alarm bells since by their very nature all the
Departments computers have been digital (ie using binary compiled code)
since the date the Inland Revenue bought their very first LEO machine
second hand from Joe Lyons in the 1960s. As a consequence the Revenue
could claim to have digitised most of its work decades ago. It would be
nice to see such obvious bullshit occasionally challenged at places like
PAC. More seriously, while Dearnley frequently likes to boast about his speedy roll out of Windows 7 to all HMRC desktops he negelects to mention that in
the process it has broken loads of applications, created many problems
and generated thousands of lost man hours of work
With regard to
the problem of 'legacy' systems Dearnley seems to fail to understand or
deliberately ignores the basic issue that all IT applications fall into
that category the moment they hit the live metal and start running in
anger. It does not matter whether they are 5 minutes old or 5 years old
they all have to be maintained and they all face the issue that the
software and hardware on which they were designed and run is sooner or
later out of date. Moreover, political events and changes to legislation
will mean the functionality is going to have to be constantly updated
and enhanced.
It is certainly true that HMRC over the years has
wound up with a huge IT estate running a wide range of different
platforms, operating systems and applications. However, the people
largely responsible for that situation are not the Revenues IT suppliers
but the Board of HMRC itself, including individual like Dearnley and
Pavitt who have constantly changed the core IT strategy. For example, a
few years ago the mantra coming out of Ex Com was that HMRC was to buy
not build its software so they invested massively in various proprietary
COTS packages, many of which were costly and often incompatible with
the Revenues needs so had to be expensively customised. Now the pendulum
has swung completely the opposite way and HMRC now are betting the
whole shooting match on Open Source systems and bespoke applications
written in house. That punt may come off but it is a very high risk
strategy particularly as much of the software being used is largely
untried and unproven for running major government systems and the in
house HMRC 'Digital' Teams in Newcastle and elsewhere have no experience
of delivering and supporting systems on that scale. In addition, there
is the very real worry that Dearnley appears to be funding his
ambitions by stripping out investment in maintaining and supporting the
existing legacy estate which still runs 99% of HMRC systems. If his
grand schemes come to nothing then the Revenue could end up with the
worst of all worlds with new systems not fit for purpose and old
applications needing costly large scale upgrades to keep them running.
The
suspicion is that Dearnley who spent a mere three years at Vodafone
before cutting and running to HMRC in 2013 will do exactly the same
thing to the Revenue when his contract expires in 2016. Unfortunately,
by then HMRC may find its IT has been well and truly scuppered."
Ironically Accountancy Age, on the very same day as my article about Dearnley, wrote about outsourced tax credit Concentrix staff in Belfast being paid millions (approx £72M) to do nothing for three months as a result of a systemic HMRC IT failure.
Let us trust that Dearnley (if he is actually competent) doesn't regard this as merely a two/three year stepping stone role on his career path.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
Mark Dearnley, CIO of HMRC, recently gave an interview to CIO which was rather revealing.
He joined from Vodafone (there's irony for you) in 2013, and described his role as "nothing short of transforming a centuries-old organisation into a digital, modern, real time business".
Errmmm, HMRC is not centuries old; it was formed by Broon in 2005!
Anyhoo, that little snafu aside, Dearnley acknowledges the challenge presented by legacy systems, a
long-standing issue for HMRC IT chiefs. He says he would like to
consolidate tax systems from over 100 to "one or two".
Yet he regards the platforms used by HMRC as being fine, and rejects the idea they are somehow "bad platforms".
"This nation has survived and brought in trillions of pounds worth of tax on these platforms."
Yes, but just because something once worked it may no longer be fit for purpose now; given that people's working patterns have changed (eg multiple sources of income).
In fact he appears to be enamoured with batch processing:
"Is real-time brilliant and batch terrible?
That's the wrong question.
There are things for which batch is fine.
There are other things where
you need real-time updates."
He intends to cobble together old and new:
"Some of that will use things that are new. Some of that will take
advantage of some of the great things that have been developed over the
years.
There's no 'oh it's not new so it must be bad' - there's actually 'if it's ideal for the role let's build on it'.
He is also of the view that he has more than other Whitehall departments:
"Most people underestimate how much talent we have within HMRC.
It would appear we actually have more than some other parts of
government.
I have thousands of civil servants. We already run all of the
platforms that collect 40% of the UK's tax. And I've managed to create
what I think is quite a fantastic leadership team."
He waxed lyrical about the new team in Newcastle, which has moved tax credits renewals online in just eight weeks in start to
finish Dearnley claims.
"We set up a Scrum team and said: 'Go and see what you can do, you've
got eight weeks'. They built a complete tax credits renewals service in
eight weeks from start to finish, and we integrated it in real time to
all the back-end systems.
That went live in eight weeks. We thought if it went really well,
maybe 80,000 people would use it during renewals – 410,000 people used
it. I think we had about a 94% customer satisfaction rate, which is
absolutely phenomenal."
Hmm, what say you loyal readers?
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
PAC had a busy day yesterday, having a wee chat with the "great and the good" of both HSBC and HMRC.
HSBC chief executive Stuart Gulliver apologised to MPs for "unacceptable" practices at HSBC's Swiss subsidiary. Alongside Gulliver was HSBC chairman Douglas Flint.
Gulliver also defended his personal decision to be paid
by the bank via a Panamanian company with an account in the Swiss
private bank, insisting that the arrangement was not designed to avoid
tax, but to protect his privacy against other members of staff who were
able to view employees' accounts via the company computer system.
"There was no tax advantage or purpose
whatsoever.
I would like
to put on the record an apology from both myself and Douglas for the
unacceptable events that took place at our private bank in Switzerland
in the mid-2000s. It is an apology we would like to make to you, our
customers, our shareholders and the public at large.
It clearly was unacceptable. We very much regret this, and it has damaged HSBC's reputation."
Asked precisely what he was apologising for, Gulliver said:
"The
lack of controls and practices which now - judged with the benefit of
hindsight - we would not be at all comfortable with if they were
happening today, and which have clearly resulted in damage to trust and
confidence in HSBC and created further reputational damage to our firm
and have therefore hurt clients, customers, shareholders, our staff and
people at large."
Flint told the Treasury select committee that he blamed
the failings at the Swiss unit on its management, and said secrecy
surrounding banking in the country made it difficult for him to have a
direct line of sight of what has happening at the bank (funny way to run a bank!).
Chairman of the bank since the end of 2010, Flint was finance director at the time the Swiss subsidiary was purchased by HSBC.
Homer, for her part, admitted that she is concerned by the perception that HMRC is soft on the rich and tough on the poor. The fact is that low hanging fruit, unprotected by lawyers and tax professionals, are an easy target for HMRC.
John Mann asked her:
"What would you do if you discovered any parliamentarians were dodging tax?"
Lin Homer replied that she’d have to check “whether I had an
obligation, or an ability, to refer” them to the parliamentary
authorities.
She went on to assure PAC that where there are people in positions of responsibility, HMRC does act.
Homer repeated that HMRC doesn’t expect a ‘waterfall’ of new
prosecutions, even though it can now share the Swiss data with other agencies.
Homer denied that Hartnett has any inside information on HSBC’s Swiss bank, or HMRC’s systems etc etc.
So everything is basically fine, nothing to see here move along please!
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
