HMRC felt MPs' fists of fury last week over the recently announced bonuses to be paid to senior HMRC staff.
The bonuses went up by an average of 60% during the year. This was in spite of the fact that HMRC is in meltdown; complaints about tax credits have risen, VAT processing targets have been missed and personal data belonging to 25 million people was lost.
The Treasury Select Committee said that the payments were "completely unjustified".
Michael Fallon, who headed the probe, said:
"Sadly in some areas, such as the Value for Money Delivery Agreements, we have found them failing to lead by example.
If they can't get this right, how can any other department be expected to?"
Shadow chief secretary to the Treasury Philip Hammond waded in as well:
"From the tax credit chaos, to the missed targets, to the lavish bonuses paid to HMRC staff, it is clear that the chancellor (Alistair Darling) and his predecessor, Gordon Brown, have failed to deliver competent leadership."
The coup de grace was wielded by Liberal Democrat Treasury spokesman Vince Cable:
"It is clear that the days of prudence in the Treasury are well and truly over.
With millions of personal records lost, a tax credit system in chaos and the debacle of Northern Rock, why on earth does the Treasury think it is appropriate to increase staff bonuses by 60%?"
However, HMRC don't agree. One of their spokesmen said:
"In line with the wider civil service, bonuses are paid to encourage and reward performance and to enable HMRC to improve its service to taxpayers and the government.".
An interesting argument, unfortunately here's where the real world and HMRC's "Lah Lah Land" differ.
In the real world bonuses are paid after service levls have improved, and after targets set have been met. To pay a bonus before any targets have been met undermines the incentive point of the bonus, and makes a mockery of the bouns system.
They just don't get it do they?
Tax does have to be taxing.
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