Money Saved

The Southport Visiter claims that the closure of HMRC's Southport tax office will generate savings.

However, it will take 20 years for these savings to materialise.

I guess that the lengthy time horizon is part of the "Vision" thing that HMRC are following.

Tax does have to be taxing.

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Advice To Alistair Et Al

Lads and ladettes, you might want to read this:

Source PA:

A HM Revenue and Customs (HMRC) spokesman said:

"It's a general principle of tax law that accountancy fees incurred in connection with the completion of a personal tax return are not deductible. This is because the costs of complying with the law are not an allowable expense against tax. This rule applies across the board."

How ironic that the Chancellor doesn't know the tax law!

In his defence, as I have noted before, tax regulations etc have become inexcusably complex and cumbersome (thanks in no small measure to his boss's ten year tenure at Number 11). It is scarcely surprising that cabinet ministers needed help with their tax returns.

Could this little "episode" provide the impetus for simplifying the tax system?

Ermmm...no...Brown doesn't do "simple"!

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Oh The Irony!

How ironic that the self same MPs, who have been bleating on and on about the "immorality" of tax avoidance, have themselves been using taxpayers' money (as a tax deductible item) to fund advice to ensure that they avoid tax themselves.

As we all know, though some of us don't like, tax avoidance is perfectly legal; no matter what Hartnett, Brown, Darling et al might try to have us believe.

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Blears - The Tax Overpayment

It seems that Blears has made a tax overpayment, if Dave Hartnett's tax assessment of her zero liability for CGT is accurate.

Telegraph

"I've got round to asking after Hazel Blears and her cheque, which I mentioned a while back. My query was prompted by an item in the Independent's Pandora diary which claimed she was minded to hand the money over to a charity rather than see it credited to her future tax liabilities. What I've discovered rather increases the pressure on Geoff Hoon and James Purnell, who also face some property/CGT questions.

According to her office, on the day Ms Blears popped up in front of the cameras waving her cheque, she spoke to Dave Hartnett, the permanent secretary for tax at HM Revenue and Customs. Mr Hartnett is, in effect, the country's top tax man. He worked out for her what her capital gains tax liability would have been had she been liable for one. However - this is the crucial bit - he assured her that she was not liable and therefore did not have to pay the cash. Ms Blears, in line with the point she has made that her constituents aren't impressed even if it was legal (no kidding), decided to pay the cash anyway, and was given a special dispensation to do so. The cheque was walked around to HMRC headquarters that evening and handed over to a senior official, who had stayed behind to receive it.

The cheque has been cashed, I'm told by Ms Blears' advisers, and is now sitting in an account at HMRC. What happens to it now is unclear. If it goes into the general Government account and therefore becomes available to pay for hospitals, nuclear weapons, or police uniforms, Ms Blears will be happy. But if HMRC rules that it can only be credited to her by offsetting it against her future liabilities - in effect repaying her the money - she will make an equivalent contribution to a charity.

Which is why all eyes are on Messrs Hoon and Purnell to see how they respond. Ms Blears has set them a precedent."

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Silly Billies!

Having warned us all of the dangers of responding to unsolicited emails, claiming to be from HMRC (in reality coming from scammers), HMRC are now getting in on the act and are sending unsolicited texts and voicemail messages.

Never respond to an unsolicited text, voicemail or email (whether it seems to be from HMRC or not).

HMRC just don't seem to be able to get their heads around data security/scamming risks.

Source Director of Finance:

"PKF Accountants & business advisers is warning individuals not to respond to HM Revenue & Custom’s (HMRC) latest attempts to contact taxpayers by text or automated voice messages to save money.

Just two weeks after issuing warnings about the latest identity theft scams perpetrated by fraudsters claiming to be HMRC, the Revenue announced on Monday that it is to try contacting taxpayers by automated voicemail messages and text message.

Matt Coward, Director of Personal Tax at PKF, says: “We are urging individuals and businesses not to respond to any of these sort of messages as it is just not safe”.

On its website, HMRC has warned taxpayers to only respond to a text or automated message that quotes specific telephone numbers – 0191 225 5348 for tax or 0845 300 3900 for tax credits issues.

Coward commented, “How is anyone receiving a text or call purporting to be from HMRC to know whether or not it really is from the tax authorities?

Perhaps the only giveaway that it is a genuine number, is that the tax helpline always seems to be engaged – a fraudster would at least want to answer your call!

But, ultimately, does HMRC really expect every recipient to spend time digging around on the Revenue website to check out that the response number is genuine?”

Coward continued, “I know that HMRC is duty bound to try to save money and to look at all communication technologies, but this is clearly a waste of time. I suspect that most people will simply put down the phone as soon as they realise that the call is automated. With text messages, few will expect to receive one from HMRC so, one hopes, they would treat it with the utmost suspicion.

“If HMRC wants to try out these technologies they should do it via an “opt in” system and the messages should carry some form of personalised accreditation so that taxpayers who have registered, know they are genuine. But in my opinion, HMRC should simply use the funds spent on such exercises to clear its huge backlog of ordinary post from those taxpayers who have taken the trouble to contact them by letter."

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Muddying The Waters

The Government's controversial car scrappage scheme (bangers for cash), has hit another hurdle courtesy of the HMRC "guidance note" about the scheme.

The car industry claim that the note had "muddied the waters".

A Honda spokesman was quoted in The Times:

"We have asked our dealers to hold off registering vehicles. We want to see clarity with this issue of VAT and how the industry contribution is to be managed.

The document sent out last week from the Revenue was quite a confusing document. This is what we are seeking clarification on."

Another example of a poorly thought out government "initiative" adding to the complexity of the already massively overcomplex tax legislation.

However, as noted before on this site, Brown doesn't do "simple".

As to whether encouraging people to scrap old cars and buy new ones (many of which may well be foreign imports) actually improves the economy or environment, is of course another issue!

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Above The Law

It seems that our "honourable" members are regarded by HMRC as being above the law.

That at least is according to this article in The Sunday Express.

I assume that the "special status" of MPs, and the fact that HMRC seemingly treats them with kid gloves, is due to the fact that HMRC has been politicised during Brown's tenure of the Treasury and Number 10.

How ironic that the voters (ie ordinary taxpayers) are not treated by HMRC in such a deferential manner!

"TAX inspectors who suggested investigating MPs were threatened with the sack, a whistleblower claimed last night.

Thomas Casagranda, a former tax compliance officer with HM Revenue and Customs, said MPs' tax affairs were effectively 'above the law' because senior managers refused to scrutinise them.

Mr Casagranda, who quit his post at HMRC's Reading office 18 months ago, said he had been 'shocked' by their reluctance to act.

He confirmed he suggested an investigation after receiving a tip-off that an MP was failing to declare rental income from a property.

He said: 'During a routine meeting to discuss possible projects, such as investigating taxi drivers or subcontractors in the building in??d???u???stry, I suggested running a project on MPs.

'The meeting went on as normal but afterwards I was taken aside by the head of the regional risk intelligence team and told I would be 'out on my ear' if I mentioned MPs again. I was told that if I looked at an MP's tax return or checked them out on PAYE records I would face disciplinary proceedings.

'I was boiling with anger afterwards because I was effectively being told there was one law for MPs and one for everyone else. I was being leant on very heavily to drop it and it was quite clear that the manager who was leaning on me was being lent on himself from above. It was disgraceful.'

MPs' tax returns are dealt with by a special unit which also handles celebrities.

But Mr Casagranda, who is writing a book on his experiences at HMRC, said there was no similar ban on investigating famous names.

His claims will raise fresh concerns about the apparent impunity of MPs milking the system.

Dozens are thought to have avoided paying capital gains tax on their taxpayer-funded second homes by nominating them as their main residences for tax purposes.

Communities Secretary Hazel Blears last week paid £13,332 in capital gains tax after it emerged she had avoided it on the sale of a previous home.

She insisted she had done nothing wrong. Work and Pensions Secretary James Purnell has also avoided paying capital gains tax in the past but has not offered to repay any cash.

In the wake of the expenses scandal HMRC has launched an inquiry into whether MPs have been routinely avoiding capital gains tax.

Last night it denied Mr Casagranda’s claims and insisted MPs had not been above the law.

A spokesman added: 'We cannot comment on the tax affairs of clearly identifiable groups of taxpayers. One of our key roles is policing the tax rules and we do this very effectively.' "

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Staff Illness Saves Money

This piece in publicservice.co.uk states that HMRC is suffering from an increase in staff being off through sickness.

However, apparently, this is a good thing. Seemingly the staff absence means that less calls from the public are able to be taken.

Why is this a good thing?

1 It seems that the National Audit Office found that between 15% and 40% of contact with customers was avoidable.

2 Reducing the number of avoidable calls by 15% could release up to £23M a year (11% of HMRC's annual spend on contact centres).

So all that HMRC have to do is to convince their "customers" (taxpayers to you and I) that their call is not necessary or, conversely, simply not staff the call centres in the first place and leave the calls unanswered.

Sorted!

Just out of interest, why are more staff off sick?

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Snouts in The Trough - No Special Rules For MPs

From the horse's mouth (HMRC) itself:

"There are no special capital gains tax rules covering MPs' homes."

Does this mean that MP's, in the event that they have underpaid tax, may expect a tax investigation going back several years? That is what would happen to the rest of us, were we to find ourselves in this situation.

It would be a salutary lesson for the people who gave HMRC its extra powers, and who politicised it, to be on the receiving end of one of its investigations. It might even bring MPs closer to the people!

I assume that the offending MPs will be named and shamed by HMRC!

Source The Times:

"Was HM Revenue & Customs warned several years ago that MPs were playing fast and loose with the tax system as regards their homes? So claims Thomas Casagranda, an HMRC employee, who says that he highlighted for his local compliance team the use of second homes by MPs and whether this should be taxed. "My idea was instantly shot down in flames by a manager and I was told that if I looked at a local MP’s tax returns, I would face conduct and disciplinary procedures."

As Ken Frost, a long-time critic of the taxman who drew Casagranda's letter to my attention, points out, if the profits from second homes are not taxable, then repayments by Blears et al would be a tax overpayment. If they are taxable, then they owe interest and fines.

The HMRC ducks the issue. "We cannot discuss identifiable individuals' tax affairs. The capital gains tax relief for people’s homes applies to only one residence at any one time," they tell me. "More than one home can qualify for relief at the same time but it will completely depend on the facts of the case. There are no special capital gains tax rules covering MPs' homes."

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Snouts in The Trough - Suggestion Ignored

My thanks to Thomas Casagranda for giving me permission to post a letter that he sent to the Mail on Sunday, re second home profits.

I wonder how HMRC are able to reconcile their reluctance to look into this issue, with the sudden "enthusiasm" of some MPs to now pay the tax on these profits? Either these profits are taxable or they are not.

In the event that the profits are not taxable, then the payment made by Blears etc will be classified as a tax overpayment. In the event that there is a tax liability, then the underpayments of tax are surely subject to interest/fines?

"Subsequent to Ian Galagher's article dated 11/05/2009, I feel compelled to write.

In 2005/06 I highlighted, for my local compliance team, as a revenue employee, the use of second homes by MPs as a viable revenue project. My idea was instantly shot down in flames by a manager, and I was told that if I looked at a local MP's tax returns, I would face conduct and discipline procedures.

In my opinion, it is too little too late, and if HMRC targeted the MPs a few years' ago, the foul scandals besmirching the Commons and Lords would, possibly , have not occurred to the extent that they have.

Thomas Casagranda"

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Benders

"We will advise Ministers on new legislation to close down avoidance schemes and on simplifying current anti-avoidance legislation to make to easier to operate and understand while preserving its effect."

Source HMRC Delivering Our Vision Business Plan 2009-10 (page 8).

So that will include house flipping schemes used by MPs then?

How ironic that had MPs not been braying on and on about the "evils" of tax avoidance (which is perfectly legal), they might not have found themselves in the shit now.

Maybe they were of the view that "tax avoidance" is only that which is practised by "wealthy" individuals with offshore accounts?

What a foolish and ignorant notion that is.

Now they know better!

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Snouts in The Trough - Tax Avoidance

Isn't it ironic that Smiler Brown and his party of "fiscally prudent" lackeys have been so very very vocal over the "heinous crime" (so they would have us believe) of tax avoidance, given that they are experts at tax avoidance themselves?

Flipping one's primary and secondary homes willy nilly, so as to avoid CGT etc, is something of a right of passage for members of ZaNuLabour.

Ooh the irony that their political cudgel, HMRC, has now been forced to investigate whether MPs have deliberately evaded capital gains tax when selling their second homes.

I wonder if any Labour MPs will be "named and shamed"?



Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

System Problems - Again

I understand that HMRC systems are currently failing to process SDLT e-submissions this morning (8th May 2009).

I am advised that HMRC have been informed, and that they have actioned their internal escalation procedures.

Please feel free to send up dates with the progress made in addressing this issue.

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

The Culture of Hostility

Accountancy Age warns of the dangers of a culture of hostility setting root in HMRC, as a result of the pressure to close the "tax gap" (the actual size of which is not precisely known):

"The central focus on closing the gap could create a culture of hostility towards tax payers in a way that would trigger people into taking risks, pushing them towards avoidance or even evasion.

Combined with increased tax rates for the better off, this is a real danger unless HMRC finds a more co-operative approach."

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Tax Refund Claims

The FT reports that that as from April 2010, taxpayers will no longer be able to sue HMRC in the High Court to reclaim overpaid corporation, income and capital gains tax.

The claims would be limited to a statutory process, which imposes a time limit of four years in which the claim can be made.

It is expected that there will be a surge of claims before the cut off deadline.

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"