HMRC Is Shite

HMRC Is Shite
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.

Thursday, 11 February 2010

HMRC's Coding Enigma IV

Despite attempts by HMRC to pass the burden of responsibility for identifying coding errors onto the hapless taxpayer, the buck cannot be so easily passed.

Accountancy Age reports that UK200Group (the foremost mutual association of quality assured independent accountants and lawyers serving the SME business sector) has delivered a scathing assessment of HMRC's incompetence and hypocrisy over this issue.

They are quoted:

"The new system has wrongly calculated how much employers should deduct from salaries, while company cars and private health insurance could be taxed twice."

Also, as noted on this site last week, more than 500,000 people who are claiming a state pension for the first time during the current tax year could have too much tax deducted from their income, and married couples and civil partners aged 76 or over could lose an allowance worth nearly £700.

David Whiscombe, a director of BKL Tax and a member of the UK200Group tax panel, really lets loose at HMRC:

"Every person and every organisation makes mistakes from time to time, but there are two things which are disquieting in this story.

The first is that HMRC say that 'the transition to the new system has brought to light some discrepancies in our existing records'.

This indicates a worrying lack of testing before data was switched over to the new system.

As it is, they don't seem to have been aware of the possibility of a problem until they started getting complaints from the public.

The second problem is HMRC's reaction, which is broadly that taxpayers should check the coding notices carefully for themselves and tell HMRC.

Actually, HMRC, just correcting your errors when they are pointed out to you isn't good enough. When a taxpayer makes a mistake, HMRC are increasingly looking to exact penalties.

So what about penalising HMRC for making errors – perhaps by providing for automatic compensation for any taxpayer affected by the mistake? Or do 'penalties for careless errors' only work one way?

HMRC responded:

"HMRC acknowledges that a significant number of coding notices are incorrect because the data carried forward from the previous PAYE system does not match the data received from employers.

We are undertaking a review of those cases which are at most risk of error and will issue revised notices of coding to the individuals as soon as possible. This work is being prioritised so that we deal first with those individuals who are most vulnerable to the changes in their code numbers.

I assume that this is the manual review being conducted by staff (up to management level) over the next 6 weeks, that a loyal reader mentioned in a recent comment?

Had HMRC followed good practice wrt new systems implementation (eg parallel running), this mess would not have happened.

As ever the taxpayer ends up bearing the burden of HMRC's incompetence.

Tax does have to be taxing.

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  1. HMRC staff are being told that the new system is working as it should be. Does that mean that somobody designed it to do this?

  2. The latest staff survey results show that morale in HMRC is zero. HMRC is rated the worst government department by its staff. Any wonder why?

  3. No I don't wonder at all, I know. ~sigh~

  4. In order to 'fix' codings and tax calculations etc staff are being asked to enter fake credits and other info in order to placate the public whilst the system is in its faulty state.

    When the next release comes in on April 1st (no joke), what's the betting that the 'system' will not have any clue what has been inserted correctly or incorrectly and therefore starts automatically issuing grossly incorrect calculations when the P14's/P11'ds (minus any P87 forms or Section 336 ITEPA 2003 claims)?

    But still the 'borg' AKA senior management will still maintain it's nothing to do with them and probably blame it on 'input errors' (which they asked frontline staff to put in).

    Seriously, staff at HMRC involved in PAYE are constantly fighting this new computer system and wondering what stupid nonsense it is going to produce next.

    You can enter the correct figures as far as the documents you have in front of you (provided by the employer or taxpayer) are concerned - but because of the various faults with the system which HMRC grades on 6 figure salaries have refused to correct (and instead rely on AO's/AA's on 16-20K an hour, with no experience in software design - implementing an endless number of ways to patch an ever increasing gaping 'system problems' hole that was created by a private company that seems to have some kind of extreme stranglehold over HMRC) - the end result might as well be like if you throw something that is a brown mixture of solids and liquids at a fan and take a bet on which direction it splatters everything.

  5. Sorry I meant 16-20K a year! Unfortunately HMRC staff don't earn the same as professional footballers. More like £8 or £9 an hour. (About the same as an office receptionist)