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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, 15 April 2010
Bullying and Not Fit For Purpose
The Times reports that a taxpayer tried to reclaim £3K in overpaid tax for the year to April 2010.
However, HMRC calculated that he was in fact owed £1K.
However, under the new penalty regulations HMRC can fine people up to 30% of tax owed for careless mistakes and up to 100% for deliberate errors.
Now being a simple sort of person I would suggest that these rules, unless there has been a deliberate attempt to defraud HMRC, are meant to be applied with some form of commonsense (most especially if it is a tax reclaim rather than annual self assessment).
HMRC took the "middle route", and fined the taxpayer 70% of the £2K difference between the sum that he felt he was owed and the sum that HMRC calculated it would repay him; ie there is an implication that he was deliberately trying to defraud HMRC.
The taxpayer was fined £2K, even though he was owed £1K.
Phil Berwick, director of tax investigations at McGrigors, the law firm that became involved in the case after HMRC issued the fine, told The Times:
"Calculating a rebate can be complicated and the taxpayer in question was unrepresented by an adviser, yet HMRC has refused to take any of this into consideration.
We believe he made an honest mistake, so for HMRC to be fining him is outrageous. HMRC has charged this taxpayer with a higher penalty than someone committing a serious fraud under the old penalty regime."
It is clear that the heavy handed treatment of this taxpayer by HMRC (have they proven that he was attempting to deliberately defraud them?) will put people off from claiming rebates, lest they be fined more than the rebate they get for any accidental error.
Matthew Elliott, chief executive of the TaxPayers' Alliance, put it more directly:
"HMRC seems to have given up entirely on serving the public and taken to bullying them instead. We have a hugely complex tax system, and no one should be fined for being unable to understand its every technicality.
A lot of people are already angry at being overtaxed and, if HMRC tries to deter them from claiming rebates in this way, tempers are going to rise further. The tax system and the tax authorities have ceased to be fit for purpose."
The state is using HMRC to subjugate the population, as it becomes ever more desperate in its search for funds.
Sadly I do not see any change of direction likely, whoever wins the coming election. Lazy MPs voted through the legalisation, that HMRC are now so eagerly using against the taxpayer, without any real scrutiny or care as to the consequences. Many of these same lazy MPs will be returned to parliament after the election.
Who will ask the akward questions?
Tax does have to be taxing.
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