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.

Monday, 13 September 2010

Hartnett Speaks

Dave Hartnett
Dave Hartnett, HMRC's permanent secretary for tax, managed to put his foot in his mouth over the weekend.

He kicked off by refusing to apologise for the oncoming storm of extra demands for tax from HMRC, resulting from their well publicised cock up over tax over/underpayments that affect between 6-10 million people.

Hartnett denied there had been any errors, and said he saw no need to apologise.

The Guardian quoted him from BBC Radio 4's Money Box programme:

"I'm not sure I see a need to apologise.

I've read the papers, listened to the media and heard stories of HMRC blunder and IT failure – neither of those are true.

Every country that I know of that has deduction of tax from wages and salaries has to do a reconciliation at the end of each year and we're doing one.

I don't think we are extraordinary. Once or twice in the past the numbers have been very large – sometimes they're less. It depends on how the system has been operated and what issues there have been. We didn't get it wrong. This needs to be reconciled.

We're going to be as sympathetic as we can to anyone who comes to us and says you're trying to take too much money too fast.

If the results of the exercise we're now engaged in show that there are aspects of our plans which are not going to work well for the work we're trying to do or for our customers, we will consider changing them.

I am addressing the issue and I think the nation needs me to do just that.
"

Tory MP Ian Liddell-Grainger, who chairs the all-party parliamentary group on taxation, thought that Hartnett was talking bollocks wrt the claim that the repayment demands were not due to any "mistake" by the authorities.

Warnings had been ignored for years that the system was not "up to it", he said – accusing Hartnett of showing the typical "arrogance" of senior civil servants.

"It is a mistake. We have been warning for a long time that structurally this is not up to it. It comes down to a 21st century computer system and a 1940s PAYE system."

(Source Telegraph)

I would point out that in the real world Dave those who have, through no fault of their own, underpaid tax (because they assumed that HMRC had got the figures right) will have spent the money on "luxuries" such as food, rent and heating.

Anyhoo, a few hours is a long time in farces.

Within hours of refusing to apologise Hartnett, having been subjected to a barrage of criticism from taxpayers and MPs (George Osborne, the Chancellor, was said to have been incandescent, Lord Oakeshott said Hartnett's response made the BP chief, Tony Hayward, "look like a model of disaster management" adding that Hartnett was "in a world of his own; I wonder what planet he is on? This is the latest in a series of management failures in the HMRC going back many years. If Mr Hartnett cannot see why he should apologise for this one, then he really should be reconsidering his own position."), issued an apology.

He said that he was "deeply sorry that people are facing an unexpected bill.

Everyone in HMRC is working hard to make this as painless as possible.

I apologise if my remarks came across as insensitive. I am working flat out with my colleagues to ensure everyone's tax is correct and the new computer system will help us do this.

It was this new system that revealed the extent and size of reconciliations required – and will help us be more accurate in future – but we do not underestimate the distress caused to taxpayers and, once again, I apologise.
".

(Source The Independent)

As to whether Hartnett really meant it, or was merely acting under orders is another matter.

As to why Hartnett (when he was head of the IR inquiry branch he was personally responsible for leading the HMRC investigation into Ken Dodd's tax affairs in the 1980's - you will recall HMRC lost that one when it went to court), Clasper (who works 2 days a week for HMRC) and "Dame" Strathie (and other senior executives of HMRC) are still in their jobs is something that our "beloved" political masters can answer (but probably won't).

Were these people to be removed/step down, their replacements would doubtless be highly skilled in political spin but lacking the necessary management skills/experience to turn HMRC around.

Frankly speaking it is my belief that, in its current form, HMRC is beyond redemption.

My advice is to undo the merger of IR and Customs, take away responsibility for administering tax credits (or simply replace them with a higher rate personal allowance) then work from there to massively simplify the tax system.

(Factoid: the donkey in the picture is called Dilbert - my thanks to the loyal reader who sent me Dilbert's photo and gave me permission to use it - Dilbert wishes to make it clear than any physical resemblance to Hartnett is an unfortunate coincidence).

Tax does have to be taxing.

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16 comments:

  1. "I am addressing the issue and I think the nation needs me to do just that." The man sounds like Tony B Liar at his most nauseating.

    The staff of HMRC have no chance of doing a decent job if the face of such unbelievable complacency and arrogance.

    ReplyDelete
  2. I would be interested to know how the number of incorrect cases of tax being paid this year compares with the last few years.

    If it is similar then what is the problem, if there is a sudden huge increase then either the new system is working or complete bollocks.

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  3. He says "Everyone in HMRC is working hard to make this as painless as possible".

    It certainly couldnt be you Dave with your 107 invitations to eat, drink, (including lunch with Goldman Sachs) at such venues as the Hilton in Park Lane, the Cinnamon Club and the Savoy hotel in London.

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  4. "I would be interested to know how the number of incorrect cases of tax being paid this year compares with the last few years."

    There are approx 18 million open cases for the 4 years prior to 2008/09. That means assessments that haven't been done. That would average out at over 5 million cases that haven't been checked as weel as the assessments that have been done for each year.

    There are so many because despite people working on them all year, every year and issuing underpayment/overpayments there are not enough staff to deal with them all. Until they are all assessed you won't be able to compare the number of incorrect cases.

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  5. Cheers 12:55, so what is all the fuss about at the moment? it looks like the only story is that the new system has just speeded up getting the letters out to tell people where they stand on their tax payments.

    ReplyDelete
  6. "it looks like the only story is that the new system has just speeded up getting the letters out to tell people where they stand on their tax payments."

    Thats right. And I'm sure that is what HMRC press office wanted the press to say when they released the news. But there is a spending review in October to cut budgets and lay thousands of people off. That will be much easier with stories like this twisted as it has been.

    You should also see the u-turn in the right wing press over the last couple of weeks. HMRC began a consultation on changing the PAYE system a few weeks ago. As you can see on this blog everyone was horrified at the idea. Now everyone is saying the existing system is not fit for purpose and we must have a system that irradicates underpayments/overpayments. Real time system anyone?

    http://hmrcisshite.blogspot.com/2010/08/overoptimistic.html

    ReplyDelete
  7. "Frankly speaking it is my belief that, in its current form, HMRC is beyond redemption.

    My advice is to undo the merger of IR and Customs, take away responsibility for administering tax credits (or simply replace them with a higher rate personal allowance) then work from there to massively simplify the tax system."

    Ken - if HMRC had never been created, or tax credits etc would this have stopped the current "problem"?

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  8. We will never know if the current problem would have occurred if HMRC or the Tax Credit system had not been created. We do know however that HMRC is in a shambles internally and the way it deals with the general public is appalling.

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  9. Good work Mr Hartnett you have certainly united the politicians. This fiasco has also educated a lot of the population about tax, so surely the way to drive this forward is to set up online tax code and tax deduction checkers so that people can self serve and ultimately work out if they appear to be paying too much or too little tax.

    ReplyDelete
  10. MARK SERWOTKA of the PCS union will be arguing that not one public sector job should be cut on Sky News at 7.

    Just shows how out of the touch the PCS union are they did nothing to stop the redundancies and cuts now they going on live tv and trying to stop it 5 years to late Mr Serwotka where was the PCS union when it all began.

    Your union rep told us all to sit tight they couldn't make us redundant as there was no money and that we were outside of RDT so they couldn't move us and now our office has just an enquiry centre two years ago there were 200 people.

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  11. Not all of this is HMRC's fault. Tax Codes can only be right if they are provided with the correct info. Also, employers have to be adminstering it correctly as well remember

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  12. Just shows how out of the touch the PCS union are they did nothing to stop the redundancies and cuts now they going on live tv and trying to stop it 5 years to late Mr Serwotka where was the PCS union when it all began.

    And yet there are still so many people paying their dues to the PCS.

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  13. for a point of information, no one has been made reduntant in hmrc, all of those left voluntarily even if they had little choice. they also got a better deal than those likely to go now.
    the reason for that is due to pcs not by a generous employer protecting staff.

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  14. Re. 17:42 and 17:52

    I agree in that conditions got worse for many without the PCS really showing any muscle. The management figured out the weakness of PCS very quickly.
    A lot of people left our office through just becoming depressed and isolated, which was exactly what HMRC wanted and knew would happen.
    At the same time I remember standing on the Picket Line and being sniggered at by staff walking on into work a few years ago, even after PCS gave warnings of what was to come. So its not all PCS fault.

    I left too but I bet the jokers sniggering at the Industrial Action in 2005/06 are not laughng now.

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  15. On a positive note, every day of strike action brings down the deficit.

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  16. I left too but I bet the jokers sniggering at the Industrial Action in 2005/06 are not laughng now.

    There may be many worries in loosing your job but I wonder how many of them see this as a possible way out.

    ReplyDelete