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, 4 October 2010

Back To The Future?

A study by PCG (Professional Contractors Group) shows that 71% of its contractor members believe that HMRC should be split into a Revenue section and a Customs section, in order to create a simpler tax system.

Those of you with long memories will recall that HMRC was once (pre Brown) in fact two separate organisations (the Inland Revenue and Customs and Excise). A significant number of comments posted on this site by those who work in HMRC criticise this merger, and blame some of the ills that HMRC is suffering on the forcing together of two separate bodies.

It is clear that the merger has been botched, and is still the cause of much internal friction between IR and Customs people. I personally am of the view that it may well be worthwhile splitting the two departments up even if, in the short term, that will require the taxpayer to foot the additional costs.

However, I do not think that splitting HMRC into two is a panacea for all that ails HMRC and our tax system.

The fundamental problem is that the tax system in the UK is too complex, neither the taxpayer or staff of HMRC fully understand it and the costs of administering/complying with it are excessive.

Additionally, as is evidenced by many comments on this site, HMRC management (for numerous reasons) are simply not up to the job of motivating/managing their staff.

Any splitting of HMRC needs to be accompanied by a fundamental simplification of our tax system and a radical reorganisation of the management structure/quality within HMRC.

All of that will cost money.

Sadly, I do not believe that our government has the resources or guts to take the necessary action to improve HMRC (other than some "window dressing" that will grab the headlines for a day or two).

Comments and views, as always, welcome.

Tax does have to be taxing.

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  1. Genuine question:
    - How would you simplify the tax system?
    - What bits of legislation should we lose?

  2. Anom, read the last part of this


  3. Should remain one organisation, just needs decent management and systems.

  4. It should be split
    The ridiculously complicated tax rules should be simplified and streamlined
    The uniformed detection officers should be rejoined with the detection officers at ports and airports
    The Criminal Investigation parts (including the very covert capabilities) should be re joined with the new NCA once SOCA is closed

  5. OP here. Thanks Ken.

    You are right about breaking up HMRC and the chances of the government doing it. They are more likely to sell bits of it to the private sector so that half the work can be done at twice the cost.

    Re your suggestions for simplification:

    - increase the personal allowances to around £10K
    - introduce a flat rate of tax of around 20%
    - abolish all other perverse taxes such as; stamp duty, CGT, IHT, NI etc
    - increase the rate of VAT to make up the shortfall

    So by increasing VAT* to over 50% (needed to make up the shortfall) rich people who can afford expensive accountancy firms will stop trying to avoid paying tax?

    It sounds good but are you sure that the motivation to use offshore, secret bank accounts is because tax is complicated? Doesn't that make your financial affairs more complicated?

    "However, one of the prime motivations for tax evasion is the complexity of the tax system." I would argue it was a desire to keep more of your money for yourself. That won't change just because you change the rules so that:
    - what was evasion becomes avoidance
    - you make avoidance easy for the wealthiest.

    *VAT is easier to abuse and more expensive to police than income tax/NI/CT/CGT/Stamp Duty or IHT.

  6. Why not get rid of the Tax Credit system and raise the personal allowances to a level that makes it worth while to get back to work.

  7. I worked in the Criminal Investigation section of HM Customs until 2009 and I was not at all impressed by the staff that came from the Inland Revenue. They lacked flexibility, wanted to know when their meal breaks would be, almost made you wonder if you could rely on them as you put in someone's door on a knock. Glad I left, rubber desk johnnies.

  8. 11 October 2010 01:39

    Actually, I was less than impressed with the "elite"criminal investigators from C&E when we merged. Seemed to think they were in an episode of The Sweeney, acted like a mid-seventies Regional Crime Squad......

  9. At least they weren't sitting on their arses shining their trousers and sending out letters as an investigative technique and ignoring the fact that criminals laughed at them: unlike the "Special Compliance Office" - disliked and distrusted even by old IR. Oh, and HMCE did most of the serious drugs investigation work, not unmarried mothers misclaiming child benefit. SCO were pathetically useless at recovering money from criminals or putting anyone inside. That useless attitude now governs HMRC Criminal Investigation. There are some very dedicated, well trained and highly knowledgeable people from the rest of old IR - particularly among compliance etc, but ex-SCO investigators? Hmmmm..
    The solution is very simple as outlined by Anonymous at 1906 on 4 October:
    Old HMC&E will not be re-formed, nor will old IR, so take CI out of HMRC (including those bits of the intelligence side (RIS) which are entwined with it), put it in NCA with SOCA and UKBA. Then you have one, and only one, organisation dealing with all high level criminality. "Specialist Investigations" (someone was dreaming when they named that one) can then continue to work on low level Revenue crime under civil rules with everything criminal passed to NCA for development and investigation. Level 1 and 2 crime (as defined by NIM) can be dealt with by CID in police forces, too.

    As for simplifying the tax system - I'm sure there must be some Compliance etc people with some very good, but suppressed ideas.

  10. Anon @ 12:00...

    Your suggestions make a lot of sense. I hope Dame L Strathie will take note.

  11. the old HMCE is gone forever. We sold out to the spies and the lies about how good soca would be. The police didnt like us because we were straight and did the job better and cheaper than they ever could, plain jealousy and their greed for power. HMRC is simply too big to be managed by the current crop of overpaid incompetents. The police will take over all criminal law enforcementznd conduct investigations at great expense and corruptly. they fail to adhere to CPIA and PCEA because they know that they can get away with it.

  12. Anonymous at 14:57 - We didn't sell out, we were sold out by our very own ex-spy, that twat Paul Evans. SOCA stole everything they weren't entitled to and then wasted it. From my own contacts within SOCA, it is obvious that the only driving force is the amount of money officers can get out of the system. Same old greed and corruption as existed in the RCSs.

  13. Gordon Brown, as Chancellor wrote to th Union to say that IR & HMCE would never be merged whilst he was in charge!

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