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, 14 July 2011

Complexity

Complex
The FT reports that Smith & Williamson have warned that pensioners are more likely to over-pay tax on their income than other taxpayers, as a result of incorrect PAYE codes.

The coding problems arise as a result of the fact that some pensioners have complex (by HMRC standards) financial affairs that don't neatly fit into "boxes", eg pensions from a number of different sources together with savings/dividend income.

Add in the fact that personal allowances vary according to age, and you have a recipe for disaster.

The Office of Tax Simplification has said it recognises the difficulties, and is considering how the tax matters of pensioners can be improved.

However, in the meantime, pensioners (as should all taxpayers) check their tax calculations and (where necessary) use the services of organisations such as Citizens Advice Bureau and TOP (TaxHelp for Older People).

The days when a taxpayer's affairs were looked after in a local tax office by a named Tax Officer, who would give individual attention, have long gone and will never return.

Tax does have to be taxing.

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23 comments:

  1. Easily dealt with. The state pension is taxable so pay it net of basic rate tax. If the person is in receipt of earnings or another pension then no issues unless liable at higher rate. This would be collected through self assessment so again no real worries. If the individual is not in receipt of any other income then a full tax code could be operated against the pension once the pensioner states this is their only source of income.

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  2. Pay it net of tax? Are you mad? The point is a lot of people ignore correspondence from HMRC and will not contact them, so paying it net of tax will mean millions of pensioners will pay the wrong amount of tax for years.

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  3. Sorry, can't follow 11.04's line of thinking there! While HMRC/IR have historically not coped well with pensioners tax some of the blame has to be shared by private pension companies not being able to stick to the same, overly complicated, pension number, or indeed company name, for more than one year at a time and the myriad of small pensions paid out that should be amalgamated into single payments (though I defer that this may be due to pension law requirements, I'm not certain about that) LL

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  4. If you have any doubts about the disparity of treatment between the top and the bottom of the taxpayers tree have a look at the article in the current private eye!

    This underpins Ken and this sites attempts to highlight why hmtcisshite.

    Oh, BTW, dont expect to see it here, you have to do a little work yourselves!

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  5. There is an easier solution to the problem of pensioners. Change the law so pension payments are not subject to income tax.

    Separately you could help simplify the system by removing tax relief on pension payments. You get the income and pay tax on it once at the time it is originally earned. This would save a lot of time and money in administration.

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  6. 07:14,

    I take it you're referring to "Hartnett's content" on p33?

    "This underpins Ken and this sites attempts to highlight why hmtcisshite."

    Really? Actually I've always thought comments from Ken about issues such as the Vodafone deal have been remarkably thin on the ground. Could that be because (quite rightly) questioning such cosy treatment of big corporates that use large-scale, aggressive schemes intended to produce tax advantages not intended by Parliament wouldn't sit too well with the neo-liberal position that the rich and powerful in society should basically be able to do what they want ... as long as they don't commit the cardinal sin of working in the public sector?

    Stew G

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  7. I agree with 20.22. My 88 year old mother-in-law threw away her census form, and was threatened with fines if she did not comply. Anything from HMRC would likely be thrown away too. 11.04 makes an utterly ridiculous suggestion. That person has absolutely no idea of how the system works at the moment, or how many old people struggle with bureaucracy. Coming up with an idea that introduces more complexity, and could result in unfair deduction of tax is naive to say the least.

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  8. How's about euthanasia, it'll save HMRC a shedload of additional paperwork and spreadsheets... job done!

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  9. Anon @ 18:10... have to agree with you there. Nice bit of 'PaceSetter' thinking there too!!!

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  10. Just a few points to make:-

    Thick-skinned Stew G is becoming more boring than a Pacestter meeting, is he now the haemorroid on the rear of progress?

    18:10 0n 15th, you must be a Pacesetter practitioner to come up with that bit of drivel.

    In case you have missed the point, this site appears to provide the catalyst for some straight talking, straight thinking and allows into the open that which might otherwise not see the light of day.

    p.12 of current PE also carries a missive - " Good for the taxman". So if you are an e.bay tax evader, look out, the "bots" will soon have you!

    Finally, if you want to see how good HMRC really are not, go online to the HMIC (Her Majesty's Inspector of Constabulary) webite, luckily they oversee HMRC, call up the recent HMRC report on Proceeds of Crime, it is 75 or so pages, but it tells it as it is - don't forget to do a wee bit of between the lines reading, not forgetting, sometimes its what is not said that counts.

    Need not be taxing?
    Have a read peeps!

    Keep up TGW Ken.

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  11. In regards of the usual PaceSetter refrences - shame on you Ken for not picking up on the NAO's report into HMRC's application of PaceSetter over the past five years.

    It makes fantastic reading:

    1. PaceSetter is not yet providing value for money
    2. PaceSetter is not embeeded as much as NAO would expect
    3. PaceSetter is not delivering the expected improvments
    4. Positive impact on morale and engagement is negligible.

    I could go on but it's really a few thousand words that states the bleeding obvious.

    But can you guess how this news was reported by Pravda (HMRC's newsroon)

    Well it was spun more than a tumble-dryer.

    Those in cloud cuckoo-land have already stated that it's carry-on regardless!

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  12. Whoever got the 103rd to sign up to Pacesetter was a genius.
    The amount of taxpayers hard earned money spent on the system is carrying so many noughts it looks like a combined Greek/Irish defecit figure!
    No-one in HMRC "brass" has the courage to point out publicly this gross waste of "cuustomers" funds which begs the repeat question, WHY?
    Most off these evangelical and over-hyped examples of tosh go the same way eventually - look at IIP and what that didn't do for the Civil Service.
    HMRC is headed down line of centric behaviour and as the thinking people are replaced by the non-thinkers the situation will get worse.
    If HMRC were an Agri-Business, it would be up to its neck in it by now.
    Bet there are some humongo.
    us bonuses, lots of people awards and a smattering of Civil Service awards as well.
    As for the next people review, the powers that be are trumpetting their engagement successes everywhere they can on the basis that like Blair, if you say it often enough and with conviction, people will believe what you are saying, even if they don't actually believe you.

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  13. Maybe it needs HMRC, pension companies and pensioners to talk to eachother.

    There is so collusion between pension companies in how they communicate with HMRC. Either they will a)operate different PAYE references for all of their pensions b) ask for PAYE codes for each pension they administor, but under the same PAYE reference or c) will advise HMRC of three pensions and operate a tax code on only one of them, but wonder why they get three codes.

    Pensioners on the other hand, will either a) fill out forms advising how much their pension is going to be per month. b) not send the form back or c) spend time writing to HMRC stating that 'HMRC should know all this has they have been PAYE for XX years and nothing has changed' but not volunteer information to HMRC to enable the correct code to be sent.


    HMRC will then a) Not review records properly for years on end. b) Get confused between the different kinds of pensions and investments and make a hash of it and c) throw all the pensioners in to one basket and ask for huge demands from them all when their income has decreased considerably.

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  14. Round and round and round and round

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  15. @17:11

    Zzzzzzaackly!

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  16. Had a look at HMRC Pacesetter report on the NAO website, its frightening.
    Obbviously this Pacesetter thing is being "marketed" by HMRC and just about to be sold to the rest of the Civil Service by the look of it.
    The NAO have swallowed it hook, line and sinker.
    By comparison, quite a few Police "services" appear to have been evangelised along the way/
    It would be interesting to compare forces that have with those that haven't but somehow I don't trust any figurework relating to pacesetter - don't know why, just this feeling?
    Now, if this system is working, there remain more than a few unanswered questions e.g.:-
    Why is engagement so patently bad in the 103rd?
    Why can the "customers" not get through on the phonelines?
    Why is HMRC still guilty of micromanagement?
    What is the real truth behind the facade of Pacesetter?
    Is it possible to save the brainwashed evangelists?
    WTF do I care? Because I have a conscience thats why!
    You are getting there Ken, despite the ne'er do wells!

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  17. So, the Commissioner of the Met. has resigned.
    Will this show the way for others in public office?
    No, I doubt it as well, still we can live in hope!
    Get the IPCC in there before they all retire.

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  18. 16/07 10:29,

    I guess I must be pretty thick-skinned. However, my strong suspicion that the reason you resort to pretty insults is because you have no coherent argument against what I've been saying certainly helps a great deal!

    Stew G

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  19. Does anyone know where to find the detailed user-guide to Caseflow?

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  20. Savings and dividend income is not liable to Schedule E and normally falls outside the remit of PAYE. Pensioners who have overpaid tax on this class of income usually have done so because the tax was deducted at source by the entity paying the interest or stock dividend. Errors in pensioners PAYE codes would make no difference to these overpayments. The money has to reclaimed from HMRC directly. The issue in my experience is this is not handled as quickly as it should be and to often the repayments go astray. My mum is still waiting for her miserable £230 rebate despite having the claim acknowledged and accepted over 3 months ago. It seems HMRC management are to busy lunching with Vodafone to worry about the rest of the populace.

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  21. @18 July 2011 17:13

    Tax on dividends cannot be repaid as although it is subject to income tax, the corporation who issues the dividend pays the tax on behalf of the individual (as opposed to PAYE, where the employer collects it on behalf of the individual).

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  22. @16.56

    As I suspect you know, there is no such thing - neither is there any meaningful training on it :-(

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  23. Indeed. I had 5 tax codes due to 3 pension schemes and two small businesses. Took a while on Excel to check out they were about right.

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