Over a year ago I wrote the following:
"HMRC debt collection agents out in the field are now forbidden from contacting HMRC offices to validate the debts that they are being asked to collect.
For why?
It seems that the support teams back at base do not have the time to take phone calls.
That at least is the official explanation given to the field farce. However, it is widely suspected that the real reason is that HMRC is preparing the ground for this work to be given to private debt collection agencies. These private agencies, quite correctly, will not be able to phone up HMRC offices and ask for details from confidential records.
FYI, the budget announced that another £500M of debt would be handed over to private debt collection agencies to chase.
For why?
Well it seems that a pilot scheme went very well for the debt collection agencies.
The agencies were given a tranche of work to do, and a control tranche was left with HMRC teams (but was left completely untouched).
Can you guess what happened?
Yes, that's right, the debt collection agencies won!
Simple!
Anyhoo, why does it matter if field farce teams (or for that matter private debt collectors) cannot contact HMRC support offices?
Surely a debt is a debt, which should be collected, and that is the end of the matter?
Not quite, for I am also given to understand that the field farce estimate that a large percentage (maybe up to 60%) of the debts they are given to chase up are in fact incorrect.
The field farce have been told that, if challenged by a "customer" (taxpayer to you and I), the onus is on the "customer" to prove that HMRC are wrong.
Guilty until proven innocent is the motto!
How can there be such a large percentage error in debts being chased up?
Due to delays in processing returns, field farce are regularly chasing estimated debts which have been, or should have been, displaced by returns submitted. The returns have either gone down the online black hole, again a regular occurrence, or are sitting in an office somewhere waiting to be dealt with.
Additionally, when they are chasing current PAYE, their cases are sometimes prepared up to 3 weeks in advance.
Guess what?
Most have been paid by the time they get to them.
I won't say what I was told about the validity of New Tax Credit debts!
Things will only get worse!
Well, "good news"!
Accountancy Age reports that 10 debt collection agencies have been appointed by HMRC to collect up to £1BN in taxes owed.
The contracts are worth £70M.
The successful companies this time around included Advantis Credit, Apex Credit, Close Credit Management, Clanchatton, Hillesden, Fredrickson International and Rossendales.
Commercial Collection Services, Fairfax Solicitors and iQor Recovery Services have been retained from the pilot scheme in 2010-11. However, Credit Solutions, will not be appointed by HMRC, despite collecting debts in 2010-11.
Hoozah!
Tax does have to be taxing.
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If I demanded money with enough menaces to 100 people who live in my street (regardless of whether they owe me money or not)I am certain that at least 5 wimpish dullards would cough up----just to be rid of me!
ReplyDeleteThat is the way HMRC creeps (and their DCA's)work.
Gotta fill that black hole in the economy somehoo doncha know!!
In any case, it seems a timely intervention by an MP's letter or two (according to this fine site)can somehow make a debt 'disappear'.......
"It seems that the support teams back at base do not have the time to take phone calls"
ReplyDeleteThats a lie. A colleague of mine in Debt Management told me there is nothing to do anymore.
The previous work (dating back to Customs and Excise Debt Management) has faded away.
Cleaning cupboards, some photocopying and other mind numbing tasks is whats left.
I can't say thats the case for all areas as I never worked in that area.
So as you say Ken, its probably going to private agenices.
On a good note. Private debt collectors will probably be easier to get through to on the phone.
ReplyDelete@14.44 Even better than that. They'll pop round to see you - give you that personalised asset seizing service you always wanted LOL
ReplyDelete@16:02 lol, they are not that keen unless they can claim expenses.
ReplyDeleteMind you with the negotiating skills of HMRC they will probably end up paying the collectors more than the debt is worth even if it is not collected.
Hmm. Ken, as an accountant, should have heard of a revenue determination as detailed in S28C TMA1970. I mean it's only been around for 41 years.....
ReplyDeleteIt's applied after penalty notices are sent and usually when there is going to be a loss to HMRC through the customers failure to make a return of taxable income.
The onus is on the customer to send the return as required by the statutory notice sent to them to complete the return and pay income tax! The innocent until proven guilty argument is completely strawman in this case.
other than that I completely agree with him. I suggest that he and any other accountants that are lurking take time to read the very tiny print after Section 28C in the link provided as it provides a freebie as to how to get your client off from being forced to pay the determination in respect of an out of date return.
ReplyDeleteIf you're wondering why HMRC don't advertise it, well you're being %^&"ing ridiculous and have no grasp of reality. It's rather like being taken to court and expecting legal advice from the prosecutor/petitioner/plaintiff.
In any case practically every decision letter or notice sent by HMRC advises the law under which the decision has been reached or the penalty has been charged and advises the customer how to get further help.
and before some nitwit states that HMRC should expect people to understand tax law. I don't understand the nuance of everything in the Road Traffic Acts but that doesn't stop me from being held to account if I break them,
ReplyDeleteFor example, if I decide to drive on the right hand side of the road, I don't think the police officer would be happy with the explanation that no one had quoted or explained the exact provision of the law which says that I shouldn't. Same goes for leaving my car on a yellow line or driving away on a flashing amber light when there is a pedestrian still crossing etc.
Pubs and shops are not expected to quote the legislation under which their alcohol license exists or why they can't serve under 18's. These are all laws subject to civil and criminal penalties regardless of whether there should be some discretion as to whether they should be applied or not.
If a customer submits a return to HMRC, surely from that point onwards HMRC is responsible for getting things right, it does not matter if the return is late, that is a seperate issue.
ReplyDeleteSo, having received the "customers" return, what should happen?
Well they should not be sending out the thugs to attempt to extort money or goods which are not lawfully due, that, as has been discussed previously is an illegal act in itself.
Of course, where the debt is actually correct and due, no-one in their right mind would argue that HMRC should not attempt to recover that debt - legally, of course.
So, it must be obvious, even to some of those that argue on this site that black is white, HMRC does break the law, repeatedly, in this sensitive area.
The bigger problem is no-one brings them to account over their actions. Its no good harping on about the "customer" having responsibilities in law to submit their returns and pay any tax due on time if HMRC doesn't comply afterwards.
@23 July 2011 10:51
ReplyDeleteA revenue determination only exists until the person submits the return and that return is calculated. It is legally due, it's written in to statute law therefore it's legally due in lieu of that person making their own self assessment. How are you not getting this?
If someone tries to make a claim after the legal time limit that HMRC can act on that claim which at the moment stands at 4 years after the end of the year after the year of assessment. However, please read the small print after the section in the document. HMRC obviously cannot attempt to recover their estimate of tax on someone if say they had no income but if they simply plead ignorance after sending perhaps 10-20 statutory notices of their obligations and they ignore them, HMRC cannot help them any further. They are not their mum.
It's no good harping on that HMRC doesn't act swiftly when it gives taxpayers 5 years to get their tax affairs sorted and sends them several notices and holds their hand when given the opportunity to argue against them.
"A revenue determination only exists until the person submits the return and that return is calculated"
ReplyDeleteI submitted a SA return on paper because of problems with the online system and it took nearly three months between someone signing for it and it actually being processed.
Now if for some reason my case was near the end of the filing period (it was not because I find it easier to file within a couple of months of the year end) then all sorts of problems could have arissen.
@23 July 2011 11:54
ReplyDeleteHad HMRC issued you with a determination of tax? Probably not, You would know if you had, because it would have been accompanied by a notice telling you the law under which it had been charged and this whole discussion would be redundant.
Determinations are charged by those who pose a risk to revenue. Someone who can't file a return on the internet for whatever reason wouldn't fall under that category (although that doesn't technically excuse them from paying their tax on time.
OK you may have been issued with an automatic penalty (with a notice under which taxes act it had been charged and an A4 leaflet on how to appeal) but in all likelihood on appeal that would have been quashed if you had a genuine reason for not filing it on time e.g. it wasn't because you registered online on 30 January, or if not the person who rejected your appeal would have sent you two pages of A4 telling you how to disagree with their decision with an offer to take the case to a tribunal heard by the ministry of justice.
@@23 July 2011 11:54
ReplyDeleteI've just re-read your comment and I'm actually wondering what you are on about.
If a return is received without a calculation e.g. a paper return. HMRC should have in fact processed that return (that could have been received any time before 31 October) to give a notification of tax due by 31 January.
If a self assessment paper return is received on time and HMRC processes it late, then the customer has 30 days to pay the amount after the calculation has been sent, so if for example You sent you return in 30 October and for some reason you were 1,999,999 out of the two million odd that have filed a paper return and the team of 120 odd people processing these returns (it used to be a few thousand) didn't get to it as fast as they should have done so your return wasn't processed on time and the calculation was sent on 5 January, you would have until 4 February to pay without interest and surcharges.
Determinations are charged to individuals who haven't filed their returns several years after they are due and nine times out of ten they owe tax but ignored their obligations.
HMRC can't help people who refuse to sort themselves out or refuse HMRC/MOJ help. HMRC is not their mum/nanny/social worker/other named person under the Mental Health Act 1983.
@23 July 2011 11:54
ReplyDeleteActually I am really struggling here to see what your point is:
* You submitted your return on time.
* HMRC notified you of the amount of tax to pay on time.
So your issue seems to stem from:
* you acting within the law and
* HMRC acting within the law?
So &%$!ing what if it took three months to process. HMRC has done nothing legally wrong here regardless of your expectation.
Do you use this defence in your every day life e.g. you think it's ok to have non-consensual sex with someone because your expectation from them was to recieve a hand-job from them?
I really pity you and your existence.
@12:11 @13:06
ReplyDeleteI was not trying to make a big point just highlight that the time HMRC take to process paperwork could be an issue in some cases.
@13:34 Fuck off back to your little HMRC den, twat.
@23 July 2011 13:48
ReplyDeleteThe time it took to process your return is because of the cynical reduction in staff by both governments that have been in power since HMRC was created - the reduction that amounts to 60% of the previous workforce still working there.
Despite the fact HMRC costs virtually less than half a penny in the pound to run. Members of the public were happy to see staff reductions in HMRC under the subtitles of 'waste' and 'bureaucracy'.
With regards to your last point, you highlighted a problem that actually wasn't a problem.... Sorry. even HMRC cannot reasonably justify stupidity on behalf of a member of the public.
"With regards to your last point, you highlighted a problem that actually wasn't a problem.... Sorry. even HMRC cannot reasonably justify stupidity on behalf of a member of the public."
ReplyDeleteThe time it takes HMRC to process paperwork is a problem. The only people who don't see it as a problem is HMRC staff. Still, when more of you are signing on maybe you will get the point.
WTF is going on here?
ReplyDeleteHMRC carries a huge backlog of processing even after taking on more casuals to sort mail.
As a result of backlogs of months inocent people are being chased for debt that they do not owe.
Forget the phone system, even if you get through you won't find anyone with a clue about your affairs.
HMRC is 103rd (last) because that's what it is in its employees eyes, and I bet the Customers" feel the same way.
You can package manure with candy, perfumed wrapping paper and any amount of money but it is still manure.
Worried about paying a £20m interest bill on your tax?
ReplyDeleteWant to keep the thugs from the door?
Have a look at "Sound & Fury" on
P.31 of Private Eye's current issue. It refers to the content of the NAO report on HMRC's "resolution of tax disputes"
there is more than a whiff of odure around HMRC these days.
"The time it takes HMRC to process paperwork is a problem. The only people who don't see it as a problem is HMRC staf f. Still, when more of you are signing on maybe you will get the point."
ReplyDeleteHMRC receives hundreds of thousands pieces of correspondence per week.
When more of us are signing on maybe you will get the point.
"HMRC receives hundreds of thousands pieces of correspondence per week."
ReplyDeleteAnd I bet most of it is complaints about other paperwork not being dealt with in a timely manner.
@23 July 2011 22:34
ReplyDeleteHMRC has the same amount of time to deal with paperwork after the end of the year as taxpayers do if I'm completely honest with you.
@23 July 2011 16:37
ReplyDeleteDeterminations are usually charged to people who haven't submitted their return for several years.
Let's break this down.....
ReplyDelete* Once a year HMRC is required by law to ask a subset of individuals (about 1/5 of the population) to submit a return of their income.
* As a result of legislative changes, those who submit a paper return are given nearly 7 months and those who file online are given nearly 10 months from the end of the tax year.
* Because of the emphasis towards filing online, less staff are employed to process the remaining pzper returns.
Someone comes on this site and complains that theirself assessment return was processed on time but took three months to do so....
Sorry, but if you lived in America you would be required to submit, calculate and pay the tax within 4 months and 15 or so days from the end of the tax year (depending on whether is was a weekend) and if the IRS found a mistake you would be forced to pay the extra.
They operate on a 1 in 2830 per citizen employee ratio as opposed to a 1 in 700-odd here. They cannot afford to nanny the people who get it wrong and have a penalty scheme which says so..
"Someone comes on this site and complains that theirself assessment return was processed on time but took three months to do so...."
ReplyDeleteIt was not a complaint but a point about how problems could arise from the time you take to process paperwork.
Maybe it is time for you to look for a new job as your current one seems to have made you think that everyone is moaning at you.
I see that the odd "5th Columnist" or PPID* have established themselves quite cleverly.
ReplyDeleteMust be hoping for a nomination award since there are no longer fiscal bonuses?!
To repeat, no-one in their right mind would argue against the basic principle of getting your return and any remittance due on time.
Where the problems arise are those created by HMRC i.e. inability to process mail efficiently, inability to update records in a timely manner, automatic debt collection action based on flawed information i.e. chasing a debt that is not due, or on which a time to pay agreement has been agreed - all of which have been shown to have happened repeatedly.
Yes, there is a need to enforce that which is owed, but this must be done legally and correctly, how this will improve with a 3rd party, privatised debt collection system in the future beggars belief.
It is doubtful that the system will be able to cope and if the responsibility to prove the case is placed upon the customer things will get worse. Doorstep arguments with the production of recorded delivery receipts, copy returns - what right have the 3rd party to view tax-payer confidential data?
Proof of payment - again, what right have the 3rd party to view this?
And then there is the on-line submission - print page and shove it under their nose or what?
We are doomed I tell ye!
*Pacesetter Practitioner In Disguise or management Toadie!
;)LOL
I am sure there is a procedure where an individual or business can contend payment if it can prove that the payment has been made e.g. bank statement, e.receipt or whatever as long as the "evidence" proves that fact then any attempt to enforce a debt that does not exist is a criminal act akin to extortion surely?
ReplyDeleteIs there someone out there who is versed in the laws of distraint, and I don't mean any HMRC "muppets", I mean someone who knows what they are talking about.
On a slightly seperate issue, the 103rd have to abide by the law of the land, don't they?
I know what I'm talking about. If you can PROVE you have paid your tax, no-one will attempt to collect that debt. Simple. How do I know? I'm the HMRC muppet on your doorstep. Been doing this for 20+ years. Suspect I may know a bit more about this than you, in all modesty.
ReplyDeleteI do obey the law. Trouble is, like speed cameras, some people just don't like it.
NB. @ 14.18 22 July. Not a lie. Originally written a year ago. True then.
22 July @12:13
ReplyDeleteYou are a completely deluded cretin. HMRC do not wonder around randomly demanding money which is not due. You are full of your usual bluff and bluster -I can only imagine you came home from school early one day, and caught your mum shagging a tax inspector. Write to your MP now, cock end.
@26 July 2011 22:15 & @27 July 2011 08:47
ReplyDeleteWhy are you getting so worked up about people stating HMRC try to collect debts that do not exist, when it has been shown time and time again this is the case.
Ken, put a blocker on 08:47 neither side wants that sort posting!
ReplyDeleteAs for HMRC not breaking the law WRT debt enforcement, many people will beg to differ and the recent past track record of HMRC farces proves they do break the law.
Another one can't see the wood for the trees.
"Ken, put a blocker on 08:47 neither side wants that sort posting!"
ReplyDeleteWhy not? it shows their cage has been rattled.
HMRC is shit they dont know there head from there arss
ReplyDelete