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.

Tuesday, 3 January 2012

Spot Checks

The New Year is upon us, and already HMRC has been flayed by certain MPs and the Federation of Small Business (FSB) for harassing small businesses.

The cause of the outpouring of ire are the plans drawn up by HMRC for conducting spot checks on the paperwork, going back several years, of up to 20,000 firms as from April.

Ironically, as per an article I wrote in September, the original target was 50,000:

"HMRC have reduced their target for checking business records down from 50,000 to 20,000.

However, for reasons best known to HMRC, they are describing this reduced target as an "extension" of the scheme.

For good measure they also claim that the record checks are in the businesses best interests

Anyhoo, 20,000 or 50,000, failure to provide HMRC with the information that they require may give rise to a fine of up to £3K.

John Walker, national chairman of the FSB, is quoted by The Independent:

"Despite the worsening economy, HMRC is launching this scheme regardless of the consequences.

We have spoken to HMRC and expressed our concerns about this a number of times. But as far as they and ministers are concerned it is a policy aim to make this happen.

There is a huge difference between the rhetoric of the Government about helping small businesses and what it is doing in reality."

Priti Patel MP is quoted:

"This is the persecution of small businesses at a time when they are already facing a very, very hard time. The attitude of HMRC to small businesses is frankly disgraceful when they are blatantly doing deals with large firms which have allowed them to escape millions of pounds in tax liabilities."

Interestingly, according to a spokesman,  HMRC appear to be backtracking on the plans:

"HMRC recognises that the launch of the Business Records Checks pilots has caused considerable concern to the tax profession, and that the project would have benefited from more detailed consultation with tax professionals at an earlier stage. 

In the light of these concerns, HMRC will undertake a strategic review of the project, in consultation with the professional and representative bodies.

The findings of the review will be shared with representative bodies in January 2012, and final decisions will be made by HMRC before the end of the current financial year."

Let us see if that gets anywhere.

Notwithstanding the above, the politicians would do well to remember that as they are responsible for tax legislation, HMRC's budget and the senior appointments to HMRC, they are ultimately responsible for HMRC.

Tax does have to be taxing.

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  1. Why is this suddenly news, when as you say it was announced months ago and indeed the whole thing is subject to review following representations from the professional bodies.

    Do keep up, FSB and MPs.

  2. This "check" depends on which head of duty. I'm thinking SA - which has the mantra "capture now, check later". This has been in place since 1996-97 SA returns. As HMRC can go back 6 years to check SA returns, but can only act on the last 3 or so years (tops), this isn't NEWs but OLDs.

  3. Here's an alternative view:

    "Editor’s Note: We now have two sets of rules going forward for neofascist societies in a New World Order. Firms like Goldman Sachs will continue to be given a waver because of the influence they wield over the economy and members of Congress and Parliaments world wide. In 2012, as government budgets swell and bureaucratic costs continue to eat away at the public purse, the establishment will use this crisis to target the small firm and business person in order to recoup their ever illusive bottom line. In addition to targeting the little man, look to authorities to further clamp down on cash transactions and cash wages. In this way, the ruling classes hope to re-order the economy into a cashless plutocracy, where only a handful of large corporations may survive without paying significant taxes and being allowed to count their balance sheet liabilities as assets."