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.

Wednesday, 10 July 2013

HMRC Loses 60% of VAT Penalty Appeals

The Tax Assurance Commissioner's annual report indicates that 60% of HMRC's decisions in VAT penalty cases are cancelled upon appeal.

Of 30,345 cases, HMRC's decision was overturned in 18,317, 60%, in 2011/12. Of the remaining 12,028, some 9,785 HMRC penalties (32%) were upheld the remaining balance of decisions varied upon appeal.

Jason Collins head of tax of Pinsent Masons is quoted by AccountancyAge:
"HMRC is operating under a lot of pressure to increase its revenues across the board, but this pressure is particularly acute in VAT. The NAO report highlighted the huge difference between the VAT HMRC believes it should be collecting, and the amount it actually does receive.

The fact that HMRC loses 60% of the penalty cases that businesses appeal shows that it may have become over-aggressive in hunting for cases of VAT evasion, and is making errors in issuing penalties. HMRC is also too quick to say a taxpayer has been negligent when it gets things wrong.

Unfortunately, it seems that thousands of UK businesses have been forced to challenge unfair fines as a result."
A spokesman for HMRC said:
"Only a small proportion of the millions of decisions HMRC makes each year are challenged. The review and appeal system provides a quick and easy way to resolve disputes.

Where we change a decision it is often because our customer has given us new information: for example, a reasonable excuse for their tax return being late, or fresh evidence to support a claim."
It is unfortunate that fresh evidence/reasonable excuses only seem to come to light during the appeal, as this wastes the time a resources of both the taxpayer and HMRC.

Tax does have to be taxing.

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1 comment:

  1. The penalties system is so time consuming and cumbersome (and the process has been continually changed and confused since its installation) that errors will happen. Fact. Constantly reduce staff + add more pressure + increase bureaucracy + add a system that is counter-intuitive= mistakes.

    There should be no gloating from either side on this one, though. The accountancy side had a large input into the 2009 legislation change, and HMRC management hasn't covered itself in any glory over the inept delivery to its staff or the public of the new processes.

    The laughable fact over the whole matter being that these penalties were installed to enhance consistency, but the reality being they are even more warped than what was there before.

    A waste of money, a waste of time and another easy kick at HMRC staff- some who deserve it, but most who are just struggling against the tide of ineptitude they are being asked to deliver.