Wednesday 8 October 2014

Death and Taxes - HMRC's Bespoke Approach

Irrespective of the fact that people pay taxes during their lifetimes, the state still requires its pound of flesh when they die.

However, although it won't cut the taxes due, HMRC is going to cut down on the amount of information it requires for the bereaved to reclaim tax or pay tax when someone dies.

In 2012, HMRC gave a commitment to improve its service for bereaved taxpayers. 

One of the main changes will make relates to form R27, which is for reclaiming tax or paying tax when someone dies. The FT Adviser notes that of the bereavement calls received by HMRC, 34% were about filling in the form and 15% were to get an update on the progress of the form.

HMRC, in an effort to free up its phone lines, will now use real time information to obtain all the pay and tax information it needs from bereaved taxpayers, making the form R27 unnecessary and ready for removal on 13 October.

For PAYE taxpayers, there will be an automated process, and for self assessment taxpayers there will be what HMRC calls “a tailored service,” which includes letters that match the individual’s circumstances.

According to HMRC, removing the form means taxpayers will get their tax affairs sorted quickly and need to contact it less. That of course is only true if the data used by HMRC is accurate.

As the old saying goes, there are two certainties in life death and taxes!

Tax does have to be taxing.

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  1. As far as I know, no-one actually working on the front line in Personal Tax was asked about this change - the first we knew was when the big announcement about it was made to us a few weeks ago.
    We know that this is going to be another balls-up. Even if the RTI data could be relied upon (and it can't - tens of thousands of people have recently had tax calculations for last year which are way out because either their employers or pension companies have supplied the wrong data, or the system has failed to handle it properly), then what about non-PAYE income which doesn't fall into Self Assessment, like savings interest or dividends? Not taken account of at all as far as we can see. The bereaved are likely to be ripped off all over the place through this. And why? So that Excom can cut more front-line staff, save their OBE's and go to the next prayer meeting?

  2. From what I saw of the management they would make cadavers seem animated, as big a bunch of tw@ts that you are ever likely to come across in the public sector. Excom exist in a twilight zone told what those beneath them think they want to hear and so far from reality at the workface they might as well be on another planet.
    RTI has failed and the powers that be know it, it will be one of the most disastrous cock-ups that the Civil Service has been responsible for, nothing connects and as the previous poster states the data is incorrect, out of date and frankly totally wrong.
    Revolving doors revving up, excuses being prepared, eject, eject, eject!