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, 17 January 2018

HMRC Investigating Over Half of Britain's Largest Companies

HMRC investigations into large companies took 34 months on average in the year to the end of March 2017, up from 31 months in the previous financial year.

Pinsent Masons, the law firm that obtained the data, said the figures reflected HMRC’s increasingly aggressive approach to tackling corporate tax avoidance and a growing unwillingness to cut deals with large companies.

Ian Hyde, a partner at the firm, is quoted by the FT:
HMRC is digging its heels in and not backing down, even when there is a sensible settlement to be reached. Giving businesses certainty over the legal and tax environment is an important part of a smooth-running economy. Leaving these investigations open for three years at a time does not help that.
I was surprised at the HMRC response, wrt how many companies they investigate (spoiler alert over half the UK's largest businesses:
We subject large business to an exceptional level of scrutiny. At any one time, we will be actively investigating more than half of the UK’s 2,100 largest businesses."
Now, that either means UK businesses are inherently dishonest/incompetent; or, HMRC thinks that they are inherently dishonest/incompetent.

Tax does have to be taxing.

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  1. Or HMRC are increasingly launching ill considered and often baseless investigations that they then progress at a snails pace and can't/won't shut down because having dragged something out for three years it is hard to explain it all turned out to be little more than a fishing expedition gone wrong.

    And just don't get me started on the utter paralysis that surroundz VAT PE methods. An utter disgrace

  2. Investigations or enquiries?
    Not sure they have enough investigators let alone disclosure officers to handle that many investigations, let alone secure storage for all the evidence uplifted.

    WRT to VAT PE, what happened to all the PELO's? (These liason officers were local additionally trained and resourced 'experts' in the minefield of partial exemption interpretation and legislation).

    VAT, a simple tax...

    Still, always look up on the website anything to do with complicated tax issues, err, maybe not, they won't put it on its too complicated!

  3. From the POV of a large corporate, an investigation and an enquiry amount to much the same thing: cost and uncertainty. Only variable is the degree of misery ultimately attached.

    Particularly infuriating are requests for information already provided and laughable arguments based off basic ignorance that are stubbornly maintained despite all evidence to the contrary.

    Locked into an elephantine internal Governance process, these cases lumber on creating a vast backlog that hinders the ability of HMRC's limited resources to address more productive cases.

  4. After the catastrophic "settlements" handled by a certain person with Goldman Sachs and Vodafone, perhaps they now take the polar opposite approach.

  5. Even on SME traders everything dragged out as long as possible involving every "head of tax " as apparently C and E were slipshod and time spent equals thorough of course...Idoubt whether a partner in a law firm is an expert on investigations in to large companies and investigation is a meaningless term without specifics. My experience in HMRC was that large companies were given a "light touch " via Customer relationship managers who wanted an easy life /job with their assigned company .My own experience was also that government ministers were also involved by large companies if you were too serious about actually collecting money . With reference to PE , have you ever noticed that companies never submit a method which results in more tax payeable because the standard method does not give a fair result ?HMRC may have feet of clay but top 4 firms make plenty of money out of ludicrously complicated methods which are often virtually impossible to audit eg housing associations etc

    1. That because arriving at a fair and reasonable method will invariably involve subjective judgements which HMRC appear now incapable of making without the leaden Governance burden of the post alleged dodgy deal environment.

      Nothing happens apart from delaying tactics, which is obviously a war of attrition.

      Trouble is bluff is increasingly being called by "see you in court" from very annoyed corporates, some of whom dont want to but are left with the clear impression of having no other option, having suffered deliberate obstruction and total intransigence

    2. No , thats because "fair and reasonable " is a an oxymoron as far as the accountancy industry is concerned- i had over 24 years experience dealing with Vat and multinationals , and court action was invariably instigated by accountantcy firms against an organisation too stupid to claim costs at tribunal .Ileft HMRC because i was tired of dealing with managers who had no commercial awareness or interest in tax .With reference to the "annoyed corporates " their tax avoidance is rampant and HMRC have neither the staff nor the willpower to act .

    3. Its probably just as well you left HMRC as last time I looked Tax Avoidance was the legal use of the tax regime to reduce the amount of tax that is payable by means that are within the law. 

      All large corporates are, oddly enough, pretty much obliged to do that.

  6. The former IR and HMC&E Departments were historically old-style Civil Service manned and led organisations with accountibility and responsibility along with integrity supporting the enshrined ethics of impartial service.

    Then along came modernisation, computers, common tariffs, common markets and common purpose.

    The net result is what you see, a clusterfeck of gargantuan proportions led by misfits with no acumen, business or otherwise, and middle-managed by lunatics keen to support all that tumbles downward.

    It simply reflects all that is around us, be it Government, public 'service' or private 'enterprise' aka PFI or woteva!
    When it is not their money that siphons into the swamp the top could not give a shite about what is happening as a result of their dictats.

    One helluva a mess pilgrim, one helluva mess!

  7. With regards to "anonymous" 19/1/18 yes i was glad to be away from views like that -that companies are "obliged " to use the state infrastructure , education for employees , health services whilst serving shareholders and avoiding as far as possible paying for any of it -naive old me collecting tax for services you use but would prefer not to pay for whilst your heroes like Fred at RBS , Phillip Green , Carillion with its 400 million dividend and pension blackhole, all signend of by those same great accounts you no doubt revere that make millions in tax avoidance whilst billing the same paymasters for consultantcy showed ,us how its done .