Tax Investigation Insurance - Taxwise

Professional Cover Against the Threat of Costly TAX & VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute. The Policy has been designed to combat the costs and inequities of undergoing the ever-increasing number of HM Revenue & Customs random investigations.

Taxwise Coverage

The standard cover provides representation costs by registered accounting practices on your behalf, for up to £75,000 in any one claim, arising from:

-Income Tax Self Assessment full enquiries
-Income Tax Self Assessment aspect enquiries (if this option is selected)
-Corporation Tax Self Assessment full enquiries
-Corporation Tax Self Assessment aspect enquiries (if this option is selected)
-H M Revenue & Customs VAT disputes
-Employer compliance disputes PAYE/ P11D/ NIC
-IR35 disputes
-Now covers business's with an annual turnover of up to £10 million

To find out more, please use this link Taxwise

Tax does have to be taxing.

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

A Very Bad Step

Much is made by those "in charge" of HMRC, and by Brown and his henchmen, of the restructuring and rationalisation of this mighty organ of the state.

However, those that actually work for it, interact with it and various MP's are not so impressed with the handling of "Smiler" Brown's conglomeration and reorganisation of Customs and Revenue.

Grantham Quentin Davies MP has expressed his disappointment at the response that he has received from the Government to his protests against the closure of Grantham's tax office.

HMRC staff from the office in Castlegate have been told that they will be relocated to Lincoln, or offered jobs in other offices as part of a restructure of the organisation.

The move will begin in Spring next year.

Treasury minister, Jane Kennedy, confirmed to Mr Davies that the plans will go ahead and assured him that the changes would have minimal effect on taxpayers.

As I have said before, many people prefer being able to talk to a friendly helpful member of HMRC face to face; rather then entangle themselves in the morass of the pig's breakfast of the HMRC website, or hang on the phone for hours as they attempt to access an expert at the HMRC call centre.

Mr Davies agrees:

"By far the worst aspect of the plans to close the Grantham tax office would be that taxpayers, individuals and businesses would have to travel to Lincoln to consult with HMRC. 11,000 callers were received in Grantham in 2006-07 and this service must continue.

The chances of honest mistakes in accounting for tax are greatly increased if there is no opportunity for face-to-face meetings between the taxpayer and the Revenue of Customs and Excise.

This would be a very bad step in the interests of both sides."

I agree, much like the banks that have shut local branches and fired branch managers (as they don't give a stuff about their customers), this is a retrograde step that is not in the interests of the taxpayer.

Government, especially "Smiler" Brown's administration, does not give a fark about the taxpayer (aside from viewing us as a hapless cow to be milked dry for every penny we have).

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

The Nearly Man - Always The Bridesmaid

Regular readers will doubtless recall that I have on numerous occasions referred to "acting Chairman" of HMRC Dave Hartnett as being the "nearly man", always the bridesmaid but never the bride.

Indeed you will also recall that I have asked on several occasions why it is that the "acting" part of his title has not been removed, or at the very least he is replaced with a more permanent person.

Well, it seems that those "in charge" of HMRC have been reading this site and have finally taken my advice.

Ladies and Gentlemen it gives me great pleasure to inform you that Dave's "nearly man" days are at an end, up to a point; he is no longer "acting chairman" of HMRC.

HMRC have announced a new chairman, Mike Clasper who was once CEO of BAA (a "world class" company, massively in debt, providing "world class" facilities at Heathrow et al).

What, I hear you ask, is to become of Dave Hartnett?

He will become....wait for it....

Cue a roll on the drums!!



Acting Chief Executive, whilst HMRC look for someone else to fill the role on a more permanent basis.

Farking hell, is there no limit to which HMRC is prepared to humiliate this man?

Is there any limit to the amount of humiliation that Dave is prepared to endure?

Below is the full text of the announcement, and Q&A article, which appeared on the HMRC Intranet site yesterday.

I draw your attention to this particularly fine piece of prose contained within the Q&A article:

"Did Dave Hartnett apply for either job?

We don't announce applicants, only outcomes. Dave will become the acting CEO as soon as the new chair takes up appointment."

There you have it in black and white, if Dave applied for Chairman he failed and is being shunted from pillar to post; always the bridesmaid never the bride.

There are two questions that I must ask:

1 Did someone actually get paid for writing this (the announcement/Q&A article) pile of shite?

2 Did someone in "authority" within HMRC actually approve this pile of shite before it was posted on the intranet?

I assume the answer yes, applies to both questions. In which case it seems proven, beyond any doubt whatsoever, that HMRC senior management are completely clueless. My sympathies are 100% with the people who have to work there, it must be hell on earth.

Oh, how careless of me, I almost forgot to mention this.

Clasper left BAA in 2006 with a pay, pension and share package worth £10 million. Clasper can expect to be paid for his 3 days a week at HMRC in line with a permanent secretary salary scale of between £139,740 and £273,250.

**********

The Prime Minister has announced the appointment of Mike Clasper as chair of HMRC following an open recruitment process.

Mike will oversee the Department's strategic direction, play a lead role in continuing to strengthen HMRC's corporate governance and drive forward engagement with its many stakeholders.

He will take up the post on 1 August, working three days a week, and will be involved in the selection of HMRC's first chief executive - who will take charge of the Department's day-to-day business.

Dave Hartnett will become acting chief executive until the selection process has been completed.

Mike said: "HMRC plays a vital and unique role in the life of our country, its work touching every individual and business. I want to see HMRC in the vanguard of public service delivery, providing a top quality and reliable experience for all of its users.

"That is what those who work in HMRC want and I'm determined that working together we will achieve that goal."

Mike joins HMRC from Terra Firma Capital Partners Ltd, where he was an operational managing director. He was formerly chief executive at BAA plc.

Alistair Darling, the Chancellor of the Exchequer, said: "Appointing someone of Mike's calibre and experience is particularly important at this point in HMRC's development and I am delighted he has agreed to take on the role. Mike will bring the leadership and vision needed to deliver on HMRC’s goals of providing an enhanced service to all of its customers across the UK."

Welcoming Mike to the Department, Dave Hartnett said: "It has been an honour to serve as acting chairman and I look forward to helping build on the progress we've made so far."

Q&A

**********

What is the role of the chair?
His role will be to strengthen HMRC's corporate governance and to provide oversight to the executive committee and departmental board. In addition, he will play a key role for HMRC by engaging with the Department's many stakeholders.

Key aspects of the role include:
Ensuring that HMRC has a clear strategic direction, which reflects ministers' priorities, is consistent with the resources made available by Parliament and enables the organisation to maximise the revenues properly collected and improve services to its customers.

Together with HMRC's board, to develop the strategy, holding the chief executive and senior executives to account for delivering that strategy and for the organisation's performance.

To oversee and ensure the highest standards of corporate governance, which means there are clear roles and responsibilities for all staff within HMRC and that the right cultures and behaviours exist to help deliver our objectives.

By providing leadership to the board; taking responsibility for the board's composition and development; ensuring good information and analysis for the board; and planning and conducting board meetings effectively.

Along with other members of the board, to hold the chief executive and senior executives to account for the delivery of HMRC's strategy and for the organisation's performance in meeting the targets set by ministers. To play a strong representational role, with ministers, Parliament and key stakeholders, including explaining HMRC's strategic direction to them and to its own staff; and to win their support for, and commitment to, that strategy and the resources required to carry it out.

Appear before select committees to give evidence about the strategic direction of HMRC and governance issues.

The role is part time – how part time?
The post will be 3 days a week.

What level of salary is he getting for this part time post?
His pro-rata salary for 3 days a week is commensurate with that of the most senior civil servants

Why is he only working part time - who is in charge the rest of the time?
The role of chair is to assure delivery of the departmental strategy. It is not to run the business; that is a full time job. The day-to-day running of the Department is the responsibility of the chief executive and the executive team. Chairs of huge and complex multi-nationals in the private sector with this kind of assurance role are frequently part-time.

Why is a part-time chair appropriate for an organisation dealing with "hundreds of billions" of pounds?
Because he will oversee the delivery of the departmental strategy. It is not to run the business; that is a full time job for the CEO. Chairs of huge and complex multi-nationals in the private sector with this kind of assurance role are frequently part-time.

What will he do on the other two days a week?
Mike Clasper is a non executive director of ITV plc, a position he will retain. He is also chairman of the West London Consortium, a body aimed at improving employment and skills services to residents and employers.

What is his CBE for?
Mike was awarded a CBE in 2005 for services to the environment. He led an all-industry taskforce on packaging waste, among other activities.

Will he be retaining his non executive directorship with ITV?
Yes

What about the conflict of interest?
As chair of HMRC, Mike is bound by the rules on avoiding conflicts of interest as set out in HMRC guidance. This means he has to take all possible steps to protect himself and the Department from allegations or perceptions of impropriety. He has to give priority to the role of HMRC chair over any past or present associations with any other businesses.

Will we ensure that the new chair and chief executive have never been involved in tax planning/avoidance/evasion?
The successful candidates will be of the highest integrity. There is no question anybody appointed to the posts could bring the Department or their own personal integrity into question.

Will they have to open their financial affairs to scrutiny?
They will be subject to the same checks designed to ensure financial propriety as any other member of HMRC.

Why do we need two people to run the department when we only had one before?
Only one person will be running the department; the chief executive. The chair's role will be to provide strategic leadership and oversight. This is in line with the recommendation in the HMRC Capability Review that we should consider separate roles for a chief executive and chairman.

How can a chair with no experience of HMRC run a tax collecting department?
This is not a question of running tax collection. The role is to ensure HMRC sets the right strategy in line with ministers' priorities and delivers it. Mike has been appointed on the basis of his extensive leadership skills and experience.

Will the chair be directly employed by HMRC/the Civil Service?
The chair will be a civil servant.

Will the chair or chief executive be a commissioner?
This is yet to be decided.

Why were the jobs not advertised and appointed together?
It is sensible that the chair is involved in the selection of the chief executive

When will the CEO appointment be confirmed?
The CEO competition is ongoing and an announcement will be made in due course. The current expectations are that this will be in September, giving the chair time to get to know the organisation before the final selection is made.

Did Dave Hartnett apply for either job?
We don't announce applicants, only outcomes. Dave will become the acting CEO as soon as the new chair takes up appointment.

Tax does have to be taxing.

The New Statesman, Britain's leading political magazine is delighted to announce that HMRC Is Shite has been nominated for a New Media Award in the category of Campaign For Change. The campaign for change award will go to the individual or organisation that has most effectively influenced opinions and behaviour through the use of new media technology. The winner of this award will champion a cause and provide information and tools to instigate change.

The full press release can be downloaded here.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

All Are Created Equal....

In his book "Animal Farm", Orwell wrote about how the pigs, once they had come to power, changed the rules of the game and introduced a new policy wrt equality:

"All animals are created equal, but some animals are more equal than others".

Clearly those in charge of HMRC are fans of Orwell, and have used the example set by the pigs in formulating their rules wrt expense receipts for taxpayers and HMRC staff (who are also taxpayers).

HMRC staff (all 83,000 of them) do not have to submit receipts to cover claims ranging from meals to hotel accommodation and travel, and are entitled to expenses without actually paying out any money.

They can claim £100 for an overnight stay in London, and £20 for an evening meal while working out of their office without handing in receipts.

When out of their offices for more than five hours, they are entitled to a £6.50 meal allowance and a two-meal allowance of £14 when away for more than 10 hours.

Night work or sleeping in offices on call or standby after a day's work is worth £7.60 a night, while sleeping in the office after working late provides £10.90 a night.

Drivers can claim 5p a mile for each passenger they carry, while passengers themselves are entitled to a similar 5p allowance even if they do not pay anything for the privilege.

Staff can also choose to stay with friends or relatives, rather than at a hotel when working away and can claim £25.

There is nothing wrong in principle with any of the above, it is perfectly correct that staff should be reimbursed for out of pocket costs. It is also perfectly reasonable, given the difficulty of obtaining receipts for some cost items, not to expect a full/auditable record of every penny spent to be maintained.

Fair enough!

Except that there is one small fly in HMRC's ointment.

Can you guess guess what that is?

Yes, that's right, the rules that apply to HMRC do not apply to the rest of us.

We are expected to provide receipts for all expenses claimed against taxable income.

Doesn't that strike you as being a little bit unfair?

The other rather interesting aspect of this matter is that HMRC have been trying to hide its expense policy from the taxpayers. It required UHY Hacker Young to use the Freedom of Information Act to discover details of the expenses regime.

Clive Gawthorpe, a UHY Hacker Young partner, is quoted in The Telegraph:

"Accountants who frequently face challenges over expenses for as little as £10 will find it ironic that HMRC runs such a liberal 'no questions asked' system for its own employees."

HMRC, according to Mr Gawthorpe, is also desperate to try to keep this policy secret from the rest of us and was urging its employees not to publicise rates and allowances.

Is this unfair?

In the eyes of HMRC it is perfectly fair, they believe that:

"All taxpayers are created equal, but some taxpayers are more equal than others."



Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Big Brother - HMRC's Licence To Bug

Orwell's view of the totalitarian state that monitors our every spoken word, written word and action came closer to reality last week, when our good old friends in HMRC were granted the right to bug our phones and intercept our email if they suspect us of tax fraud.

HMRC, on top of its power to arrest people, can now intercept phone calls, emails and letters, as well as bug residential premises and private vehicles.

HMRC see nothing to be alarmed about, as they calmly state:

"Customs officers have always had these powers because of their criminal investigations into drugs and guns.

Now they will be granted across the board. We could use it purely in tax matters. Tax offences are quite often combined with other forms of criminality."

HMRC promise that all surveillance will be conducted in compliance with the Regulation of Investigatory Powers Act and the Wilson Doctrine (which we know was brazenly flouted with the revelations that police have been bugging protected conversations between suspects, MPs and their lawyers).

HMRC will also be subject to checks by the Office of Surveillance Commissioners and the Interception of Communication Commissioners Office.

Therefore, why should we be worried by this development?

Here's why you need to be very worried:

1 The Wilson doctrine, as already stated, has been breached.

2 HMRC will not need to seek external authorisation for any of its surveillance activities.

3 HMRC has not drawn up any code of conduct for how it will use its "exciting" new powers.

4 In 2005 explicit assurances were given that the merger of the Inland Revenue and Customs and Excise would not give rise to an alignment of powers. These assurances have been broken.

5 HMRC will act as judge, jury and executioner. Due process, as required for other aspects of law enforcement by other organs of the state, will not be followed.

6 HMRC is massively incompetent (eg datagate, tax credits etc), they cannot be trusted with such powers.

7 There is no evidence to support the need for extending HMRC's already excessive powers.

Am I alone in finding that thought of HMRC being given such powers to be more than a little worrying?

How can we trust the government, or HMRC, not to misuse these new powers?

I would note that they can bug anyone, on the slightest suspicion of tax fraud/evasion. HMRC will be the judge as to what constitutes reasonable "suspicion".

Given that, under Gordon Brown, HMRC is being used as a tool of the state to impose its political will (eg the erosion of the right to avoid paying tax) there is a very clear and present danger to our liberties with this extension of HMRC powers.

Harry Travers, partner at law firm BCL Burton Copeland, is far from impressed. He is quoted on AccountingWeb:

"It seems clear to me that HMRC used the merger to push for greater powers.

There is no evidence that bugging powers are needed in relation to direct tax fraud, and HMRC did not even attempt to provide any."

I would also remind you that some Customs and Excise prosecutions have collapsed in recent years, due to the abuse by officers of their powers.

The prosecution for Operation Venison, which led to accusations of VAT fraud for five Manchester businessmen three years ago, fell through due to "muddle, incompetence and lack of frankness" said Mr Justice Crane.

Can HMRC be trusted not to misuse these powers?

No, they can't!

Every email, conversation and phone call by anyone can now be listened to by HMRC (ie the state).

This is wrong.

It is now necessary for the public to take a stand against the state, and to ensure that these powers are revoked at the earliest opportunity.

In the short term I recommend that people equip themselves with anti bugging devices, and ensure that their emails are encrypted.

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com) is brought to you by www.kenfrost.com "The Living Brand"

Data Laws May Have Been Breached

Unencrypted discs with 25 million Child Benefit records on them were handed to an accountancy firm by government auditors, it has emerged.

The National Audit Office (NAO) gave the CDs - similar to the ones lost by HM Revenue and Customs (HMRC) officials - to accountants KPMG for auditing.

It said the discs - with bank account details on them - were delivered "by hand" to KPMG and returned safely.

The Information Commissioner is probing whether data laws were broken.

A spokesman said the commissioner would be looking at "all aspects" of data protection surrounding the missing Child Benefit records as part of its investigation.

Source BBC

The HMRC has been remarkably cavalier with people's data. Do they have any concept of the risks posed by distributing private data to all and sundry?

Life of Misery Inside HMRC

Former employees of under-fire HM Revenue and Customs service have contacted the BBC News website to describe life inside its offices.

The news that the details of 25 million recipients of Child Benefit payments have gone missing has shone a spotlight on HMRC.

The agency collects and administers direct and indirect taxes; and pays and administers Child Benefit, Child Trust Fund and Tax Credits. It is also responsible for environmental taxes, enforcing the National Minimum Wage and recovery of student loans.

Formed in 2005 following a merger between HM Customs and Excise and the Inland Revenue, it has proved controversial since its inception.

But now it faces intense criticism after junior officials were blamed for sending computer discs with personal details of all UK families through the post - only for the discs to disappear.

Speaking anonymously - as they have signed the Official Secrets Act - two workers who recently left HMRC - have told the BBC News website that they were not surprised to hear of the blunder.

Worker A, who left after more than 10 years' service, said: "I wasn't surprised in the least when I heard the news.

The problems with Child Benefit are only the tip of the iceberg.

"Morale is non-existent. Mistakes happen continuously. Rooms full of unopened post are not uncommon."

Following the 2005 merger, the agency is now governed by a board made up of a chair, eight other executive directors and five non-executive directors.

Critics and unions complained that combining two distinct organisations, with very different cultures and legal powers, was always going to be a difficult task.

The government has targeted job cuts of 12,500 from the 100,000-strong workforce.

"When the merger was introduced, job duplication meant that many experienced people were made redundant," worker A said.

"So we lost many of our best people.

"Others were moved from pillar to post, and the experience hit morale even harder.

"The lowest paid were all laid off, and all of their workloads were added to everyone else's."

He complained that after a system called "lean processing" was introduced, jobs were divided up into their individual parts - every aspect was dealt with separately, and no-one has overall ownership or responsibility for the task, he said.

"Arbitrary, individual hourly targets meant that people cut corners," he added. "It doesn't matter if you make mistakes because you won't be held accountable."

Worker B, who was in a middle management post before he left in 2006, also claimed the merger of HM Customs and Excise and the Inland Revenue negatively affected the way the departments worked.

"There was the move to using call centres, which meant that people didn't take personal responsibility any more," he said.

There were all sorts of closures of offices going on and all those sorts of things had a domino effect.

There were additional targets - stretching targets - with reductions in staff, especially experienced staff, which really didn't help the cause."

He said he would lay the blame for the current problems "primarily at the politicians' doors".

"This is a top-down matter - due to the target-driven, staff-reducing culture."

Source BBC