HMRC Ignored Privacy Breach Warnings

In June 2018 I warned:

"Millions of British taxpayers have had their voices recorded, analysed and stored by HMRC without their consent...

...HMRC could also fall foul of the EU’s new General Data Protection Regulation (GDPR), which came into force last month and requires all organisations to obtain explicit consent from users before they use biometric data, “including voice recordings”, to identify someone.

I assume someone will be reporting HMRC to the relevant regulatory authority? "

Skip forward to the present day and blinky, blonky, blimey...

Oh well done @HMRCgovuk @HMRCpressoffice . Im sure it was another innocent mistake? Not in anyway linked to your complete disregard for the law?

https://t.co/Bj9drT3TTV

— Phil Manley (@pmanley82) May 3, 2019

Well then!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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.

To find out more, please use this link Solar Tax Investigation Insurance



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HMRC Targets Wealthy Scots

Those wealthy residents of Scotland who are toying with the idea of crossing the border to England (via changing the address of their "main" home) in order to avoid paying higher Scottish income taxes (due to commence April 2016), may need to think again.

HMRC has disclosed that it plans to use “external data” to identify Scots who change their addresses and identify “high risk cases such as mobile employees and taxpayers with high incomes.”

In a submission to Holyrood’s finance committee, HMRC also disclosed that it has worked with SNP ministers about getting address information from NHS Scotland records.

HMRC said it believes that 98% of people it has listed as being Scottish taxpayers are “likely” to have been correctly identified as liable for the new rate of income tax.

Needless to say, the idea that HMRC are looking for wealthy Scots has not gone down well North of the Border. Eben Wilson, director of low-tax campaign group Taxpayer Scotland, is quoted by the Telegraph:

“We want transparency on what HMRC is doing as the idea that they are trawling for wealthy people to trap them is appalling – we need more of them in Scotland.”

Association of Taxation Technicians (ATT) has criticised the HMRC guidelines of who will be a Scottish taxpayer as unclear, inconsistent and “extremely subjective”.
ATT has warned that workers with homes on both sides of the Border could register to vote in England to avoid paying higher taxes in Scotland.

HMRC will write to taxpayers in December informing them they will be treated like a Scottish taxpayer and advising them of how to report a change of address. Separately, it will write to those who appear on the electoral register in Scotland but have an address elsewhere in the UK.

“If the Scottish rates diverge from the rates which apply elsewhere in the UK, there will be an incentive for taxpayers to claim that they live on one side of the border, when they live on the other.

HMRC will use external data to highlight changes of address, and identify high risk cases such as mobile employees and taxpayers with high incomes and will undertake appropriate compliance activity to address any risks that arise.”

It plans to cross-reference the addresses given by taxpayers with those provided by employers and the Department for Work and Pensions.

The submission said the cost to the taxpayer of administering the new system will be between £2 million and £2.5 million next year if MSPs choose to keep income tax rates the same as the rest of the UK.

However, this cost increases to between £5.5 million and £6 million if they elect to have a higher or lower rate.

What could possibly go wrong?

Tax does have to be taxing.

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Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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.

To find out more, please use this link Solar Tax Investigation Insurance



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HMRC Trawls The Net

As I have noted several times before on this site, HMRC are keen to identify people who are trading (goods and services) on the internet but not declaring their profits.

As such it should come as no surprise to learn that HMRC intend to up their game wrt collecting data on who is trading but not declaring that they are trading. HMRC are of the view that the hidden economy of internet trading could be worth £5.9BN in uncollected tax each year.

HMRC has launched a consultation on extending its powers to collect extra data from firms and individuals.

"Data can be particularly powerful when it is collected from third parties who facilitate trade, either between businesses, or between businesses and consumers.

This is because they can provide information in bulk about the activity of large numbers of traders, and because third party data can be used as an independent check against the data that taxpayers themselves report to HMRC."

The extended powers would affect businesses acting as intermediaries or providing electronic payment services.

"It is important that the data - gathering powers are proportionate. This means that the administrative burden placed on the intermediary business when preparing and providing the data must be commensurate with the benefit from using the information obtained. HMRC expect that in the scenarios described in this consultation document the administrative burden will be relatively small. HMRC would provide guidance and give support to ease the process."

In theory whatever happens in the future, wrt new payment methods will be covered by the legislation:

"HMRC propose s that the legislation is “future - proofed” so similar data can be requested from new business models as they emerge."

Theoretically HMRC will not target individuals who sell personal possessions, only businesses that fail to pay tax owed.

Those who were tax compliant "should see little or no impact".

The consultation runs until 14 October.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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.

To find out more, please use this link Solar Tax Investigation Insurance



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"

HMRC Promises Not To sell Tax Data

The Register reports that HMRC has promised not to sell any taxpayer data to the private sector, only "share" it.

 "No final decisions have been taken, but HMRC remains committed to safeguarding taxpayer confidentiality," El Reg was told by an HMRC spokesman.

HMRC would only share data where this would generate clear public benefits, and where there are robust safeguards in place. There is no question of HMRC selling data."

He added:

Last year’s consultation made it very clear that there would be a rigorous accreditation process for anyone wanting access to the data and that any access would take place in a secure environment. Those accessing data would be subject to the same confidentiality provisions as HMRC staff, including a criminal sanction for unlawful disclosure of taxpayer information.
HMRC will be consulting further and will ask for views on whether to charge to cover the costs of processing and providing anonymised data. This would not be charging for the data itself, purely covering the costs of providing it.

We understand that the types of "anonymised" data the HMRC could offload includes employment information about citizens who have been in government programmes to help them find a job and housing info to see how certain characteristics might be connected to excess winter mortality rates."

So that's alright then?

Irrespective of the promise not to charge for the data, there is still a way that HMRC can benefit if it it uses its brains.

How?

Simply follow a similar business model to the one that it employs with Cable & Wireless for 0845 numbers, wherein Cable & Wireless earn revenue from the number whilst offsetting part of that revenue against the charges HMRC for providing the phone service.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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.

To find out more, please use this link Solar Tax Investigation Insurance



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 Ongoing Clusterfuck

Loyal readers with good memories may recall that I have written a couple of times before about a loyal reader who dropped me a note concerning HMRC changing her address details (without her permission), and sending her ex husband her tax credit summary for 2012/2013.

The saga continues, and she has sent me a chronological summation of the last 6 months for publication:

"For 6 months I have been battling with HMRC/DWP - here is the chronology of everything that has happened.
----------------------------------
9^thFebruary – XXXX District Council notified me that they had suspended my Housing Benefit Claim as they were notified I no longer lived at my current address. After further investigation they informed me that they had my ex husbands address on file. They were given this information by DWP apparently. I had to 'prove' I still lived at my current address.

17^thMay – Ex husband received my tax credit annual review to his address. I phoned HMRC who were unable to explain to me how this had happened. I wrote a letter of complaint and also put in a Subject Access Request.

22^ndMay – I receive a response from HRMC, with regards to my subject access request and acknowledgement of receipt of my letter.

4^thJune – Ex husband received my NHS Exemption Card to his address

19^thJune – I received a voicemail from XXXX District Council notifying me that they wished to speak to me about my Housing Benefit Claim. When I managed to get hold of them it turns out that they had been notified of an address change again (it turned out to be my ex's new address as he had recently moved again).

23^rdJune – Still no response from HMRC to my original letter (sent on25^th May) so I send a further letter of complaint detailing the further issues.

4^thJuly – Phoned to notify HMRC that my ex husband had yet again received my documents. It turns out his new address was on my file. I updated the address details back to mine and also notified them that my son would remain in full time education from September (thus they would need to update my Tax Credit claim and need to issue a new award notice). I also informed them that I have not yet received a tax credit award for the year.

I took the opportunity to phone Child Benefit to see what address they had on record for me and it turns out that they too had my ex husbands address.

08^thJuly – My ex husband received two more letters from HMRC, addressed to me

10^thJuly – Received documents related to my 'Subject Access Request'

15^thJuly – Received 2 separate copies of the HMRC response to my complaint letter (letters originally dated 28^th June). Letter apologised, gave a brief & generic response to my complaint and informed me that I would receive £100 compensation plus £10 expenses within 21 days.

16^thJuly – Received another (third copy) of HMRC response to my complaint letter

22^ndJuly – 21 days since the date of issue on the response to my complaint letter and as of yet no compensation money has been received.

25^thJuly – 4pm phoned the number provided by HMRC, regarding my complaint response and lack of compensation payment – the phone is answered but hangs up. I phone again, the call is answered by a gentleman who tells me he will transfer me to the right person....'the right' person answers but can't hear me so hangs up. Eventually they then ring me back and apologise as there is a problem with their phone!!

I enquire as to whether there is any further details as to why the address changes keep happening. The lady informs that it is connected to CSA. Seeing as I get no child support from my ex (and NEVER have) this does not add up and I don't feel this makes sense?

The lady looked on my records and can't see why the compensation has not yet reached my account either, they also do not have an answer as to why I have not yet received my tax credit award. The lady could see an award dated 1^st July, but she also notes that on 4^thJuly I called to update the fact my son was continuing in further education and for some reason an updated award notice has not yet been issued.

The lady later phoned me back and informed me that she was having to put through the changes again, as for some reason they had got 'stuck' on the system and wouldn't issue an award.

A further phonecall from the same lady some 10 minutes later revealed that the reason an award notice wasn't issued, was because the information was about a future change, so that would not take effect until 1^st September – then a new award notice would go out!"

Have other loyal readers experienced similar problems, or is this just a one off cock up?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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.

To find out more, please use this link Solar Tax Investigation Insurance



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"

Personal Details

In May I wrote about a loyal reader who dropped me a note concerning HMRC changing her address details (without her permission), and sending her ex husband her tax credit summary for 2012/2013.

She has sent me an update wrt the situation, which she has given me permission to publish, quite shockingly HMRC have managed to do exactly the same thing again:

"My ex husband has moved address....and as a result, yet again HMRC have sent him my tax credits documents. 

When is this nightmare going to end? 

Totally at the end of my tether with it now.

I've still not even received a response to my first letter and on 23/06 I wrote to them again as my NHS Exemption card was sent to my ex, then on 19/06 I received contact from my local housing benefit department to enquire whether I had moved. 

It turns out that they had been notified by HMRC that I had moved out of the area. After a bit of further probing I was able to determine that for the second time, they had been given my ex husband's address again. 

 I'm not sure how much more of this I can take."

Views and comments, as always, are welcome!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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.

To find out more, please use this link Solar Tax Investigation Insurance



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"

HMRC Database Management

My thanks to a loyal reader who dropped me a note over the weekend concerning HMRC changing her address details (without her permission), and sending her ex husband her tax credit summary for 2012/2013.

She has given me permission to post her email, where she asks for advice.

I have suggested that she writes to her MP and considers contacting the mainstream media.

Please feel free to offer advice, or offer suggestions as to how this could have happened.

"I am absolutely livid with HMRC's incompetent service. Today I received notification from my ex husband that he had received my Tax Credit award summary for April 2012 - April 2013. I separated/divorced him nearly 7 years ago. Up until this point in time I have always received the tax credit awards (and related documents) to my home address. The address at which my ex husband now lives is not one I have ever been associated with. Likewise my ex husband has never been associated with my current address either.

I phoned the HRMC to find an explanation for the clear administration error. The ironic thing is, that in order to speak to someone I had to go through a series of security checks, which included providing 'my' address - however I failed this part of the checks because somehow it now had my ex husbands address! Thankfully the call centre operator changed the address back to mine. She spoke to a manager but neither of them have been able to provide me with an explanation as to why or when the address change was made. They cannot see any record of the change ever being made. Also, why was I not notified of an address change?

I do not want my ex husband knowing what I get paid and how much tax credit I get as it's none of his business. I'm mortified No amount of apology can undo this breech of confidentiality and the fact that he now has that information. 

I'm writing a letter of complaint to HMRC but is there any more I can do? 

Anyone else I can go to?"

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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.

To find out more, please use this link Solar Tax Investigation Insurance



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 Taxman's Tentacles

The FT recently published an interesting article "Ten ways HMRC checks if you’re cheating", which highlights how HMRC uses data and tip offs etc to identify those who may be evading tax.

It is worth reading, in fact HMRC also agree that it is worth reading as they have tweeted a link to it. Presumably putting "point ten" of the article into practice:

"10 Fear and guilt"

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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.

To find out more, please use this link Taxwise



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"

HMRC's Head In The Clouds

HMRC have announced that it will be moving data currently stored in local offices to G-Cloud Services (a cloud based storage system), between now and Spring 2013.

A somewhat "challenging" timeframe I would have thought!

The contract has been signed with Skyscape Cloud Services.

As per the company website:

"The Skyscape Cloud Alliance partners; QinetiQ ,VMware, Cisco, EMC, and Ark Continuity bring together an end to end cloud solution which is Skyscape. This Alliance also provides a collaborative resource which drives innovation and our technical product development programme.....

QinetiQ is a FTSE250 company and one of the top 10 largest UK employers of science and engineering graduates. QinetiQ is at the heart of Skyscape and uses its domain knowledge to provide technical advice to clients in the global aerospace, defence and security markets. QinetiQ’s unique position enables it to be a trusted partner to government organisations, predominantly in the UK and the US, including defence departments, intelligence services and security agencies, where its world leading cyber security capabilities raise awareness of and deliver solutions for hacking and malware."

As per Wikipedia:

"In 2007 the National Audit Office conducted an inquiry into the privatisation of Qinetiq to determine whether UK taxpayers got good value for money from the sale. The NAO inquiry looked at the following issues:

• choice of privatisation strategy;
• management of the process (the split of the Defence Evaluation and Research Agency into two, the sale to Carlyle and the flotation);
• costs incurred and the proceeds achieved; and,
• whether the deal met its objectives.

In November 2007, the NAO reported that taxpayers could have gained "tens of millions" more and was critical of the incentive scheme given to Qinetiq managers, the 10 most senior of whom gained £107.5m on a total investment of £540,000 in the company's shares. The return of 19,990% on their investment was described as "excessive" by the NAO. The role of Qinetiq's management in negotiating terms with the Carlyle Group, while the private equity company was bidding for the business, was also criticised by the NAO. Carlyle bought a third of the business for £42m which grew in value to £372m in less than four years."

Here is the HMRC press release in full:

"HM Revenue and Customs (HMRC) has become the first Government department to sign a contract for the delivery of G-Cloud Services over the Public Services Network.

The department has signed a contract with Skyscape Cloud Services for centralised data storage in the G-Cloud. Moving to cloud storage will provide cheaper, more secure and greener data storage for HMRC. It will also enable the department to move forward with its deployment of the Government End User Device Strategy, designed to increase the efficiency of the public sector and improve front-line services.

The contract was awarded via the UK Government G-Cloud framework, which enables the rapid sourcing and deployment of secure, low-cost utility services to the UK public sector. This is the first major service contract to be awarded via the G-Cloud by an organisation as large as HMRC.

For HMRC the change will mean moving data currently stored in local offices to cloud storage between Autumn 2012 and early Spring 2013. This will be the first deployment of G-Cloud services over the Public Service Network, established to improve Government communication links and cut costs.

HMRC's Chief Information Officer, Phil Pavitt, said:

“This change will save over £1 million a year in running costs and will increase reliability and security of HMRC’s internal IT services. The Skyscape contract is a major step for HMRC in moving away from traditional ways of working with large service providers. And it’s a great example of how we’re exploring smarter, more innovative solutions that make life simpler for us and help us provide a better deal for our customers.”

Notes for editors
1. For more about the G-Cloud programme - http://gcloud.civilservice.gov.uk/"

As Barry Murphy, technology partner at PwC, warns in TechWeek:

“Getting the technology in place is just the first leg of the process.  The biggest challenge is the behavioural change that needs to follow.

Too often the failure of new systems is blamed on the technology when more often it’s because people haven’t adapted to them.”

We shall see!

Tax does have to be taxing.



Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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.

To find out more, please use this link Taxwise



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"

Data Migration Issues

My thanks to a loyal reader who sent me this the other day, relating to data migration issues at HMRC, and has given me permission to share it:

"In the last couple of weeks I have been told by HMRC staff that I was not authorised to act for 2 different clients. Both clients have been with me for 7 years, and I have never had any problems dealing with their affairs.

After considerable frustration I believe I have the situation resolved thanks to being able to prove that I had been dealing with HMRC for these clients for several years. In one case a copy of the original 64-8 did the trick!

The thing that I find so frustrating is that HMRC is forgetting that they have changed the system for authorisations significantly, and in fact the real problem is that they have failed to transfer the authorisations for agents correctly as new systems have been introduced."

Anyone else experienced similar problems?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and 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.

To find out more, please use this link Taxwise

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"

HMRC Loses Track of Data

This Is Money reports that HMRC have told Sipp provider AJ Bell that it could not divulge any reliable statistics on pensions:

"Pension scheme services is experiencing systems difficulties in collating intermediate level of detail in some areas. It is now clear that these problems may be more widespread.

IT is currently investigating this but it means the data we have already provided should not be relied upon. Until we are comfortable the data we produce is correct, it would be wrong to provide further summaries which may present a misleading and unreliable picture.."

It is hardly surprising that this situation has arisen, the tax and pensions rules in the UK are "insanely" complex. A cynic might conclude that they were made deliberately complex, in order to prevent ordinary people from understanding them.

Will the new government do something about this?

Aside from some window dressing, I doubt that there will be any major changes that will simplify the system (forthcoming changes to pension and CGT rules may well complicate it further).

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and 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.

To find out more, please use this link Taxwise

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"

Spies 'R Us

Public Service reports that the Secret Intelligence Service (SIS) and GCHQ are working on a new network to collaborate with other agencies.

It seems that a recent initiative (SCOPE phase two), which was designed to deliver intelligence to law enforcement, government departments and agencies, has failed.

However, the government is never afraid to have another go at improving its spying capabilities. As such a new initiative has been launched.

Collaboration in the Intelligence Community (CLiC) is intended to be a "low-risk, inexpensive approach".

Former chief of SIS, Sir John Scarlett, is quoted:

"CLiC is designed to shore up... some of the capability that SCOPE 2 would have given us... We are doing really quite well on this more modest CLiC programme, which is not being run out of the Cabinet Office, it is being run out of SIS and GCHQ... and it will be of community-wide value when it is delivered."

What has this got to do with HMRC? I hear you ask.

Well, guess which agency will be the first to benefit from CLiC?

Yes, that's right, HMRC!

On the assumption that all things go according to plan, HMRC will be able to receive Top Secret intelligence and communicate securely via email.

Seemingly the improbably named secure messaging system STRAP3A (do a Google of images for this, and you come up with some quite unusual pictures) will let GCHQ, SIS, MI5, the Ministry of Defence, the Foreign Office (FCO), the Cabinet Office, the Home Office et al exchange Top Secret information by April.

Needless to say, this being secret, the costs and contractor involved are all "hush hush". However, it seems that HMRC are footing part of the bill.

Let us trust that the information shared is better handled than other information that government agencies are prone to lose.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and 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.

To find out more, please use this link Taxwise

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"

HMRC's Coding Enigma

It seems that HMRC's shiny new NIC & PAYE system (NPS), heralded as a major step forward by HMRC, isn't working terribly well.

What government managed IT project ever works "terribly well"? (Delete the word "well" from the previous phrase and you have the reality).

For reasons that only a computer would know, the HMRC database has "misplaced/lost" the information it is meant to contain about people leaving jobs.

The result?

The system is combining taxpayers' current employment records with old data, thus creating additional wealth and income which doesn't exist. This causes the system to calculate incorrect personal allowances and thus issue incorrect tax codes (which are of course used by employers to deduct tax).

How many people is this screw up affecting?

HMRC is issuing approximately 25 million tax coding notices this year, that is double the amount issued in the previous year. Therefore, it is not unreasonable to assume that several million taxpayers may be adversely affected by this.

Taxpayers need to be more than vigilant this year, when they receive their coding notices, and ensure that where there is an error that they notify HMRC immediately.

Quite how long it will take HMRC to rectify these errors remains to be seen.

Enigma - Sadeness

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and 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.

To find out more, please use this link Taxwise

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"

Power Corrupts - ID Cards and HMRC

The Guardian highlights the dangers of government departments, such as HMRC, using the data gathered via the ID card scheme to go on fishing trips (outwith genuine enquiries, wrt serious criminal offences being investigated).

"The controversial ID card system, which has been amended over the last few weeks, may well be used by various government departments to track individual spending habits and assets.

In a relatively unpublicised move the UK government has given the Treasury department, and specifically tax inspectors, the ability to access the ID card database, which shows big-ticket items acquired by individuals in the UK.

It is believed that by using information on the database, the various tax authorities could ultimately create an audit trail of spending and assets for each individual in the UK."

It seems that the Home Orifice is reluctant to comment on this issue.

Using HMRC as a government spy will further undermine its reputation and indeed its effectiveness (as time will be wasted by HMRC staff who end up spending their time fishing in "uninteresting backwaters", rather than proactively targeting those who are known to be defrauding the tax system).

It goes without saying that the civil liberties implications of this are somewhat "worrying", to say the least.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and 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.

To find out more, please use this link Taxwise

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"

Inappropriate System Uses

Computing reports that the Department of Work and Pensions (DWP) has a database (Customer Information System - CIS) that makes 92 million tax and benefit records available to 80,000 DWP employees, 60,000 workers from other government departments, and staff from 445 local authorities.

Since July 2008 these workers have also had access to HMRC's tax credit data through the system.

So far so bad.

DWP claimed in February 2007:

"With regard to the CIS, there are strict measures in place to protect the integrity of people's data.

Access to the information is only allowed where it is legal to do so, and it is restricted to the specific business needs of the customer.

Specific controls are in place to restrict who can see each field, which manages the risk of unauthorised or inappropriate access."

Now here is where the problems really start, Computing has discovered that in the six months to January 2009, six DWP employees were disciplined for "inappropriate use" of the system.

In the same period, local authorities were obliged to carry out internal investigations eight times after being notified by DWP that CIS had been accessed inappropriately.

How many other undiscovered inappropriate uses of CIS are there?

These issues are clearly not failings of HMRC systems or personnel. However, they are issues that HMRC should be concerned about as they affect the confidentiality of taxpayers' data which is sacrosanct within HMRC.

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"

Wobbly Framework

It seems that there are errors within the government's "frameworks" database. This is used by departments such as the Treasury and HMRC to provide basic details about individuals eg name, address, date of birth and NI number.

Around 3.5M errors have been identified within the database, after Justine Greening MP raised concerns from one of her constituents about erroneous changes to her records on the database. HMRC incorrectly changed the constituent's registered address without her authorisation, and illegally sent out her PAYE information to a third party.

Greening states that the Treasury, when the matter was raised, was somewhat vague about the process for changing records.

The "good" news is that Labour are in love with databases and wish to set up an id card scheme, ie they wish to create ever more complex and unwieldy databases, giving them ample opportunity to multiply the number of errors.

Garbage in - garbage out.

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"

Datagate II - The Sequel

Another year, another IT scandal.

This time screw up, relating to the loss of a memory stick containing passwords to a government site via which people can pay parking fines and fill in tax returns, has been blamed on a private contractor (Atos Origin).

All very well, but it is the government that vets, approves and hires these firms.

Anyhoo, the extra icing on the cake is that Gordon "Smiler" Brown has admitted that the government cannot promise the safety of personal data entrusted by the public.

This coming from a government that wants to issue compulsory id cards, build a DNA database, place our medical records online and force us all to submit tax returns online.

Hardly reassuring is it?

There is some good news, the memory stick has been found...outside of the Orbital Pub in Cannock.

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"

A Series of Fuck Ups

Accounting Web published this summary of recent fuck ups by HMRC, as witnessed front line by real people trying to work with the mess that is HMRC.

Here is the piece in full:

"VAT – part of the overhaul?

Gavin reports that after HMRC updated the online vat registration yesterday it decided to wipe any un-submitted application as of 22/7/2008. This was confirmed by helpline staff he called this morning.

He says that he "was a bit disappointed as I will have to enter all the data again. There was no warning on the log in screen to the system so I am not sure how I was supposed to know this was happening."

Tax refunds – new system, new delays?

Following HMRC's recent announcement that no tax refunds would be paid unless full bank details are included on the SA return, accountants might have expected that the refund would be forthcoming if all the details were complete. Not so it seems...

Lee reports that if you submit a client's 2007/2008 Tax Return online that shows a refund and the taxpayer is dealt with by the Chapel Wharf Expat team, the tax refund will not automatically be paid to the client's bank account. Apparently a new policy in place for 2007/2008 means that staff are instructed to manually check/issue the tax refund into the clients bank account.

He says that having submitted a client's Tax Return online on 21 July 2008, he questioned how long his client would have to wait and was informed that they are currently up to the end of June submissions. There is already a three week delay and we have not got to the busiest time of the year!

One team member indicated this morning that agents could write to HMRC to complain and gave an address in Bristol (The Repayment Security Team, AASNIU, HMRC, 101 Victoria Street, Bristol, BS1 6BG).

Says Lee: "This quite appalling state of affairs. Agents have not been told and we have angry clients whose money is being loaned to the Chancellor."

Agent authorisation, again

Peter wrote into Any Answers pointing out a range of problems, including

The database the Tax Office uses is different to the database the Online Agent Authorisation system uses.

The letter sent to my clients which has the code doesn't get posted until after HMRC send me a letter warning me that the code is about to expire. HMRC leave post in warehouses for three weeks before sending letters.

When I complained about this to HMRC they said the system works because the client gets the code before it expires! I pointed out to them that their concept of working is different to mine. I have been unable to effectively act for my clients while HMRC leave the letters in a warehouse.

He adds: Does anyone know why HMRC spell Middlesbrough incorrectly on the website? I was told they would correct it about four years ago but it is still wrong.

IT gremlins again: Self Assessment records mixed up

Earlier in the year agents details were mixed up, latest reports indicate that it might be prudent to double check your client SA records. Various members report names and addresses being mixed up.

****

The National Audit Office, in its latest report on HMRC's transformation programme remains remarkably upbeat with HMRC's IT performance.

Accountingweb's IT editor John Stokdyk finds this perplexing: He writes, "Taken at face value, the NAO report makes little allowance for the risks posed to the transformation programme by the stresses and strains already facing the department's current IT systems and change managers."..."

Bottom line, HMRC is in a farking mess!

Given that the above problems are being experienced by trained accounting professionals, one can only wonder at the problems being experienced by non accountants who don't know/understand the rules or the way round the "system".

Our "beloved" Prime Minister, who cobbled together the Revenue and Customs into the monstrosity known as HMRC is personally responsible for this. The only way out of this mess is for him to be removed from orifice ASAP, and for a complete restructuring (not Brown's badly thought through restructuring) or indeed demerger of HMRC.

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 Dangers of Targets

It would seem that last year's datagate cock up by HMRC, when they lost the personal data of 25 million people, was not just down to negligence but was also the result of Brown's management by target philosophy.

According to Merlin, The Earl of Erroll (an IT expert who is widely regarded as the only Lord with programming skills), datagate was "because of targets [and] budgets" rather than being the fault of individuals.

Lord Erroll noted, during a panel discussion at the Infosecurity security conference, that someone had to get the data somewhere else to meet a target. He added that having simple procedures doesn't work, if the only way to hit targets is to bypass those procedures.

Quote:

"We live in a complex world. The moment you try to use simple rules and controls, they don't work."

The data that was lost by HMRC should have had details, such as bank details, stripped out of the databases on the discs before they were sent to the National Audit Office. However, the data was left in as a result of costs savings targets.

A false economy by anyone's standards!

As long as Brown holds office, management by targets will continue.

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"

HMRC's Wonky Databases

HM Revenue & Customs (HMRC) has been having some problems with its databases.

No, I don't mean that embarrassing "little" incident last year when it lost the data records of 25M people.

Seemingly it has incorrectly taxed up to five million UK citizens.

A report by the National Audit Office (NAO) found that up to £880M in pay as you earn (Paye) taxes had not been collected each year, while other taxpayers had overpaid by up to £340M.

The NAO said in its report that IT systems were "not well suited to the efficient administration of income tax where people have more than one job or change jobs on a regular basis".

It added:

"These difficulties have been compounded by inconsistent working practices within the department as a consequence of staff not being aware of or failing to follow departmental procedures."

The NAO said problems stemmed from tax records being structured around jobs, rather than around taxpayers.

HMRC have admitted that its Paye systems have difficulty coping with people who have more than job. However, it has promised to fix the problem.

So that's alright then?

Errrmmmm...maybe not.

For you see, the solution that HMRC intend to implement is to move its processing from its 12 regional databases onto one single national database during 2008-09.

An HMRC spokesman said:

"This will bring together separate employments into a single customer record to create a single view of employees' tax affairs.

Our staff will have access to all of an employee's pay, tax, national insurance and pension information which will be all in one place. This will make our Paye processing quicker and more accurate."

A noble idea.

However, given their previous problems wrt merging/rationalising departments and the complete inability of any government orifice to handle IT issues in a professional and successful manner, does anyone seriously believe that the merging of 12 regional databases will work?

I guarnatee more records will be lost and muddled up during 2008/09.

Tax does have to be taxing.

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