Lin Homer Appointed To ICAS Council

As per CCH Daily:

Ex-HMRC chief Lin Homer appointed to ICAS Council

Dame Lin Homer, who left her position as head of HMRC a year ago, is to join the ICAS council as a public interest member for a four-year term, the Scottish institute has announced

12 Apr 2017

Pat Sweet

Reporter, CCH Daily and Accountancy

View profile and articles.

Public interest members serve as full members of the council and have equal voting rights with the CA members. In addition to serving on council from 28 April, Homer will sit on some of the other council committees, and ICAS operational boards.  

Homer, who succeeds Judith Sischy, will be joining incumbent public interest members, Robert Black and Rhona Brankin; and Colin McClatchie who was appointed on 1 January 2017.

A qualified lawyer with many years’ experience as a chief executive in local and central government, Homer was chief executive of HMRC from 2012-2016, where she oversaw the tax authority’s digital transformation strategy.

Since leaving the tax authority, Homer has taken up an unpaid role on the governing body of the University of Birmingham, which awarded her an honorary doctorate in 2013, and now the position with ICAS.

Homer said: ‘My role is to ensure that ICAS fulfils its public interest responsibilities as set out in its Royal Charter.

‘I will strive to ensure that the public interest remains at the heart of ICAS’ activities.

‘During my time with HMRC I worked closely with all the accountancy bodies, including ICAS, and I look forward to working with members again to uphold the Institutes’ standards and values.’

ICAS chief executive, Anton Colella, said: ‘Dame Lin’s clear understanding and commitment to the safeguarding of the public interest will ensure that the interests of members and the public are kept at the forefront of our strategy and operations.

‘We look forward to Dame Lin’s contribution on council. Her perspective, skills and experience will be of great value.’

Homer was made a Dame in the 2016 New Year’s Honours List. Her stint leading the tax authority was controversial and attracted heavy criticism, particularly over its effectiveness in its attempts to curb tax avoidance.

She was called before the Public Accounts Committee on a regular basis, not only to defend HMRC but also to explain some of the more questionable tax arrangements made with companies, global profit shifting and the Swiss private accounts leaks. 

Upon her departure from HMRC, Homer received a £2.4m pension pot following years working in the Civil Service, including spells with the Home Office and the Department of Transport."

I'll just leave this here.

Tax does have to be taxing.

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Wise Words

As I intimated yesterday:

"The PAC, politicians and governments should not be surprised when the tax outcome is part of an international business’s decision on where to structure and locate activities,” said ICAS Director of Taxation Elspeth Orcharton. 

“It’s a truism worth repeating: legislators legislate. It is governments who create tax law, and who compete for inward investment by large international businesses, sometimes by reducing tax rates, sometimes by providing specific exemptions or reliefs from tax.  

“The PAC, politicians and governments should not be surprised when the tax outcome is part of an international business’s decision on where to structure and locate activities."

Source ICAS.

Tax does have to be taxing.

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Ground Hog Day

On 7th September HMRC's Chairman, Mike Clasper, hosted a meeting at 100 Parliament Street to discuss HMRC service delivery.

The meeting had been requested by a number of professional bodies/charities (one could, for want of a better word, call them "stakeholders") including:

- the Institute of Chartered Accountants in England and Wales,
- the Chartered Institute of Taxation,
- the Institute of Chartered Accountants of Scotland,
- the Association of Chartered Certified Accountants,
- the Association of Accounting Technicians,
- the Association of Taxation Technicians and the Low Incomes Tax Reform Group,
- Tax Aid
- TaxHelp for Older People.

Why was the meeting called?

The stakeholders wanted to follow through on the recommendation of the House of Commons Treasury Select Committee’s that HMRC should work closely with the professional bodies, tax charities and businesses to improve the end‐to‐end experience of dealing with HMRC.

In addition to Clasper, HMRC sent along some senior managers.

Despite the fact that HMRC are happy that statistics show that in recent months there has been a significant improvement in overall post handling times..really???..HMRC recognise that this improvement is not consistently reflected in the actual experience of taxpayers and agents.

In other words, from the perspective of the stakeholders the statistics are wrong or are (shall we say) measuring the wrong variables.

Anyhoo, on the 14th of September HMRC issued a joint statement which outlines the agreement made as a result of the meeting.

The whole area of post handling and processing will now be looked at in depth, to understand how far the recent improvements are reflected in the actual experience of taxpayers and agents. Additionally, the reasons for the experience and perception of HMRC’s customers being different from that of HMRC managers will also be examined. 

Quote:

"It was agreed that as a first stage, work should be taken forward quickly and on three fronts:

• Post processing and handling should be looked at in detail to establish where problems still exist and how they can be resolved (and HMRC’s performance measures reviewed where necessary to ensure that they are credible and effective). This work will be complemented by a review of the following processes where it is believed improvements can be made: non Self Assessment repayment claims, automated PAYE coding notices and practical issues relating to deceased estates.

• A number of agents and charity representatives will spend time with HMRC’s front line service delivery teams to look at processes in detail from a customer perspective and make recommendations as appropriate.

• HMRC will carry out structured visits to the offices of a number of practitioners and charities to gain an in depth understanding of service delivery as seen from a customer perspective.

The intention is to pursue this initiative within a very stringent timeframe to obtain tangible fast track results with a view to facilitating quick resolution in a number of areas. The joint initiative will commence on 3 October and progress on the initial three work streams will be reviewed by 30 November.

Mike Clasper said:

'Tax agents along with the charity and voluntary sector are vitally important customer and stakeholder groups for HMRC and I welcome their offer to work with us so we can better understand how to improve. We know that they and their clients are seriously impacted when we get things wrong and we are determined to deliver a better service.

We need to get a better understanding of the interaction of our customers and stakeholders with HMRC and of their experiences in resolving tax issues. Working with agent colleagues inside and outside HMRC will provide that knowledge and lead to better services for all of our customers.'
 
The professional bodies and tax charities said:

'We and HMRC are working very closely together to try to resolve a number of service delivery issues. This exercise is emphatically not a ‘talking shop’ and where appropriate we intend to make public the results and the action to be taken from the work streams we have embarked on.'"


The publication of the joint statement gave rise to an optimistic statement from Michael Izza (CEO of the ICAEW) on his blog:

"HMRC has made similar promises in the past to tackle service issues yet have failed to deliver. 

I believe this time will be different. 

Thanks in no small part to the role played by our Tax Faculty and in particular, Paul Aplin, chair of its technical committee, we now have a partnership with HMRC and a very public commitment from the very top to a way forward which will help turn things around."

I do not wish to discredit Michael's viewpoint and optimism.

However, having run this site for many years I have a feeling of deja vu wrt the promises being made and a feeling that we are now in the endgame wrt the current structure/leadership of HMRC.

Reading between the lines of the statement (re the comments about perceptions) I get the feeling that HMRC do not want to believe that there is a service issue, and that this will be used to try to discredit "stakeholder" perceptions of poor service.


Additionally, from my cynical ("tired old eyes") perspective, even if the promises are genuine given the state of HMRC I don't see that they will/can be fulfilled.

Given that I am so cynical, and therefore partisan in my viewpoint, I would really value hearing the viewpoints of my loyal readers (especially those who work within HMRC) as to the likelihood of this actually delivering what it promises to deliver.

BTW, whatever happened to the Charter?

Tax does have to be taxing.

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How To Lie With Statistics

ICAS (the professional body of Chartered Accountants) have published a response to the Treasury Committee's report into the Administration and Effectiveness of HMRC.

"In response to the Treasury Committee’s report into the Administration and Effectiveness of HMRC, Derek Allen, Director of Taxation at ICAS, the professional body of Chartered Accountants (CAs), commented:

“ICAS and other professional bodies gave evidence to the Committee expressing concerns that HMRC’s service performance was unacceptably poor. HMRC takes too long to process returns, answer letters and deal with taxpayers seeking help. HMRC has also been responsible for many errors such as issuing incorrect coding notices and delays in processing information. This has damaged public confidence in the tax system.

“The UK tax system is complex. HMRC needs to be accessible to taxpayers and their professional advisers if it is to achieve its vision of helping compliant taxpayers pay the right tax at the right time.

Sadly, HMRC deserves the criticism that they are responsible for delays and mistakes.

This undermines the trust that used to exist between taxpayers and HMRC. HMRC now needs to visibly demonstrate that it can improve its service.”

The Committee’s recommendations included:
• Improving the service provided by contact centres, particularly in relation to escalating complex queries and providing alternatives to 0845 numbers
• Providing robust alternative to online contact, including more cost-effective ways of providing face-to-face advice

The Committee’s findings are of no surprise to ICAS, who has previously voiced concerns over HMRC’s shortcomings and poor performance, reflected in surveys undertaken by the Institute.

“HMRC needs to be accountable for its performance. The Institute welcomes the recommendation that professional bodies, such as ICAS, should be involved in setting realistic performance standards for HMRC.

We are concerned that internal statistics do not reveal the true picture of delay and difficulty being caused by HMRC. It is essential that the Treasury Select Committee encourage more evidence from external sources.

The Committee should continue to monitor HMRC performance and service delivery and receive regular updates from HMRC management of the progress made to restore an acceptable service.”"

Readers should note well the comment "We are concerned that internal statistics do not reveal the true picture of delay and difficulty being caused by HMRC."

The issue of inaccurate internal statistics, survey results and manipulated feedback up the HMRC chain of command have been commented on regularly on this site. It is encouraging to see that the issue has been picked up by others.

"HMRC deserves the criticism that they are responsible for delays and mistakes."

Tax does have to be taxing.

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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

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Ker Farking Ching!

Thanks to the incompetence of our political "elite", the country is broke.

Therefore no one should be under any illusions that the state, in order to maintain its existence, will do all it can to extract every last penny from the taxpayers.

ICAS have issued a timely warning concerning the aggressive new penalty regime being applied by HMRC as from October.

Instant £100 fines will be applied for even a one day delay in filing, together with additional fines for lengthier delays.

"If people are even one day late in filing their paper self-assessment tax form they will be hit with an instant £100 fine. After another three months an additional fine of £10 a day is added for each day overdue, up to a maximum of £900. Tougher fines are added if passing the six month or one year mark; the larger of £300 or five per cent of the tax due.

From the 31 January next year the same will apply for people who file their form online. So a return due by the end of January 2012 but not filed until 5 August 2012 would attract £1,300 or higher in fines.

According to ICAS, the professional body of Chartered Accountants (CAs), since self-assessment was introduced in 1997, nearly one million people each year have been late in filing their return. Many people delay submitting their return for longer than 12 months. Until now so long as the person had paid all the tax due no penalty could be charged by HMRC.

Derek Allen, Director of Tax at ICAS, said:

'We are concerned that most people will not yet be aware of these new penalties as they have not been widely communicated. Based on the last decade of experience, at least one million people could find themselves liable to the additional penalties.'

The new penalties could also see taxpayers losing out on tax rebates from HMRC. This is particularly relevant for self- employed in the construction sector, where tax is often deducted initially by the contractors. Individuals are then due repayments after calculation once they lodge a return. However, under the new rules if the return is late the repayment owed will be a lot less because it has been used by penalties."

Suck it up people, the country is broke and the political "elite" have no intention of removing their snouts from the trough.

Ker Farking Ching!


Tax does have to be taxing.

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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

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Can't Get No Satisfaction

ICAS (the Scottish professional body of chartered accountants) last week published results of its survey of its members, that shows that SMEs are receiving a poor service from HMRC.

The survey findings highlighted that local compliance offices, which handle the tax affairs of small businesses, were rated as poor or very poor by 65% of the respondents.

Elspeth Orcharton, Assistant Director of Tax at ICAS, said:

"The UK’s largest businesses are given good service through customer relationship managers in HMRC’s large business services department, created in 2007. However, the demand this has placed on resources has resulted in poorer services for the majority of smaller businesses.

HMRC’s operating and staffing systems are simply inadequate to support compliance with what has become one of the most complex self-assessed tax systems in the world.

Unaddressed this will become a threat to public finances and closing the tax gap.

Almost half the members who responded were happy with the technical skills of HMRC staff handling phone calls, once they had found someone with suitable knowledge, but getting to speak to such a person remains a problem. HMRC’s contact and management systems need to be fit for purpose so that people don’t feel they are being passed from pillar to post."

The HMRC department responsible for collecting tax payments, debt recovery and ‘time to pay’ arrangements also scored low in the survey. The debt management and banking division saw 60% of respondents rating it poor or very poor.

The survey results highlight that HMRC’s debt management processes are disjointed.

"Aggressive collection tactics are too often used to pursue tax not actually due, and communications between the different parts of HMRC need to be improved."

ICAS points out that the disappointing figures reflect the difficulties met by experienced accountants and tax professionals, raising even wider concerns about the impact on unrepresented taxpayers lacking equivalent expertise.

Tax does have to be taxing.

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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"

Making It Up As They Go Along

ICAS have put a very well aimed and targeted boot into the "delicates" of HMRC, in respect of HMRC's Impact Assessment of Business Record Checks.

ICAS are of the view that business records checks could cost SMEs at least 10 times more than HMRC's guesstimate, and will impose an absurd administrative burden on SMEs.

In HMRC's fantasy land each visit, averaging half a day, will cost a business £54. However, ICAS has re-costed an average visit using realistic estimates of business disruption and adviser's time and have come up with a total of at least £560 per visit.

ICAS is also somewhat wary of HMRC's fantasy plans to visit 50,000 SMEs each year for four years.

That would be most assuredly bureaucratic bullying overkill, if HMRC really had the resources to do that. Additionally, ICAS is not particularly impressed with the "quality" of some of the people HMRC will be sending into the field and is concerned about the "intransigent attitudes" of these inspectors.

ICAS say:

"..the bases on which these proposals have been presented seem deeply flawed.

Assumptions made by HMRC regarding the incidence of inadequate business records are unsubstantiated by any detail, and estimated costs of the scheme are massively understated. It was not long ago that HMRC were assuring the Administrative Burdens Advisory Board that interventions would be well targeted to reduce red tape for compliant taxpayers, and we fail to understand why this policy has been changed...

HMRC's basic assertion that poor business record keeping is responsible for a loss of tax in up to 2 million SME cases annually seems to be a sweeping generalisation with little credible evidence provided to back it up. We would like to see evidence as to how this statistic has been arrived at, as the validity of the entire consultation document is based on it. Without such evidence, the proposals might appear burdensome and unjustified.

Experience of our members in practice suggests that poor record keeping (where it arises) does not necessarily equate with loss of tax – it can sometimes result in their clients paying too much tax...

We would take issue with HMRC's basic assumption that SMEs with poor records have chosen to have poor records. This is a misconception. Those with the courage and tenacity to embark on new business ventures are forced to battle from the outset against a mass of Government regulation and red tape. Typically they don't go into business because of their record keeping skills...

Anecdotal evidence has caused our members to question the skills and professional judgement of some HMRC representatives checking the business records of their clients. We understand that many of these members of staff have no significant accountancy or tax training. This can cause them to be on the defensive, and in these circumstances it is not unknown for them to adopt intransigent attitudes..."

As we can see, an unelected inefficient bureaucracy is allowing the excessive powers granted to it by a weak and incompetent political establishment to go to its head; and is attempting to use these powers to bully people and organisations that pay for its very existence.

Tax does have to be taxing.

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What is TAXWISE?

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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"

Carry On Regardless

HMRC has decided to carry on with its plans to force companies to file tax returns online using iXBRL, despite the fact that the professional accounting bodies have called for a delay.

In a letter to Treasury, David Gauke, the institutes (CIoT, ACCA, ICAS, ATT, ICAEW and the AAT) have asked for a delay as they fear that the new technology is not ready.

Sage have stated that its accounts production programs will not be ready in time.

However, HMRC insist that as from 1 April 2011 iXBRL must be used.

ICAS red flagged this issue in June 2009. However, I am surprised that it has taken the institutes so long to get their act together to write a joint letter about the problem only now (given that implementation is now only 2 months away).

Notwithstanding HMRC's stance, rumour has it that the Treasury will make a decision today as to whether this will really go ahaead.

Tax does have to be taxing.

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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"

No Longer Fit For Purpose

The Institute of Chartered Accountants of Scotland (ICAS) have just published a survey (conducted in August and September 2010) of ICAS members that shows a drastic deterioration in the facilities for contacting HMRC. These findings are also reflected in a new National Audit Office (NAO) report entitled 'Engaging with Tax Agents'.

"Poor communications account for 43% of HMRC's systemic errors and shortcomings reported by the survey respondents (compared with only 13% in a similar survey in March 2009), and 71% of these are considered 'more serious than a year ago'.

Derek Allen, Director of Tax at ICAS, said:

'Facilities for contacting HMRC have deteriorated drastically in the past year. Phone calls to HMRC help lines go unanswered.Letters sent to HMRC lie unopened for weeks – sometimes months. Many HMRC staff seem ill-equipped to perform their allotted roles, and technical tax questions are commonly passed from pillar to post. Urgent action is needed to simplify the tax regime and give more help to those trying to comply with their fiscal obligations.'

The administration of PAYE also attracts criticism, accounting for 15% of the matters reported (up from 11% in 2009), and 72% of these are considered more serious than a year ago.Many other concerns are raised by respondents, including difficulties with online filing and unreasonable delays in obtaining tax repayments.

Welcoming the NAO report's recommendations on how HMRC and tax agents could work together more closely to improve tax systems and services, ICAS notes the NAO's conclusion that the proportion of tax understated in returns submitted by agents was broadly one third of that where there was no agent involvement – finding it paradoxical that this has been used to suggest that returns for represented taxpayers are more likely to have under-declarations of tax than returns filed by non-represented taxpayers.

Derek Allen summed up:

'The problems raised by our member survey cover a wide range of issues and demonstrate that the over-complicated tax system we have is no longer fit for purpose. We hope our survey report can be used by HMRC to supplement the NAO report, helping identify weaknesses in HMRC's processes for administering the tax system and encouraging them to remedy these.

We also hope that, in looking to maximise value for money, HMRC will implement the NAO's recommendations on extending tax agents' involvement to provide further support to HMRC's tax compliance processes, whilst achieving cost reductions for HMRC and increased efficiencies for agents.

In considering the important role played by tax agents, we are disappointed that the NAO has drawn no distinction between members of professional bodies such as ICAS and those without qualifications. Unlike those that are unqualified, our members in practice adhere to a strict code of professional conduct, undertake continuing professional development, and are subject to stringent quality assurance reviews – all designed to maintain the highest professional standards among our membership.'"

The ICAS report can be downloaded here Systemic errors in tax administration.

Tax does have to be taxing.

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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"

ICAS Calls For Improved Tax System

The Institute of Chartered Accountants of Scotland (ICAS) has written to George Osborne, the new Chancellor of the Exchequer, calling on him to address a number of serious deficiencies in the UK tax system.

Competitiveness: The United Kingdom needs to have a clear policy on taxation which encourages business to retain and develop UK based operations and headquarters.

Fairness: The tax regime for unincorporated businesses should be brought more closely into line with that for companies. Also, working should always be more profitable than not working, and the highest marginal rate of income tax should be limited to 50%.

Simplicity: Existing complexities should be cut to help ordinary individuals and small businesses self-assess their tax liabilities. Tax credits rules should be aligned more closely with income tax rules, personal tax allowances should be rationalised to reduce the bureaucratic churn of taxing individuals on small incomes and then paying them benefits, and income tax and National Insurance should be merged to simplify administration.

Osborne's priority, rightly or wrongly, will be to reduce the budget deficit as quickly as possible. Sadly, simplifying the tax system will not be his number one priority.

Tax does have to be taxing.

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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 Places Itself Above The Law II

ICAS (The Institute of Chartered Accountants of Scotland) aren't particularly impressed with HMRC's "Code of Practice on Taxation of Banks" either:

"It has always been the case that banks, and other businesses, have applied strict interpretations of the tax law in determining their tax liabilities. This certainty is a key principle for any effective fiscal system. However, the code seeks to persuade the banking sector to encourage compliance with the spirit, as well as the letter of the law.

This relies on the banks' ability to fully understand both the law and the intention of parliament in introducing new tax laws. Understanding the intention of parliament is something which, as recent high profile tax cases have shown, even HMRC are unable to achieve. The code also specifically targets UK banks, leaving other lenders such as overseas banks outside its scope – an approach which is potentially discriminatory."

Tax does have to be taxing.

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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"

Good Agents, Bad Agents

Senior HMRC officials have acknowledged that the tone of a consultation document "Modernising Powers, Deterrents and Safeguards:Working with Tax Agents" was perceived as hostile and failed to recognise adequately the benefits of dealing with professionally qualified agents, as opposed to tax agents who do not belong to a professional body.

Source ICAS

The consultation also receives some pithy comments on Accounting Web as well.

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"

Absurd

The Institute of Chartered Accountants of Scotland (ICAS) have issued a press release stating that it is absurd that HMRC impose compulsory online filing during a recession.

It notes that HMRC plans to adopt Inline XBRL (or iXBRL) would be the first large-scale iXBRL implementation worldwide. Given HMRC's rather rickety IT systems, how wise is this without thorough embedding and testing?

Governments and their departments/organs of state don't "do IT"...PERIOD!

News Release – ICAS: Imposing compulsory online tax filing during a recession is absurd

It is absurd to require businesses struggling during a recession to introduce a mandatory online tax filing system. That's the view of The Institute of Chartered Accountants of Scotland (ICAS) in response to an HMRC consultation on draft laws requiring all companies to submit statutory accounts and tax computations in a revolutionary new data format (XBRL) by April 2011.

HMRC urged to reconsider its plans

ICAS objects to the additional burdens, costs and risks of this during the current recession – when many businesses are struggling to survive and should be concentrating their management expertise on the much more pressing and important task of maintaining productivity and employment.

Donald Drysdale, Assistant Director at ICAS and a Chartered IT Professional, said:

"In his Review of HMRC Online Services, Lord Carter of Coles recommended the use of XBRL, but emphasised that the new standard should not be imposed until it had been implemented and had bedded down. He also noted that other improvements would be needed before the service would meet the needs of tax agents.

Many companies won't be ready for this. It is absurd to require businesses struggling during a recession to introduce this.

XBRL has been used relatively sparingly to date, and HMRC plans to adopt Inline XBRL (or iXBRL) would be the first large-scale iXBRL implementation worldwide, so the technology certainly hasn't been adequately tried, tested and proven to be reliable.
It falls far short of Lord Carter's criteria."

ICAS has been exploring this topic with HMRC for more than two years. The Institute was instrumental in establishing tripartite discussions among Government, the tax profession and software vendors, but now reports widespread concerns that software solutions for preparing iXBRL-based statutory accounts will not be available in time.

Drysdale added:

"It's misguided and disproportionate to mandate iXBRL-based online filing by all companies as early as April 2011.

We've urged HMRC to reconsider its plans in the light of the relatively immature market position of XBRL, and we've asked that Ministers shift to a gradual voluntary adoption of iXBRL filing until the new software for tax and accounts preparation
has been properly tried and tested."

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"

Paranoia

I am not alone in thinking that HMRC and Brown and his minions have something of an unhealthy obsession with tax avoidance (which is, as I keep repeating, perfectly legal).

The Institute of Chartered Accountants of Scotland (ICAS) also think that HMRC have lost the plot over this issue, in fact they use the word "paranoia" to describe the government's approach to tax avoidance.

ICAS recently issued a press release warning about the dangers of HMRC's/Brown's approach to tax avoidance, and the adverse effects it will have on business owners.

Now you know that things must be bad when a leading accountancy body, that has been around for well over a century, starts calling the government/HMRC paranoid!

Here is the press release in full:

"The Finance Bill provisions which give effect to Chancellor Alistair Darling's proposed new capital gains tax relief for entrepreneurs reflect Government paranoia about tax avoidance and could adversely affect thousands of business owners, according to The Institute of Chartered Accountants of Scotland (ICAS).

Donald Drysdale, Assistant Director of Taxation, said, “Entrepreneurs’ relief has been described as a partial replacement for business asset taper relief or a resurrected form of the old capital gains tax retirement relief - both of which were intended to help taxpayers disposing of favoured business assets.”

'In practice, the proposed new relief is much less readily available than either of those previous reliefs. Because of the narrow definition of qualifying disposal, the stringent test applied in determining trading status and the reintroduction of the rental test when considering associated disposals - for example, where a business and the premises from which it operates are in different ownership - there is much greater likelihood that these entrepreneurs will be denied relief because obscure technical tests are not satisfied.'

Stephen Taylor of Carters Accountants LLP and also a member of the ICAS Tax Committee, said,

'We are concerned that the proposals adversely affect taxpayers on a retrospective basis, since existing commercial arrangements that have been regarded as perfectly acceptable under the current taper relief rules will be penalised. We also believe it is unfair that employee shareholders and certain trustees will be denied relief.'

Calling for further reconsideration of the proposals, ICAS believes that the impact of capital gains tax would fall much more fairly on taxpayers if the legislation provided for a transitional period after 5 April 2008 during which a measure of taper relief would continue to be available, and if for all purposes of capital gains tax there was a rebasing of assets to a relatively recent date such as March 2002 so that inflationary gains accrued up to that date would not be taxed unfairly. "

My advice to Brown and HMRC, given this diagnosis of paranoia by a respected and leading institution, seek suitable treatment with all due haste.

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"