PAC Plays The Blame Game

The PAC invited HMRC finest to attend another committee meeting yesterday.

This time the guests were; Lin Homer, Chief Executive and Permanent Secretary, Nick Lodge, Director General, Benefits and Credits, Simon Bowles, Chief Finance Officer and Edward Troup, Tax Assurance Commissioner.

The subject of the meeting was HMRC's 2011-12 Accounts.

What was sadly apparent from yesterday's meeting was that MPs don't seem to understand Parliament's role in tax legislation, or indeed how HMRC works.

It is all very well blaming HMRC for everything that is wrong with the tax system in this country. However, whilst there are some aspects that clearly fall under HMRC's remit (eg procedures/administration), as I have noted many times before the buck stops with Parliament.

- It is Parliament that drafts the legalisation that is blamed by MPs for "allowing" tax avoidance to occur.

- It is Parliament that drafts the legislation that makes the UK tax system unfeasibly complex and nigh on impossible to understand.

- It is Parliament (dare I mention wee Gordon) that merged IR and Customs, thus bringing about this buggers' muddle that is HMRC.

- It is Parliament that decrees HMRC must cut its resources.

- It is the government that has failed to make a single minister responsible for HMRC.

Therefore, ultimately, who is to blame for the mess that PAC are complaining about?

As ever views, comments and opinions are always welcome.

You can watch the meeting via this link PAC.

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 Call Handling Performance

As loyal readers know, the issue of HMRC's call handling performance often features on this site. On that well worn theme, HMRC last week published (and will continue to publish) quarterly contact centre performance statistics as part of "wider efforts to improve HMRC’s service standards and in particular highlighting concerns with the existing call centre performance".

According to HMRC, the data will comprise basic performance and management information and customer experience results.

The data released last week for quarter ended June 2012 (bit slow to release Q3 are they not?) shows that there were over 22M call attempts in Q2, of which 15M were "handled".

Factoid: "Handling" means being answered by an adviser or "dealt with successfully by an automated message" (does the latter mean "the line is busy please try later"?).

It seems that 43% of calls were answered within two minutes, but 27% were not answered within 10 minutes.

Paul Aplin, chairman of the ICAEW Tax Faculty’s Technical Committee, told Tax Journal that call centre performance had been a major issue. Publication of the figures was "an important step in terms of transparency".

We shall see, as I noted above where are Q3's figures (given that Q3 ended over a month ago)?

Statistics are only of any use if they are timely.


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 Cuts A Deal With Tax Evaders

It is interesting to see that, despite the fact that tax evasion is illegal and despite the vocal political posturing against avoidance, HMRC have cut a deal with a large swathe of tax evaders.

The Times reports that only one person on the "Lagarde List" of 6,000 tax evaders has been convicted of serious fraud, and only 500 have been investigated on suspicion of fraud.

A senior HMRC official told The Times:

“The courts would not thank HMRC for taking zillions of prosecutions into them, so we have a selective prosecution policy. We want to use prosecution as a deterrent.”

Zillions eh?

A tad exaggerated n'est pas?

I can see the pragmatic benefits to the Treasury of "cutting a deal". However, it does send a rather confusing message to those who have criminal intentions.

There is also the question of dual standards, as Pinsent Masons director Ray McCann told The Times:

“It is those at the lower end of the social scale who go to prison. There is no immunity offer for benefit cheats.

The Revenue made a policy decision…Where there was an HSBC account, they would automatically go to contractual disclosure facility. This means immunity from prosecution is guaranteed if you own up to tax evasion, whether it be a small amount or billions.”

It's a funny old world!

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"

Here We Go Again - Business Records Checks Resume

In February I wrote about HMRC's postponement of their controversial and ill thought out business records check scheme.

The postponement is now over, and the revamped scheme is being relaunched. HMRC will not just be sending letters but also calling SME's on the phone, if the phone call produces an "unsatisfactory" response then HMRC will be showing up on the doorstep.

As per HMRC:

"Businesses need to keep adequate business records so that they can complete their tax returns correctly.

A pilot programme of Business Records Checks (BRC) began in April 2011. This involved checks by HMRC on the adequacy of Small and Medium-sized Enterprises' (SMEs) statutory business records. SMEs are businesses with an annual turnover below £30 million who employ less than 250 people.

Up until 17 February 2012, 3,431 BRC had been carried out. These found that 36 per cent of businesses had some issue with their record-keeping of which 10 per cent had issues serious enough to warrant a follow up visit.

Following a review, HMRC announced a fresh approach to its pilot BRC programme on 3 February 2012.

The review of the pilot programme, which included discussions with trade and professional bodies' representatives, found clear evidence that the programme was effective in improving record-keeping practices amongst SMEs. However, it recommended that the checks were better targeted in future, and linked to wider education and support activities.

In order to implement the review's recommendations all new BRC activity was paused from 3 February to 31 October 2012 to allow HMRC to redesign the BRC process.

Read the full report of the Business Records Checks Review (PDF 145K)

Overview of new approach to BRC

A new approach to BRC started on 1 November 2012. Customers who are more likely to be at risk of having inadequate records will be contacted by letter to arrange for HMRC to call them to go through a short questionnaire.

Depending on the outcome of this call, HMRC will confirm to some customers that no further action is required. Where some issues are identified, customers will be offered targeted self-help education options. Customers who are assessed as being at risk of keeping inadequate records will be referred for a BRC visit.

Useful Information

Business Records Checks"

HMRC have also issued a press release about the scheme which outlines the regional timetable for implementation of the scheme:

"Business Records Checks are being re-launched by HM Revenue and Customs (HMRC) today, following a review and extensive stakeholder consultation.

The substantially redesigned Business Records Checks programme now involves a new step-by-step approach, with a much greater emphasis on education and support.

Businesses need to keep records which can clearly demonstrate they are meeting their tax responsibilities. From today, HMRC will send letters to businesses it believes may be at risk of keeping inadequate records, advising the business that HMRC will be phoning them to discuss their business records. This call will then take the customer through a set of questions to assess the customer’s record-keeping affairs. Depending on the outcome of this conversation, HMRC will then determine whether the customer could benefit from tailored educational support and whether a Business Records Checks visit is necessary.

Where a visit reveals the customer is keeping inadequate records, HMRC will provide guidance on what the customer needs to do to improve their record keeping. HMRC will then arrange a follow up visit, normally three months later, giving the business a reasonable time to make the necessary improvements to their record-keeping processes. If, on the second visit, the records have not improved to an adequate standard, then HMRC may charge a penalty.

The Business Records Checks programme will be rolled-out, region by region, over a 14-week period. The planned timetable for visits to re-commence is as follows:

• London & Anglia – 26 November 2012

• South East England – 14 January 2013

• Scotland – 14 January 2013

• Northern Ireland – 14 January 2013

• Central England – 21 January 2013

• East of England – 28 January 2013

• North Wales & the North West of England – 28 January 2013

• South Wales & the South West of England – 4 February 2013

HMRC’s Director of Local Compliance, Richard Summersgill, said:

“We’ve listened to businesses and agents, and revamped our Business Records Checks programme to make it more streamlined, targeted and better focused on education.

“The visits offer benefits for businesses at risk of keeping inadequate records. Adequate records help businesses pay the right amount of tax at the right time, thereby avoiding interest and penalties for errors and late payment, whilst also giving HMRC greater assurance when a business submits its tax returns.”

Notes to editors1. A pilot programme of business records checks began in April 2011. Up until 17 February 2012, 3,431 business records checks had been carried out on the records of small business customers. These checks found that 36 per cent of businesses visited had some issue with their record keeping, with 10 per cent of all businesses visited having issues serious enough to warrant a follow-up visit. Where follow up visits were undertaken, it was found that the majority of these customers had improved their record-keeping affairs – indicating a Business Records Checks visit did have a positive effect on customers’ record-keeping.

2. On 3 February 2012, HMRC announced it would be taking a fresh approach to its Business Records Checks programme, following a review. (See HMRC news release NAT 10/12 for more information.)

3. For further information on record-keeping visit www.hmrc.gov.uk/record-keeping

4. Follow HMRC on Twitter @HMRCgovuk"

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"

PAC Hearing Into The Administration and Effectiveness of HMRC

Here is a link to a recording of yesterday's PAC hearing into the administration and effectiveness of HMRC. I would have embedded the video, but it starts playing automatically (ie visitors to this site would be greeted by the dulcet tones of Homer et al whether they liked it or not).

Guest starring Lin Homer, Chief Executive and Permanent Secretary, Ruth Owen, Director General, Personal Tax, Jim Harra, Director General, Business Tax, HM Revenue & Custom.

 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 IT Downtime

Heads up for next week folks, there's going to be some downtime on the HMRC website, as per Government Gateway:

Government Gateway - Advanced Warning

We will be making some changes to the Government Gateway between 22:00 Tuesday 6th November 2012 and 06:00 Wednesday 7th November 2012, during which time the service will be unavailable.

We appreciate that any time a service is unavailable there is some inconvenience. We have worked with the government departments using the Gateway to reduce the time for which the service will be unavailable, and have scheduled it at the most appropriate time.

The HMRC site offers some more detail on the issue here.

In the meantime a loyal reader advises me that there are some issues wrt accessing certain agent pages on the HMRC site.

Is anyone else having this problem? 

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"