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 Fairy Godmother

It's nice to see that those running HMRC believe in fairy tales.

Following on from sacking Adam Hart-Davis, as a result of his less than complimentary interview about HMRC, a new face to front HMRC has been found.

None other that "veteran" (I don't mean old) newsreader Moira Stewart.

Ms Stewart will make her TV comeback using the slogan:

"Tax needn't be taxing."

A variation on the old tag line "tax doesn't have to be taxing".

Appearing as a fairy godmother, she will tell taxpayers how to fill in tax forms.

Rather disconcertingly an HMRC spokesman said:

"We envisage her spearheading the campaign for some time.

Her relaxed manner will get people in order.

She has authority and a serious reputation."

"Get people in order!"???

I can't say that I care for the implications of that turn of phrase!

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"

Tax Evasion vs Tax Avoidance - Clueless

How depressing to see that a tax "professional" doesn't seem to know the difference between tax "evasion" and tax "avoidance", and spends his time campaigning against avoidance.

"But in the real world the fact that there is no clear distinction between tax evasion and avoidance does matter. And it's this ability to see beyond the pointless argument on definition to the reality of life as it actually is that makes all the difference."

Source Richard Murphy.

I assume that he does not use his personal allowances?

Were he to do so that would be tax avoidance.

Even more depressing is the fact that:

-We are both members of the ICAEW (FCA's)

-We both qualified, not at the same time, at KPMG

-We both featured in Accountancy Age's 2006 Top 50 Financial Power list (he was 42nd, I was 11th)

Sadly the government uses people such as Richard Murphy to justify their increasingly hostile policy towards legitimate tax avoidance.

One more time, for Richard's benefit:

1 Tax avoidance (legitimately reducing your taxable income) is legal, it is tax evasion (hiding taxable income) that is illegal.

2 We all practice tax avoidance by the very fact that we use personal allowances, isa's, tax credits etc.

Tax avoidance is legal, tax evasion is illegal.

Is that clear?

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"

Gordon's "Quick Fix"

Having introduced a 10p tax band a few years ago, that many believed did not actually help the poorest (who don't pay tax), Gordon Brown abolished it last year.

MP's in the Labour party, having realised that there are local elections coming next week, recently woke up to the implications of this well publicised abolition and have managed to pressure Brown into saying that he will try to ensure that those negatively impacted by it will be helped.

Needless to say, there will be a world of difference between what Brown is allowing his MPs to believe they think he has promised and what he actually does.

However, we can be assured of one thing, whatever "fix" he actually implements will involve a smorgasbord of complex tax credits, means tests and expensive adverts telling people that if they are affected they should apply for relief.

The net effect will be:

-The costs will outweigh the extra tax collected

-The taxpayer will be worse off

-HMRC will screw it up, as the tax and tax credit system is already far too complex and unwieldy to work effectively and efficiently

As long as Brown is in office, the tax system and HMRC will never be simplified and will never work as they should (ie be a cost effective, fair and efficient mechanism for collecting tax).

Brown doesn't do "simple".

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"

Customer Care

HMRC would have us believe that we are the "customer".

Hah!

As if we had a choice!

HMRC would have us believe that as a "customer" we can raise suggestions for improvement in their online filing service, and that they will take them on board.

Really?

Read this on AccountingWeb, including the comments, it would seem that for the last three years a perfectly sensible suggestion has been ignored by HMRC.

Who do they think that they are trying to kid, when they tell us that we are the "customer"?

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"

Judge, Jury and Executioner

I am amused to see that the people running HMRC are fans of Judge Dredd; where Dredd is judge, jury and executioner.

It certainly seems that HMRC have taken this fantasy story as being a fact based model, on which to base their new modus operandi.

Under new penalty provisions, HMRC will set the level of fines for tax offenders and also decide the degree of fault.

That's nice!

I assume that it will help cut down on all that time wasting bureaucracy, whereby a third party would have to become involved in assessing guilt and determining the level of fine (if appropriate).

The new provisions (published on 1st of April - no joke!) will result in a penalty of up to

-30% of the tax due if the error is "careless";
-a penalty of up to 70% of the tax due if the error is "deliberate";
-and a penalty of up to 100% of the tax due if the error is "deliberate and the customer conceals it".

The new penalties will initially apply to errors on returns and documents for income tax, VAT, PAYE, national insurance, capital gains tax, corporation tax and the construction industry scheme.

They will kick in on return periods starting on or after 1 April 2008.

The sting in the tail with the new penalties is not just the level of penalty, but also the fact that HMRC will decide the degree of fault.

HMRC state that their benchmark of "reasonable care", when determining the seriousness of the "error", will vary according to the person involved, their circumstances and their abilities.

Somewhat subjective, don't you think?

Don't worry though; HMRC, like the Pope, is infallible (in its mind anyway).



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"