HMRC's Bulging Sack

Much like Santa Claus, HMRC seems to be suffering from a bulging sack.

John Battle MP (Leeds) recently claimed that a six week backlog of mail has built up at HMRC's offices in Lisbon Street. Mr Battle discovered the backlog after phoning up HMRC on behalf of a firm in his constituency.

The call took a somewhat circuitous route, first to Cardiff then to Wrexham.

Mr Battle is quoted in the Yorkshire Evening Post:

"People's papers seem to be scattered around the country with no serious tracking mechanism.

People really do want a more satisfactory service, not least because it could mean a serious risk to jobs at a time when there is a squeeze.

I am tabling questions to ask whether the Treasury can address the responsiveness of the Leeds tax office.

If they need more staff, get a few more staff to cope with the pressure and help stop businesses from going under."

HMRC have denied that there was a six week backlog in unopened post.

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"

Bankrupting For Britain

Official figures reveal that the number of personal bankruptcies triggered by HM Revenue and Customs is expected to be almost 33,000 this year. In 2006-07, before the economic turmoil, the tax authorities bankrupted just 12,134 people.

Source The Telegraph.

Way to go 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"

Madness!

The BBC reports that thousands of parents are paying claims management firms to reclaim a now defunct tax-allowance, even though they could do it themselves by contacting HMRC directly.

Back-dated claims for the old Children's Tax Credit must be made by 31 January 2009.

Is it not time that our creaking, massively over complex and confusing tax system was given a thorough overhaul and simplified from top to bottom?

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"

Tis The Season - An Appeal

At this time of year, when many are overindulging in the annual Christmas booze/gluttony fest, it is only decent that we spare a thought for people less fortunate than ourselves who cannot partake of such merriment due to their particular circumstances.

In particular I would like to highlight the plight of tax agents at this time of year, who are toiling all hours to make complete their clients' tax returns in time for the tax year end.

I received a missive from one such agent the other day who noted, with a degree of exasperation, that yet again (as per previous years) HMRC have employed a market research company to garner "customers'" views on the performance of HMRC.

Whilst the survey (estimated to take around 15 minutes or so) may well be of benefit to both the "customers" and HMRC itself, the timing of the survey (at the busiest time of the year for tax agents) could not be worse.

This year's appeal is to HMRC, to ask them to reschedule the survey to a time of year when their "customers" have time to go through the survey and submit more considered and useful responses.

Come on HMRC, spare a thought for those who are toiling away trying to meet the year end deadline.

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"

SAYE Bonus Rates Reduced

Bonus rates for the Save As You Earn (SAYE) Sharesave scheme, administered by HMRC, have been reduced as a result of the cut in interest rates.

The FT notes that:

"On a three-year contract, the bonus rate is now 1.5 times the value of an employee's monthly payments, down from 2.4 times. This lowers the effective interest rate to 2.67%, down from 4.23%".

When will the rate charged by HMRC on overdue tax be cut in line with interest rates?

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"

MP Thrown Out of HMRC Office - Update

Sources close to Edward Timpson MP have advised me that the morning that HMRC announced the closure of HMRC Crewe, Mr Timpson travelled straight up to the office from London to meet his constituents and the campaign team that he had worked with over the last 6 months.

Local managers were told in advance, and Mr Timpson had met with the Financial Secretary to the Treasury (FST) twice in the preceding two days.

However, because Mr Timpson hadn't specifically requested permission from the FST and Workforce Change that morning, a regional manager in another office ordered his ejection.

Mr Timpson lodged a protest with the FST, and his staff were told that the FST would apologise in the lobby.

HMRC seemed to have forgotten to tell the press that bit.

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"

MP Thrown Out of HMRC Office

Here is rather an odd story published in the Crewe Chronicle, about Crewe & Nantwich MP Edward Timpson being forced to leave the HMRC Crewe office.

I wonder what the particular "protocol" that he didn't follow was that so annoyed HMRC?

CREWE & Nantwich MP Edward Timpson has lodged a formal protest after being forced to leave the premises at Crewe tax office.

Mr Timpson had hot-footed it by train from London following the announcement the Crewe office was to close.

But he was forced to meet with worried staff, some of them in tears, on a car park opposite the Oak Street office after being told to leave the premises.

As he left the office building, an angry Mr Timpson said: “I have been asked to leave because they (management) said the proper protocol was not followed. I was here to see the workers in that building, most of whom are my constituents, who have just found out they’ve lost their jobs and want my support.

“That’s why I’ve come all the way from London and I can’t believe I’ve been asked to leave.”

The Conservative MP said he had travelled to Crewe to lend his support to the workers at this difficult time. He has now complained to Financial Secretary Stephen Timms’ office about his treatment by HMRC managers.

Mr Timpson added: “To deny an MP access to his constituents at a time when his constituents need him most is an outrage.”

An HMRC spokesman said: “We apologise for any inconvenience to Mr Timpson but we do have protocol and strict guidelines in place for visits to any of our offices.

“Mr Timpson is aware of the protocol as he’s gone through it before on previous visits and it does appear to have been sidestepped on this occasion.”

Mr Timpson has branded the consultation process leading up to the closure of the tax office “a sham”.

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"

MPs Recommend Anti Terror Legislation

Members of the Commons Public Accounts Committee have, according to Accountancy Age, recommended that HMRC beef up its investigations into the "cash in hand" economy by using anti terror legislation.

Quote:

"The Department should consider whether to seek alternative powers to strengthen this work."

I cannot say that I agree with the committee:

1 The anti terror legislation was brought in to deal with terrorists, not moonlighting taxi drivers et al. RIPA is already massively misused by local authorities.

2 A better solution would be to simplify the tax system; cut direct taxes, introduce a single band of tax, increase personal allowances and increase VAT. That will draw in the undeclared tax from the "cash in hand" economy, and cut the cost of administering our already over complex tax system.

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"

Changing The Rules of The Game

You know that the government is strapped for cash when the rules of the game are charged wrt tax reclaims.

New rules introduced by HMRC, effective from April 2009, will mean that even if a business wins a claim in a VAT Tribunal for overcharging it may not be able to reclaim its legal and accountancy costs from HMRC, unless it can prove that HMRC has acted unreasonably.

Proving that HMRC acted "unreasonably" will be tough.

This effectively means that small firms will not bother to try to reclaim overpayments, unless they are excessive.

Is this fair that small firms are being disadvantaged in this manner?

No.

However, small firms are easy targets; especially when a government is broke.

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"

Recession Bites

Clearly we are heading for a deep recession, whereby incomes will be slashed and by definition tax take reduced, as HMRC are (according to the Public and Commercial Services union) shedding 3,400 jobs over the next two years.

However, The Telegraph notes that HMRC have accused the PCS of "scare-mongering".

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"

Online Submission Problems

Can anyone help Sandra with her query posed on AccountingWeb?

Is anyone else having this problem?

I submitted a tax return on hmrc's website, using their online software. I keeping getting this message>>>>>>

'ERROR: We cannot verify that your return was successfully submitted to HM Revenue & Customs. Please click 'Next' so that we can do this now and verify your return was submitted'

On clicking next I get this message>>>>>

System busy
We are not able to confirm that your return has been successfully received

I've spoken to HMRC helpline about this several times and each time, they tell me their IT department is dealing with it and they cannot tell me how long it would take to resolve.

I'm a bit concerned as i submitted this return about 3 weeks ago and it seems a long time to wait for this to be resolved.

Has anyone on this board encountered this type of problem and what did they do to resolve it?

Many thanks

Sandra

I wonder if HMRC have considered "turning it off and turning it on again"?

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"

LOL!

SIR - Following the result of using the Royal Mail recorded delivery service, I have a cunning plan to save people money during the credit crunch.

I sent a very important cheque for my tax return to the tax man by Royal Mail recorded delivery.

I went online each day to check the progress of the letter.

After six days the letter had not 'arrived', but my bank statement showed the cheque had been cashed!

I continued to check the progress of the letter, but after 21 days, according to the Royal Mail computer, it still had not been delivered.

I phoned the Royal Mail and was told that large numbers of letters to places like the tax return office were checked only with a list of the recorded letters, so that it only requires one signature for the lot.

My letter was still reported as undelivered, so I sent a letter of complaint and received an apology and a book of six first class stamps.

So here is my cunning plan:

Buy 50 cheap envelopes and send them (empty) to HMRC Accounts Office BD9 88AA by second class recorded delivery. This will cost about £50, including the envelopes.

Wait 21 days and fill in a complaint form at your local post office for each non-recorded delivery (they won't be recorded).

You will receive 50 apologies and 50 books of six first class stamps, valued at £108.

That's a profit of around £58.

What can possibly go wrong?

Cheers.

Bruce Piggott (electronic engineer retired), WGC.

Source Welwyn and Hatfield Times 24.

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 Hammer To Crack a Nut

Brian Collins, chief scientific advisor at the Department for Transport and the Department for Business, spoke at a conference recently about last year's Datagate scandal when HMRC lost the personal details of 25 million people.

He said that the loss should have been prevented, and that the system should have flagged up a warning not to transfer such large amounts of personal data onto unencrypted discs.

"The system design should never have allowed the [data loss].

They should be designed to stop people going off the edges of what is acceptable. Why are we not doing this?

Because it costs."

Maybe so, most certainly about cost cutting leading problems wrt security and service levels. However, he ignores the fundamental issue wrt Datagate namely that the data was sent by courier on an unencrypted disc.

No expensive system add on was needed to "flag up" that using couriers and unencrypted discs to transfer sensitive data was just daft. Decent procedures and training should have covered that point.

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 Policy Illegal

BAT has won its challenge to HMRC over its policy of taxing dividend payments from foreign subsidiaries. The policy is illegal under European law, because the UK does not tax similar payments from domestic companies.

HMRC may well appeal against this verdict, as this ruling might cost it £5BN.

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"

Cost Control?

Poor old Stephen Timms (Treasury minister) is having a rather rough week this week, having first signed off on the secret VAT increase he now has been forced to admit to parliament that HMRC has no accurate cost estimates over the 25 major IT projects that they are running.

Best guess estimates are that these projects are costing the taxpayer at least £197M, small money compared with the billions that the government has risked on bailing out various banks etc.

In a parliamentary written answer Timms said:

"Many of our IT projects are at an early stage in their development lifecycle, and detailed technical solutions and IT supplier costs are yet to be established.

The figures shown below are therefore estimates and remain subject to revision, finalisation and formal investment approval."

That's all very well, but other departments have managed to provide more accurate estimates for their IT projects, and the private sector obtains cost estimates and project specifications before going ahead with projects.

Why can't 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 Secret VAT Increase - Darling Tells a Porky?

In an emergency Commons debate on the pre-Budget today, Chancellor Alistair Darling said that Stephen Timms', the financial secretary to the Treasury, name had ended up on the web document outlining the 18.5% VAT rate by mistake.

Darling claimed Timms had not seen it, or authorised it.

Ahem!

The Guardian says that the web document contained Timms' signature.

Is Darling saying that Timms signs documents that he doesn't read?

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 Secret VAT Increase

Gordon "Smiler" Brown and his Darling Chancellor were somewhat humiliated yesterday, when it emerged that they had been planning to increase VAT to 18.5% in 2011.

This embarrassing plan was revealed when a document signed by Stephen Timms, a junior Treasury Minister, was published on a government website. The hard copy version, also signed by Timms, shows no VAT rate of 18.5%.

The web version has now been removed.

Now here is where the politicians seek to cover their shame. Treasury minister Angela Eagle said that the publication had been:

"..a pure administrative error on the part of HM Revenue and Customs.

For anyone to think it is anything else is complete scaremongering and opportunism of the worst sort."

HMRC stated (as per the Guardian) that the VAT increase had been a fully worked-up option, that had been ditched at the last moment in favour of the 45% tax rate on those earning more than £150,000.

I am of the view that the buck should stop with the people who claim to be in charge of HMRC. Given that these plans were discussed at Treasury level, and signed off by a Treasury Minister, then the responsibility for the dissemination of the "correct" plans lies with the Treasury.

This is not an HMRC cock up, but a Treasury cock up; for Eagle and her colleagues to "rat out" HMRC in this way is a pretty lousy trick. However, many politicians are pretty lousy anyway.

Doubtless some poor sap in HMRC will be ritually sacrificed to protect the "honour" of the Treasury.

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"

Breach of Confidentiality?

HMRC have caused a wee upset amongst the accountancy profession, when it was revealed that names of some taxpayers who failed to declare offshore banks accounts have been passed on to an independent research agency.

What happened to the concept of confidentiality and data protection?

HMRC have sent letters to some of those who came forward during last year's partial amnesty on undeclared offshore accounts. The letters say that names and telephone numbers will be passed on, unless the recipients opt out.

Would it not have been better to ask people to opt in instead?

That being said, the idea behind the research is laudable enough in that it aims to gain an understanding of customers' experience of the offshore disclosure facility.

Sadly the opt out method used by HMRC to "understand the customer's experience" is crass, and may also be a criminal offence under the 2005 Commissioners for Revenue and Customs Act. HMRC guidance says information can be passed on with consent, the Data Protection Act says consent should be "a positive indication of the wishes of the data subject".

HMRC deny it breaches the act and notes that there are strict safeguards, as the research company has been subject to rigorous security checks.

However, I would say, as a general rule of thumb that people like to be asked first before being "volunteered" for eg surveys, organ donor schemes etc.

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"

Poverty

"Tax Credit Casualties"
MEDIA RELEASE FOR IMMEDIATE USE

19 November 2008
Tax Credit Casualties Addressing Child Poverty
The Joseph Rowntree Foundation recently published a report stating that child poverty costs at least £25billion each year in losses to the Exchequer and in reduced GDP.

Thanks to the intervention of Tax Credit Casualties, just the last 33 cases they have progressed to write-off have saved those claimants £152,900 – which in turn has saved the Exchequer, as every pound saved for claimants by Tax Credit Casualties helps to reduce child poverty.

Paula Dean, Tax Credit Casualties' award-winning case worker, said: 'We will continue to help claimants fight cases where they believe overpayments were caused by HMRC's errors and we will continue to fight for an amnesty on all such overpayments. It is not in the best interest of our society to seek to recover these overpayments when recovery means children will suffer poverty. And from the work of the Joseph Rowntree Foundation it is clearly not in the interest of the public purse to push these families back into poverty.'

Tax Credit Casualties work to address child poverty by helping the victims of tax credit overpayments know their rights, and fight recovery of overpayments which are not the claimants' fault. The errors are often caused by software problems, HMRC operator error and faults inherent to the tax credit system itself. Our work helps families on low incomes having to choose between putting food on the table or shoes on their children’s feet, by repaying a debt they didn’t cause and are not responsible for.

Paula also said: "We encourage anyone else who finds themselves in this or a similar situation with tax credits to contact us via our website address which is www.TaxCC.org"

For further information contact:
Sarah McCall
National Coordinator
07947439959 (out of hours included)

Note to editors: Full details of the Joseph Rowntree Foundation's report can be found at http://www.jrf.org.uk/pressroom/releases/231008.asp
Tax Credit Casualties
www.TaxCC.org

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 New Flowchart

Accounting Web reports that HMRC have designed a flowchart to help agents identify whether or not "reasonable excuse" for late filing will apply to individual cases.

Excellent!

In the event that the agents cannot understand the flowchart, or need more help with it, agents are advised to contact HMRC Agent Priority Lines.

However, there is one small problem.

Can you guess what that is?

Yes, that's right HMRC's agent advisers at present do not have knowledge or access to the same flowchart.

Errmmm...why not?

Seemingly, according to Accounting Web, the Priority Line will offer "tea an sympathy".

Two lumps please!

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"

Repayment Delays Hurt Businesses

Andrew Lloyd, a Baker Tilly tax partner, has stated that 46% of claims handled by their Liverpool office for tax refunds were affected by delays.

He is quoted in the Liverpool Echo:

"In some cases, HMRC offices are honest enough to say that the delays reflect a resource issue.

In other situations, we are almost at the stage of HMRC promising the 'cheque is in the post' with the worst-affected refunds outstanding for many months for no good reason.

It's apparent that tax refunds arising from online filing of returns, where the claimant has provided bank details, are dealt with more quickly than paper-based filings and cheque refunds.

With businesses and individuals feeling the financial squeeze, it's inexcusable if HMRC are hanging on to tax refunds longer than they ought to."

An HMRC spokesman is also quoted:

"We never delay repayments without good reason.

Repayments claimed online are inevitably processed more quickly than those requiring clerical processing but the vast majority of self-assessment claims are being processed as normal."

It seems that the taxpayer is faced with a catch 22 situation, online filing may result in faster repayment of refunds. However, the online system is not yet working well enough for people to feel confident in using it.

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"

Security Petition

Those of you who believe that HMRC security should remain "in house", and not privatised, may find the following online petition to be of interest.

We the undersigned petition the Prime Minister to Stop plans for the Privatisation of Security 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"

Misleading

It seems that HMRC became a wee bit over enthusiastic when it executed search warrants for Mercury tax Group, a tax consultancy in Leeds, in 2007.

The High Court has ruled that the warrants were unlawful.

Mercury Tax Group and its managing director, Neil Masters, won a ruling that HMRC failed fully to disclose material relevant to its suspicion that a tax avoidance scheme operated by the company was dishonest.

Mr Justice Underhill said Leeds Crown Court was "misled" into granting the warrants.

He stated that it was a borderline case for the deployment of the "nuclear weapon" of search warrants on not just business premises but the private homes of individuals.

Adding that HMRC was under a duty to put its case "with scrupulous accuracy and in such a way that the judge was able to made a fair assessment of the grounds for suspicion being put forward.

That did not occur."

In the tax year 2002-03 Mercury operated a tax avoidance scheme on behalf of around 23 clients. HMRC began investigating in 2004, in November 2007 it executed search warrants at three Mercury offices, Mr Masters' home and the homes and several office addresses of 22 of the clients.

In its judicial review challenge, Mercury noted that it had already supplied all the documents required by HMRC, who said its requests for information had been satisfied in full. It sought the return of all documents seized in the searches of its premises.

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"

New Head of HR

Accountancy Age reports that Mike Clasper (one of the "committee of three" running HMRC) is to recruit a new head of HR for HMRC.

As noted, the job spec requires the new HR head to inspire the thousands of demoralised staff whilst making a few thousand redundant.

Any takers?

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"

Hat Tip

A hat tip to Blevins Franks for recently mentioning this site on their blog.

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"

Fragmented

The National Audit Office published a report last week that stated:

"The fragmented nature of the customs regime within the department, a lack of accountability and incomplete management information has hindered effective oversight of its performance and risk management."

The merger of Customs and Revenue has damaged both departments, yet produced very few positive outcomes.

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"

Interest Rates

Now that the banks have succumbed to pressure from Alistair Darling to cut their loan rates, in response to the 1.5% cut in rates by the Bank of England last week, when will HMRC cut their rates?

Currently HMRC charges 6.5% on overdue tax.

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"

Failing Memory?

The House of Commons Treasury Sub-committee put the boot into HMRC last week, over the £88K payoff to Stuart Cruickshank (the ex CFO of HMRC).

The sum is believed to include costs for Cruickshank's legal advice and "outplacement counselling".

Cruickshank took the role in December 2006, and left in March 2008.

At the time of the announcement about his departure HMRC were reluctant to talk about how much his severance pay would be.

Now that it is out in the open, MP's are puzzled.

George Mudie MP said:

"If we are paying somebody £88K to break their contract ... they should be paying us."

Dave Hartnett told the committee that Cruickshank had not necessarily wanted to go "at that time".

How odd that, at the time, HMRC told The Times:

"Stuart Cruickshank, the Revenue claims, was on a 'standard Civil Service fixed-term appointment contract' and was always expected to leave".

Hartnett appears to have forgotten this.

Anyhoo, he has agreed to provide further details of the payout.

But added:

"We needed a chief finance officer committed to HMRC."

Odd to imply Cruickshank wasn't committed, given the article in The Gasette Autumn 2007 that I referred to in January 2008:

"The really odd thing is that reading page 12 of The Gasette (The magazine for government finance professionals) Autumn 2007, I get the distinct impression that Cruickshank, and indeed The Gasette, thought that he would be around for longer than a year".

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"

Shades of Nelson

Dave "Nearly Man" Hartnett evoked memories of Nelson's "I see no ships" during a recent "guest" appearance at a discussion in the House of Commons.

Despite the fact that nearly 15,000 staff have resigned from HMRC since the merger in 2005 (3,000 ahead of HMRC's target), Hartnett (now permanent secretary for tax at HMRC) said he was not aware of any forced redundancies.

"There have been no compulsory redundancies that I'm aware of in the last few years."

There are of course many ways to make someone resign, as Hartnett knows, without having to fire them.

Ironically, despite this mass exodus, HMRC's operating costs are up by £192M.

Jim Cousins MP, like many others, is somewhat baffled by this contradiction.

Hartnett, whne questioned about it, said that there were "any number of reasons" (ie he didn't know) for the cost problems "to do with the running costs of IT systems and child benefits".

Hartnett may well have evoked memories of Nelson, but he and the other two on the "committee of three" who claim to now be in charge of HMRC are most certainly not modern day versions of Nelson.

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"

Discipline

Parliamentary answers reveal that 192 officials from HMRC were disciplined or dismissed "for alleged breaches of data protection requirements and inappropriate use of personal or sensitive data" in the past year.

None of the dismissals at HMRC were related to last year's Datagate scandal, when the personal data records of 25 million people were lost.

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"

SDLT

HMRC is doing its best to encourage people to file their tax returns online. In fact HMRC are targeting all strata of society, including solicitors and conveyancers.

Now, given the fact that house sales have fallen through the floor, you would have thought that filing property transactions online would have been a relatively simple task?

You would have thought that, wouldn't you?

Sadly no!

File a transaction via paper, and the SDLT (Stamp Duty Land Transaction) certificate takes around 6-8 weeks to be issued.

Surely online filing is faster?

No!

This from the SDLT help desk:

"HMRC systems are currently responding slowly to all SDLT e-submissions.

If your submission does not complete, return to the form later and to click the 'Check Progress' button.

We advise you to refrain from submitting further returns until we have an update from HMRC, unless the return needs to be made today, in which case by attempting to submit you will have an audit trail to prove you attempted the submission.

HMRC are aware of the issue..."

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"

Halloween

Beware as you carve your pumpkins in readiness for tomorrow that, aside from ghosts and witches, the 31st is also the deadline for submitting tax returns on paper.

Whooooo!!!!!

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 Question of Qualifications

A wee while ago on this site I noted that HMRC's interim chief financial officer, Philip Moore, was not a chartered accountant (although he is an actuary, 2004 government guidelines stipulate that all CFO's running government departments must be "professionally qualified").

Annyhoo, Moore has now left HMRC to join a defined benefit pension buyout company, Pension Corporation.

Moore's role has now been split between Simon Hopkins, HMRC's director of financial planning and analysis, and Jon Fundrey, financial controller (both of whom are chartered accountants).

Doesn't splitting the role lead to confusion and conflict?

Moore was appointed temporary CFO in January 2008. He will not be lonely at Pension Corporation, HMRC's former chairman (Sir Nicolas Montagu) is on the board there.

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"

Lost in Cyberspace!

Accounting Web report that HMRC online filing still has a "few" gremlins. One being the disappearance of tax advisers' clients off previously filed online lists.

Quote:

"HMRC are absolutely rubbish.

With the first half of this ridiculous split filing deadline for self assessment approaching we've been through our online client list at HMRC and found 15 clients for whom we filed online last year have disappeared from the list.

Why?

Helpdesk haven't a clue.

If we are to be encouraged to file online PLEASE could we have some consistency from HMRC.

Or is that too much to ask?"

Does anyone have any ideas as to where the "disappeared" have gone?

I suspect that those who designed the HMRC system didn't have a clue as to how the tax system actually works, and those that approved its installation didn't have a clue as to how the IT system would work; ie neither the supplier, nor management of HMRC were up to the job.

"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"

Secret Address

Here is an interesting story sent to me by someone about HMRC changing their address, but not being very open about their new address.

My correspondent has for many years sent his VAT return by post using an enclosed brown envelope, and recorded delivery to ensure proof of sending.

Anyhoo, this quarter HMRC changed the colour of the enclosed envelope to white and the address on the envelope.

So far so good, except for one small problem...the address, whilst it did have a post code, didn't have a town.

In theory, this should still work for recorded delivery; unfortunately there was another problem.

Can you guess what that was?

Yes, that's right, the post office did not/could not recognise the post code (BX5 5AT) on the envelope.

My hapless correspondent then called HMRC, and was given a new postcode (BD98 1YY) to use.

Fair enough, except that the post office will not accept a letter for recorded delivery without a town as well.

Cue another call to HMRC, asking for the town.

Unfortunately, HMRC (for reasons best known to the lady at the call centre) wouldn't give the name of the town (it turns out from a later enquiry that it was Bradford).

Another call, to a more helpful call centre person, confirmed that the printed envelopes had a problem with the post code but that proof of postage can be obtained via a "certificate of postage".

I understand that there has been some trouble with the VAT returns in the period July/August because of this.

I wonder just how many VAT returns have been lost or delayed this quarter because of a misprinted post code on the envelope?

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"

Trouble in Store - 10 November

There may be a one day UK civil service and public sector strike strike on 10 November, hitting passports, Jobcentres, Tax Credits, immigration and customs, as well as driving licences, coastguards, driving tests and museums.

"There is a three week opportunity to avoid damaging industrial action, where the government can pay heed to the Bank of England's warning on the economic consequences that the squeeze on wages is having." Mark Serwotka, PCS general secretary.

The one day strike, which will be followed by an overtime ban throughout the civil service, comes as civil and public servants across the UK face mounting pressure on their finances as a result of the government's public sector pay cap.

Source PCS

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"

Who's In Charge? II

On 15 October I asked:

"So, who exactly is now in charge of HMRC out of the above three people...ie where does the buck now stop?"

Yesterday the FT asked the very same thing:

"The Revenue, which last year scored an own goal when it lost computer discs containing half the nation's bank details, also seems to have a plethora of chiefs. Instead of one boss - it used to be Paul Gray, who stepped down after the discs fiasco - it now has three. There is Mike Clasper, new chairman of the Revenue, though he is non-executive and part-time. Now Lesley Strathie, head of Jobcentre Plus at the Department for Work and Pensions, is to become chief executive officer, though she will be responsible mainly for the day-to-day running of the department rather than policy advice to ministers. Meanwhile, the affable Dave Hartnett, who has been acting head of HMRC, is to become permanent secretary, in charge of tax. I understand the smart money is on Mr Hartnett to call the shots even though Ms Strathie will technically be the boss.

I am told this uncertainty over who is going to be in charge has meant some Whitehall heavyweights refused to apply for the Revenue's top job - despite encouragement to do so. The names mentioned include Helen Ghosh, senior official at the environment department, Sir Leigh Lewis, head of DWP, and Rachel Lomax, former deputy governor of the Bank of England. "They wouldn't touch it because they felt accountability there was in such a muddle," says one senior figure.....

So which of HMRC's three bosses is going to be in charge of lost discs? "All three will have responsibility for data security.."

This muddled arrangement clearly will not work, and is an accident wating to happen.

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"

Training Counts

I understand that managers from the Customs side of the merged HMRC are being allowed to sign off contract settlements (these are the legally binding documents signed at the end of an enquiry).

Prior to the merger with Customs, senior Revenue inspectors would sign off the cases after a settlement was agreed.

Nothing wrong with that, if the Customs managers are trained in tax compliance.

The trouble is, according to my source, they aren't.

Maybe HMRC should ensure that those who sign legally binding documents receive the necessary training first?

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"

Gerrymandering

HMRC have been accused of "gerrymandering" a consultation exercise, in order to undermine union opposition to the proposed closure of certain Scottish HMRC offices.

That at least is the view of the Public and Commercial Services Union (PCS).

The PCS said that it was "disgusted" at the way staff at Dundee's Sidlaw House office, not affected by the proposals, had been included in an assessment of responses with the result that opposition appeared considerably diluted.

Approximately 70 jobs may be lost from Dundee and Perth.

The consultation process ran from June 11 until August 6, HMRC staff across Scotland were invited to pass comment on the closure proposals.

Sidlaw House workers were told that their jobs were safe.

John Oswald, the local union leader, described the inclusion of Sidlow House staff in the consultation as "underhand and despicable gerrymandering". Their inclusion diluted weight of the responses of affected staff to 27%.

Mr Oswald told the Evening Telegraph:

"This manipulation of figures is designed to undermine our campaign in the worst possible way. Members across Scotland, worried for their jobs, have been using this consultation to show their opposition to closure.

The department must either discount Sidlaw House from the review or reopen the consultation, hold meetings with the staff and actually directly invite them to contribute."

HMRC trying to manipulate the results of a consultation?

Surely not!

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"

Time Travel

I see that HMRC are now employing Timelords, that at least can be the only explanation for the strange phenomenon noted by one correspondent.

He sent me a copy of the HMRC website confirmation of the receipt of a recently submitted client's tax return for tax year end 2008.

The confirmation states quite clearly that the return was received on 20 February 2008.

Has anyone else had this happen?

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"

Who's In Charge?

Congrats to Dave "Nearly man" Hartnett on his appointment as new "permanent secretary for tax".

Congrats to Lesley Strathie who has been appointed as the Chief Executive Officer of HM Revenue & Customs.

Both of the above appointments were announced by Mike Clasper (Chairman of HMRC).

So, who exactly is now in charge of HMRC out of the above three people...ie where does the buck now stop?

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"

Diary of The Damned

A warm welcome to the blogosphere to The Diary of The Damned "where victims of Tax Credit overpayments speak out, using their own words".

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"

Phish Warning

Be warned, the following phish is doing the rounds at the moment.

The email, allegedly from HMRC, invites the recipient to click on the link and submit personal data.

It is of course scam, HMRC do not send emails out asking people to submit data.

You have been warned.

After the last annual calculations of your fiscal activity we have determined that you are eligible to receive a tax refund of 188.50 GBP. Please submit the tax refund request and allow us 6-9 days in order to process it.

A refund can be delayed for a variety of reasons. For example submitting invalid records or applying after the deadline.

To access the form for your tax refund, please click here.

Regards, HM Revenue & Customs

© Copyright 2008, HM Revenue & Customs UK.

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"

Money Well Spent

HMRC is doing its level best to reduce its cost base, and save us money.

The post-room at Fountain Court (the HMRC office in Middlesbrough) is being closed down, consequently letters issued by staff are not being picked up by the Royal Mail.

Therefore all letters issued from Fountain Court are now sent to Benton Park View (the Wearside HMRC office) to be placed in envelopes and issued from there.

In other words, a letter written in Middlesbrough is driven 40 miles by courier to be put in an envelope and posted.

Great!

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 State of Denial

The Low Incomes Tax Reform Group recently stated:

"The Government are now eager to improve the tax credits system. Yet HMRC are in denial about the extent of the delays in dealing with overpayment disputes and appeals.

One welfare rights adviser sent nine overpayment disputes, one appeal and one backdating request to HMRC between February and June 2008. As of the start of last week, only two had been acknowledged as received, and only one had elicited any substantive reply."

Read more on the LITRG site.

Denial does not help anyone.

Maybe someone could organise an "intervention"?

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"

Envelope Ban

HMRC is pushing ahead with its plan to force taxpayers to file VAT returns online.

Its latest tactic is to phase out pre-paid envelopes which it used to supply.

Malcolm Winston (UHY Hacker Young partner) is not impressed, he is quoted in the Birmingham Post:

"This is unfortunate timing as HMRC's recent data loss scandal is still fresh in everyone's mind. You would think that they would be a bit more sensitive to taxpayers' concerns before they tried to railroad them all into filing online.

There are still quite a few personal and business taxpayers who either don't have access to broadband or who are still very nervous about lodging sensitive financial information online."

HMRC claim that the phasing out of pre-paid envelopes is in line with the private sector.

However, that is not a fair analogy, as people have a choice as to which private sector organisation they use.

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 Question of Security - Don't Employ Illegals

Security is an important issue for HMRC, given the fact that HMRC holds personal data on every tax payer in Britain it is vital that the data is held securely.

Therefore it is disappointing to learn that seven immigrants lied their way into security jobs at HM Revenue and Customs (HMRC) with forged documents last year.

They worked for a contractor that guarded customs buildings before they were identified in December.

Since then one of the workers has been arrested, five have resigned and the other is on maternity leave while her immigration status is investigated.

This information belatedly came to light after a Freedom of Information request.

HMRC said the latest revelations had been exposed after a routine check on paperwork found "irregularities".

Shouldn't the paperwork be checked before employing people?

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"

Surely Not?

Is this for real?

"I have heard that in HMRC offices which do not have lockable storage for files/papers staff have been instructed to turn papers and files face down at the end of each working day "so as to keep them secure"... I kid you not!!!"

Source

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 Electric Commode

You will recall that I recently wrote about HMRC "management" imposing a rule whereby HMRC staff have to complete a spreadsheet every time that they go for a loo break, and advising staff not to drink so much.

One reader even commented that he/she had been threatened with a written warning over loo breaks.

Clearly there are issues within HMRC wrt toilets and lavatorial issues (anally retentive issues I would surmise), Freud doubtless would have had a field day.

Anyhoo, in the interests of improving morale and efficiency, I have designed a most excellent chair for staff to use when they are at their desks which would negate the need for them to go to the loo.

Ladies and gentlemen may I present "The Electric Commode".

I think you will agree it's a real winner, and the efficiency improvements will more than outweigh the capital costs.

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"

But For a Ha'peth of Tar

I understand that in the aftermath of HMRC's Datagate scandal last year, when HMRC lost the personal details of 25 million taxpayers, HMRC management have instructed all HMRC staff to remove customer correspondence from desks and lock it in a secure drawer/cupboard when they leave the office.

I am not quite sure how that will prevent another Datagate. However, it is a good security measure.

Unfortunately, there is one problem.

A large number of staff in number of offices do not have lockable drawers.

Fair enough, buy some locks then!

Unfortunately, HMRC cannot afford to do that.

Therefore staff have been instructed in at least one office to remove all customer correspondence from their desks when they leave the office, and put it in a large unlocked cabinet!!

Ehh?

A brilliant solution is it not?

Not only does the correspondence remain unlocked, but it is helpfully gathered together in one place so that anyone (eg cleaners, journalists working under cover etc) wishing to have look can do so with ease.

Quite why the powers that be think that this is more secure is beyond me.

A cynic might suggest that the "clear desk" policy has nothing to do with security, but is in fact a means of making HMRC processes seem more "outsource friendly".

Clear desks, in theory, mean easy and simple processes!

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"