Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.
Accountancy Age report a small, but significant, victory by a taxpayer over the delays and obfuscation of HMRC.
H W Vaughan, a firm based in Swansea, overpaid its tax last year and then spent months sending letters and making phone calls trying to get a £15K refund it was owed.
Seemingly the query was passed between different HMRC employees, and paperwork went missing on several occasions.
The rebate finally materialised last month, along with an agreement from HMRC to pay £500 demanded by H W Vaughan to cover the cost of the letters and phone calls.
Others, who have experienced delays and incurred costs because of HMRC delays, may well care to take note of this.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
Nationwide and HMRC are having a few interesting exchanges over HMRC's request to Nationwide to disclose details of its customers with offshore accounts.
The Times quotes Nationwide:
"Nationwide has been in active discussion with HMRC on this matter.
However, we do not believe our records enable us to identify those customers who live in the UK and have an offshore account.
We have already informed HMRC of this, but inquiries are ongoing".
Doubtless the same discussions are ongoing with other building societies.
I wonder if the extra tax revenue earned will cover the admin costs incurred wrt this fishing trip by both HMRC and the building societies?
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
I see that a whistleblower has told The Mail on Sunday that HMRC have issued orders earlier this month for call centre operators to handle incoming calls in a way that will make them last around three minutes longer.
According to Which? a 10-minute call from a BT landline to a normal geographic line costs about 40p at most, while the same call to 0845 number could cost up to 60p (50% higher).
HMRC state that they do not receive money from their phone service provider (Cable and Wireless).
I am sure that they don't.
However, it is more than likely that within their agreement with C&W their is a clause that states part of the revenue that C&W earns from calls should be used to offset the fees it charges HMRC.
I guess the cost of a phone call to HMRC is what one might call a stealth tax?
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
There appears to be a wee bit of confusion in the HMRC bunker over the rules wrt its recently announced tax amnesty for undeclared offshore accounts, and the treatment given to those with accounts in Liechtenstein.
International Adviser reports that the confusion may allow tax evaders to switch assets to Liechtenstein, in order to benefit from the less onerous fine.
There are two disclosure facilities:
- The Liechtenstein Disclosure Facility (LDF)
- The New Disclosure Opportunity (NDO).
Both require filing notifications of intention to disclose by 1 September.
There appears to be the opportunity for tax evaders to move their undeclared offshore holdings (outwith Liechtenstein) to Liechtenstein, and declare under LDF rather than NDO.
International Adviser (IA) asked HMRC about this and was told that the LDF was:
"only for new or existing investments [in Liechtenstein] at 1 August 2009".
However, in response to another IA query, HMRC apparently said that individuals with investments that have been made directly with offshore financial intermediaries "will be able to move their money to Liechtenstein after the end of the registration period for [the] NDO, and then use the full terms of the Liechtenstein disclosure facility".
The LDF offers a 10% cap on the penalties, compared with the 20% cap on NDO.
In its statement today, HMRC said:
"HMRC has the legal power to obtain information on investments where they have been opened through a UK branch or agency – say a branch of a bank in the UK.
Anyone with investments of this sort could move their investments to Liechtenstein after the end of the registration period for NDO, and use the Liechtenstein disclosure facility.
But they will get the same terms as the NDO.
People with investments they have made direct with offshore financial intermediaries will be able to move their money to Liechtenstein after the end of the registration period for NDO, and then use the full terms of the Liechtenstein disclosure facility.
They will of course have to disclose everything to HMRC in that case, or the new Liechtenstein laws will mean that they have to remove their investments or face sanctions."
Well, I am none the wiser.
Maybe HMRC are being paid commission for advertising Liechtenstein as a tax reduction opportunity?;)
Or maybe they simply haven't thought it through yet?
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
If offshore tax havens are so evil, in the eyes of the Treasury and HMRC, why are HMRC's buildings subject to a sale and leaseback deal with Mapeley PLC (a property company based offshore in Guernsey)?
"In April 2001 we purchased the portfolios of the department of Inland Revenue, HM Customs & Excise and Valuation Office Agency (since merged into HM Revenue & Customs - HMRC). These portfolios totalled 147 freehold properties and 454 leasehold properties. Our agreement with HMRC includes 20 year sale and leaseback and the provision of comprehensive property and facilities management services to most of the HMRC estate.
As at 30 June 2008, the total value of this portfolio was £526.8 million.
Under this contract we own the freeholds and manage the leaseholds occupied by HMRC as principal (we take the risk of rising rents and we benefit from falling costs), provide a full facilities management and carry out construction fit-out works on behalf of HMRC to a pre-agreed price."
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
It seems that HMRC have made a bit of a "boo boo", and confiscated fags that they shouldn't have.
The Independent reports that fags seized from tobacco smugglers over the past eight years will have to be returned, because Customs officers unlawfully confiscated their assets.
HMRC are are re-examining approximately 4,000 cases, where confiscation orders were granted to seize the assets of people involved in fag smuggling.
HMRC may have to pay it all back, plus legal costs and compensation.
The law changed in 2001, only the masterminds and those who smuggled the fags have to pay the duty, unfortunately HMRC didn't spot the change in the law until last year.
HMRC face having to return up to £88M of tobacco smuggling assets, before costs and damages.
As Paul Holmes, Liberal Democrat home affairs spokesman, says it's "a complete farce".
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
The Independent Certified Practicing Accountants Group claims that HMRC is taking too long to process tax refunds.
Tony Margaritelli, ICPA chairman, said that refunds are taking an interminable time:
"Most galling is the fact that the revenue has been encouraging accountants to file self-assessment for clients because refunds are automated and should therefore come through within days."
One of the reasons for the delay may well be the new processes being introduced by HMRC.
I am advised that as part of the LEAN programme (or Pacesetter as it is now called in National Insurance Contributions Office - NICO), millions has been spent on private consultants (some from Unipart).
The consultants are implementing a production line way of working based on that of the Toyota company.
Fair enough, if it works.
However, I understand that in some departments "customer" waiting time has risen from three days to approximately eight weeks.
I am also advised that HMRC are not allowed to tell "customers" (taxpayers) about the backlog. Meanwhile HMRC presses ahead with implementing this across all departments.
Tax does have to be taxing.
No Stamp Duty Investing
Investing through CFDs enables one to trade without having to pay stamp duty, since there's no physical purchase of the underlying shares. There are risks, so do your homework before investing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
There are two certainties in life, death and taxes.
The Treasury has, over the last 30 years, managed to combine the two via imposing the iniquitous IHT. However, until now, bereaved families have been at least given some time to pay it with penalties for late payment (six months after death) never going beyond base rate.
Sadly, since the government has managed to bankrupt the country it is now desperate for every penny that it can raise in order to pay its own wage bill. As such, HMRC will be increasing the rate it charges on IHT late payments to 3% (2.5% above base).
Ironically, where there is a tax overpayment HMRC will only pay 1% below base rate, with a floor of 0.5% (ie 0.5% at current base rate).
HMRC say:
"Interest is not a penalty but compensation for tax paid late.
We are streamlining the rates charged and paid for interest to simplify and make things fairer for customers.
This has been subject to extensive consultation over the last 18 months and has been largely welcomed by customer groups and their representatives.
The alignment of rates that will take place in September will mean that all tax paid late is subject to interest at the same rate, so ensuring all taxpayers are treated equally.
And in the interest of fairness we will also be introducing a repayment interest floor, to ensure that any taxpayer overpaying tax will receive interest."
- How is it fair to penalise the bereaved in this manner?
- How is it fair to charge 3% for late payments, but only pay 0.5% when tax has been overpaid?
- How can anyone seriously describe taxpayers as "customers"?
- How did HMRC manage to issue such a bullshit statement whilst keeping a straight face?
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
Aside from the civil liberties issues of granting HMRC (ie the state) more power to invade the privacy of individuals, for I suspect precious little reward, who exactly will end up footing the bill for HMRC's forthcoming trawl for information about offshore bank accounts?
Under Schedule 36 of the Finance Act (which came into Wednesday), HMRC now has the power to issue information notices to banks, forcing them to provide data on clients with UK addresses holding offshore investments.
Over 300 banks have been ordered to surrender information about customers with offshore accounts.
Brian Mairs, of the British Bankers' Association, said:
"No bank has any interest in shielding customers who would seek to evade their tax obligations. However, all of them have a duty under the law to keep their customers' affairs confidential.
The affected banks have yet to receive the notices, but once they receive them they will engage with HMRC to understand what information is being sought, whether it is in the power of the bank to provide it and, if so, in what time scale?"
James Bullock, tax partner at McGrigors, is quoted in The Times:
"For the financial institutions concerned this disclosure process is incredibly onerous and costly and they have to foot the bill themselves - even though they are doing HMRC's work for them."
Powers for invasion of privacy and spying should be in proportion to the results expected. I remain to be convinced that this fishing trip will net the government billions in evaded tax receipts.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
The Payroll Alliance is conducting a survey to assess small business owners' views on online filing:
"Currently all employers with 50 or more employees or pensioners on their PAYE reference number are required to file the Employer Annual Return (P35 and P14s) online as well as starter and leaver information (forms P45 and P46).
Under under new legislation (subject to Parliamentary approval) employers with fewer than 50 employees or pensioners will be required to file their End of Year Return online from April 2010 (the 2009/10 Return is due by 19 May 2010) and their starter and leaver information online from April 2011.
HM Revenue and Customs would like to understand the level of awareness about these changes and if you are an employer with fewer than 50 employees or pensioners we would be grateful if you would take a few moments to answer the following questions.
The names and contact details of those who take part in this survey will remain anonymous but the results of the survey will be fed back to HMRC."
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.
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.
As a result of media reports about the possibility of tax work being outsourced to India, the following internal memo was issued by the CEO of Capgemini to all of its staff:
"To all Capgemini Aspire employees
Response to media reports today
You may well have read - or watched - media reports today about Project Quantum, the work initiated by HMRC to streamline and reduce the cost of all its IT services.
As HMRC's strategic IT partner, we are working closely with the Department to continue achieving sustainable value for money for the work we do.
Discussions about the Aspire aspects of Project Quantum have been underway for some time, and although good progress is being made between Capgemini, Fujitsu and HMRC no firm agreements have yet been arrived at. Once we have agreed any changes, we will naturally share them with you.
The media coverage included reference to offshoring sensitive data. HMRC has strongly refuted claims that UK taxpayer data could be processed in India and most press reports carry this correction.
As you are all aware our contract prohibits delivery of any aspect of Aspire from outside of the UK.
Although the concept of offshoring has been debated and explored, there are no plans to change this contractual position as part of Quantum.
I should like to take this opportunity to remind you that, if contacted by the media, you should not make any comment, but ask the caller to contact the HMRC Press Office directly ..."
Aspire is worth about £8.5BN in total over its estimated life.
The key phrase in the memo is this:
"Although the concept of offshoring has been debated and explored, there are no plans to change this contractual position as part of Quantum."
There is a clear desire to outsource, to my view, as they would not have wasted time and money debating and exploring it. There may well be no plans at the moment (were they nixed as a result of the leak and media reports?).
However, plans and contracts can change.
Here, by way of information, is some further background on Project Quantum, a plan to cut costs at HMRC by at least £205M a year, and Aspire.
"Mutual collaboration" between HMRC, Capgemini and Fujitsu is deemed to be the "most expedient route to success".
"Success is predicated upon complex dependencies - so any arrangement has to be treated as a bundle. Many things need to be done in parallel - need do-ability check when choices [are] clear.
We need to create headroom to fund essential change - neither HMRC or [sic] Aspire has additional cash to do this.
We believe there is a solution but it complicates the dependencies.
Early savings drive investment pot for subsequent work. Timing [is] critical again."
The background (extracts of leaked papers) can be read on Computer Weekly.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
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.
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.
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.
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.
It seems that the government and HMRC are considering outsourcing certain IT functions to processing offices in India, in an attempt to save £205M per annum.
HMRC and its main IT contractors Capgemini and Fujitsu are considering outsourcing certain IT functions to India under the Quantum cost reduction project.
Staff, the media and politicians speculate that this may mean that tax records will be sent abroad. HMRC deny this.
However, a leaked memo states that the Quantum project included looking at the "potential off-shoring of some future work".
That would indicate that some records will be sent offshore.
Given the lax security standards of Asian processing centres, this proposal needs to be nipped in the bud ASAP.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
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.
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.
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.
The Treasury has taken pro active measures against the possibility of a major VAT fraud occurring, wrt trading in carbon credits, by zero rating carbon credits.
Fraud in this area so far is estimated to have cost the Treasury a few hundred million pounds.
The fraud occurs when a fraudulent trader sells on carbon credits (bought at no VAT cost from a European supplier) to a UK business with VAT added. The fraudulent trader then pockets the VAT, and disappears without paying the VAT to HMRC.
The action taken by the Treasury is without the approval of the EU parliament, which is normally required for changes in VAT.
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
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.
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.
