Wednesday, 31 March 2010
Undemocratic
The Institute of Chartered Accountants (ICAEW) has issued an unusually strongly worded attack on HMRC wrt to "draconian" new HMRC powers that could force late payers of employment taxes into liquidation.
The ICAEW describes them as "wrong in principle and undemocratic".
The new measures, to be introduced in April 2011, will allow HMRC to demand financial security from businesses that regularly fail to remit PAYE and NI contributions on time or at all.
Businesses that refuse to provide security will be liable to a fine of £5K, as it would be deemed a criminal offence.
Frank Haskew of the ICAEW told the FT that he fears that HMRC's measures will also hit legitimate businesses that have difficulties paying tax because of cashflow problems.
Tax does have to be taxing.
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This isnt the employers money though, it is their employees'. This security has been been required of VAT traders for some time now. Why should this be an issue. And guess what - these are not HMRC's rules they are from HM Govt.
ReplyDeleteIf some invoices are paid late or left unpaid, cash flow can be affected. Its the nature of running a business. Considering the amount of red tape burdened onto the private sector, this move is not a surprise and typical of a dictatorial government. A 5K fine? Perhaps they should try earning 5K in the real business world before plucking such high fines out of thin air?
ReplyDeleteDraconian is exactly what this is.
So to anonymous who posted @18.03 what is your solution ? - you pay when you want, whereas a proud HMRC employee like me has no choice about when to pay my Tax/NIC.
ReplyDeleteFor those of you who think it is okay to cheat on, or delay paying, your taxes, just remember it is the honest taxpayer who has to pay for the shortfall you create. HMRC / HMG are quite right to protect the public purse against parasites like you!
ReplyDeleteI agree with people here who say others should pay their taxes on time.
ReplyDeleteThe only problem I have with the situation is that there are people around here defending HMRC and HMG when both are in a complete shambles. Why should taxpayers pay more and more taxes when it just gets used to shore up a failing organisation like HMRC.
So to anonymous who posted @18.03 what is your solution ?
ReplyDeleteDoes this even require resolving at a time when the private sector jobs are being cut and salaries being slashed?
HMRC want to protect the public purse, I'm all for that. There's more than enough being squandered in the public sector - Look over there! Its all over the news as well.
ReplyDeleteTell you what -pay your PAYE to HMRC whenever you fancy. Use OUR money to improve your cash flow. After all it would only be wasted. And you could use it towards your new Range Rover. Whilst pleading cash flow problems when asked for payment......
ReplyDeleteAnother excuse for biased uninformed HMRC bashing. The 'powers' which HMRC are now able to use are powers that other departments have had for quite some time. The move is to ensure the penalty system is standard across all lines of business.
ReplyDeleteProcedures are there in place so individuals and businesses can come forward should they have problems. And so long as people do what they should be doing it will only be genuine (for want of a better word) fraudsters who are penalised.
But of course any excuse to have a pop at the Revenue ehy?
VAT security as mentioned by another poster has been a power for some time (HMCE) and is targeted at phoenix companies and persistant defaulters (it was always a nightmare to try and get a case to VAT security simply because a rock solid case had to be made). But to be perfectly honest I wouldn't trust Inland Revenue systems or staff with this power. Their reliance on paper files held locally and the terrible case notes on systems will lead to disaster. It would be a great weapon against fraudsters but too much for HMRC to handle in its current state.
ReplyDelete