The Joys of Self Employment

As if it were not already difficult enough starting out as self employed, HMRC have managed to add to the burden by increasing the amount of time it takes to register with them as self employed.

HMRC have issued an apology noting that the turnaround times for newly self-employed people to register will increase to eight weeks, between now and October 31 2010.

It seems that processing times for paper form 64-8 and registrations for self-assessment will also increase over the next two months.

HMRC staff are being moved to "higher priority work", hence the delays in processing these forms.

Maybe the best way to avoid the delays and hassle, and to reduce the admin burden on HMRC to enable them to work on "high priority stuff", is to opt out of the tax system?

Would HMRC and the government approve of that?:)

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Bernard Ingham's View

Unedited, as per The Yorkshire Post:

"WHEN in doubt, set up a committee. That is the politician's answer to everything. It is often an elegant response to a knotty problem because, like Royal Commissions, committees can take minutes and spend years. Just what parties in power, if not the public interest, order.

And so, while his colleagues are culling quangos, Chancellor George Osborne has set up a new one. It's the Office of Tax Simplification, otherwise known as OOTS.

Unfortunately, we are in no position to grumble about OOTS. Osborne said he would establish it two years ago because, as was his wont, Gordon Brown had taken a complex system and complicated it. The new Chancellor has appointed a former Tory Minister, Michael Jack, and John Whiting, a former PriceWaterhouse tax partner, to sort out the mess.

So far so good. But what sort of dog's breakfast has Brown left behind? OOTS' usefulness turns on the answer.

It goes without saying that the tax system is complicated. There are a lot of vested interests behind its complications. As an eminent Scottish lawyer once told me over dinner, budgets were his bread and butter. I gathered that the more impenetrable they made the system, the fatter he became. Gordon Brown was God's gift to tax lawyers.

Since the 1999 Finance Bill, tax legislation has grown at an alarming rate. So have the penal regulations introduced since self-assessment tax returns were issued in 1997.

On top of this came the merger of the Inland Revenue with Customs and Excise in 2004. Rubbing shoulders with tough Excisemen brought up on nabbing smugglers has, it seems, done nothing for the taxman's dubious PR skills.

The result, according to accountants I know, is a deterioration in the relationship between taxman and taxpayer. HMRC are the masters now. I cannot personally testify to this since, in my lazy way, I employ an accountant to devil for me. He is not a complaining sort.

But I am clearly no more representative than is Naomi Campbell of models in taking post-prandial delivery of "blood diamonds" – or "dirty-looking stones" – on her bedroom doorstep. Last year, HMRC records it received 73,455 complaints and has even set aside £30.7m for legal costs in appeals that taxpayers are expected to win.

In the first half of last year, 20,778 taxpayers asked for an independent review – mostly for late filing of returns – and more than half either had the penalty withdrawn or cut.

These figures do not testify to respectful relations between the public and tax collector. Nor does the awesome total of 18 million unresolved cases covering both over- and under-payment Messrs Jack and Whiting clearly have their work cut out.

It may well be argued that, if – and hope springs eternal – they can simplify the system so that I can understand it, the problem will solve itself. But will it? All I hear suggests that it is not just a matter of complexity; it is also one of attitude. In other words, it is not just a matter of bad law; it is a matter of the public servant's approach to the citizen – as I fear it is in so many branches of our bureaucracy.

I speak as one who recognises that avoidance of tax is a national industry and that no Revenue officer should be born yesterday – or expect to be loved.

But the readiness to impose ever increasing penalties, some of which can have serious implications for contractors' continued operation in business, the difficulty of finding and reaching the appropriate office, the time taken to make simple repayments and the excuses offered demand more of OOTS than mere simplification.

It probably does not help that there are competing chartered institutes of accountants in this green and overtaxed land. They surely bear some responsibility for our tax system being up to its knees in the Brown stuff. Perhaps the public would have been better served if they had spent more time on insisting on good law and less on ever more complex methods of tax avoidance in pursuit of their own profit.

It is probably a good thing that OOTS is trying to simplify our hopelessly complex system of providing the wherewithal for the nation's operations. But I trust it also feels it must look at the spirit in which the Revenue conducts its essential business.

Unless it does, Osborne will not realise his ambition of showing the world that Britain really is open for business. It must clear the air as well as the Statute Book."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Well and Truly Plucked!

Research carried out on behalf of HMRC, by TNS-BMRB, shows that approximately 20% of large British businesses have considered relocating abroad for tax reasons and that 64% of large companies feel that the red-tape burden had increased over the past 12 months.

The Telegraph reports that UHY Hacker Young have analysed the research, and concluded that businesses thought HMRC was becoming less transparent in its decision-making.

Roy Maugham, tax partner at UHY Hacker Young, is quoted:

"UK companies feel that they are the goose that has been well and truly plucked by HMRC and the Treasury."

He went on to say:

"However, these results show businesses are increasingly dissatisfied with the way the tax system and HMRC is working."

It is not just large businesses who are "dissatisfied" with the way HMRC is working, it is also SMEs, individual taxpayers and the staff of HMRC.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Data Migration Issues

My thanks to a loyal reader who sent me this the other day, relating to data migration issues at HMRC, and has given me permission to share it:

"In the last couple of weeks I have been told by HMRC staff that I was not authorised to act for 2 different clients. Both clients have been with me for 7 years, and I have never had any problems dealing with their affairs.

After considerable frustration I believe I have the situation resolved thanks to being able to prove that I had been dealing with HMRC for these clients for several years. In one case a copy of the original 64-8 did the trick!

The thing that I find so frustrating is that HMRC is forgetting that they have changed the system for authorisations significantly, and in fact the real problem is that they have failed to transfer the authorisations for agents correctly as new systems have been introduced."

Anyone else experienced similar problems?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

The Sword of Justice

The FT reported last week that HMRC are apparently going to adopt a less "combative approach" to resolving tax disputes with businesses.

It seems that there is a "logjam" of legal cases relating to the "contentious" issue of avoidance, which are very expensive in terms of both time and money.

Even Dave Hartnett, permanent secretary for tax at HMRC, has expressed concerns that maybe HMRC have been a tad "heavy handed":

"HMRC is packed full of very intelligent people, but we are sometimes too black-and-white about the law."

He went on to comment on HMRC's litigation strategy, which was introduced in 2007:

"I think we got it a bit wrong in the way we explained it to our people. They thought it was a great sword of justice."

Oh Lord!

"Sword of Justice!?"

Dear oh dear, the thought of unelected civil servants viewing themselves as some form of super heroes, on a mission to "save the world from evil", is rather alarming.

Kudos to Hartnett for recognising, and admitting to, this problem.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

A Pig's Breakfast

Earlier this month I wrote:

"HMRC's plans for revamping PAYE, aka "The Centralised Deduction Plan", which in theory would give HMRC real time information from companies about income and deductions as a platform for centralising the calculation and deduction of tax, NIC and student loan repayments, have come in for some criticism.

Aside from the deep routed scepticism about HMRC actually being able to create an IT system that could do this, tax professionals also note that the plan would move the responsibility for undertaking the calculation away from employers and place it fully with HMRC."

Those who profess that this is a good idea may care to flip through the report by the Comptroller and Auditor General into HMRC's 2009/10 accounts.

John Stokdyk of Accounting Web has done the leg work and notes:

"The scale of HMRC's difficulties in introducing a new system to manage PAYE codes has emerged in an appendix to the department's 2009-10 accounts.

A report prepared by the Comptroller and Auditor General to accompany the annual HMRC accounts (2.7MB PDF) devotes several pages to the problem, and estimates that if 18.2m unresolved 'open' cases are taken into account, a net figure of £1.6bn in repayments may still be outstanding going back to 2007-08 and preceding tax years....

The problems with the PAYE system have been evident for years, and paved the way for a major overhaul to standardise numerous separate systems into a single database for employee records.

The National Insurance and PAYE Service (NPS) went live in a phased implementation that started in June 2009, more than two years’ behind schedule. The decision to delay the project was made to protect the integrity of the PAYE system, but built up a huge backlog of PAYE returns in 2007-08 and 08-09.

The deferral cost the department an extra £33m and prevented it from realising some £55m of planned efficiency savings during 2008-09 and 2009-10. Further changes, including improved security measures, added a further £78m to the cost of the project. Based on its revised figures, HMRC expects to save around £532m over five years, and to recover its investment of £389m by 2013.

In spite of introducing the new system, PAYE processing errors increased in 2009-10, amounting to £132m in underpayments (a 15.7% increase) and £238m in overpayments (a 148% increase). The department discovered that going live with a high volume computer system that wasn’t adequately scoped or tested was a sure way to foul things up even more.

Before migrating 54.3m live taxpayer records from 12 regional databases into 45.4m employment records on the new database in June 2009, HMRC neglected to validate the integrity of the information, assuming that its new exception processes would be able to correct inaccuracies as the system received new data from employers.

'Evidence from the initial operation of the new Service suggests that the Department did not fully appreciate the extent of risk from data inaccuracies or its implications for the delivery of PAYE,' observed the NAO report.

The capability to reconcile many of these discrepancies within the new system was not available until the third phase of the project in April 2010, which meant that more than 7m over- and underpayments were unreconciled when it came to run the 2010-11 annual coding exercise. These records will now be processed from August 2010, although it is not yet clear how many cases will clear automatically and how many will be left for manual working.

When the new system encountered an employee that it could not match to existing employment data, it automatically generated a new, erroneous employment record. So many new items were appearing that when HMRC processed 2008-09 data on the system, it exceeded its 12.5m capacity for open items. The 7m work items arising from 2008-09 returns had to be removed from the workflow queue rescheduled for processing in August 2010.

'The Department found that the new service had produced significantly more amended tax codes than expected, with the potential to generate up to 25.8 million coding notices, almost double the amount anticipated. A significant number of the codes generated were incorrect.'

While its computer was churning out coding notices, HMRC only really became aware of the problem as the volume of calls mounted to its contact centres – which peaked at more than 18,000 calls per day about erroneous coding notices.

In January 2010 HMRC put in place a recovery programme to identify and prevent the issue of any further incorrect coding notices to individuals and ensure that corrected coding notices were issued to employers in time for the 2010-11 tax year. At its peak, the department assigned a total of 3,000 staff to the project, including 2,400 who were switched from their usual work supporting personal tax customers.

At the end of June 2010, estimated a further 2m records were at risk and needed review and will begin bulk processing of 2008-09 reconciliation this month."

Two questions from this now arise:

1 Are HMRC capable of, or indeed should be trusted with, setting up a real time PAYE system?

2 Were they to set up the real time system, the current system with its flaws and extensive ongoing work on corrective actions, would become redundant. Exactly what would have been the point of introducing the new system only to bin it?

A pig's breakfast by anyone's standards!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Teamwork

In a bizarre display of teamwork, normally reserved for serving the taxpayer or committing fraud for personal gain, seven HMRC staff members have been sacked for collusive racial misconduct wrt tampering with records resulting in minority ethnic claimants being underpaid child benefit.

The gang of seven were sacked on Tuesday from the HMRC contact centre in Belfast, after the results of an internal investigation were finalised. Two others resigned when the inquiry was launched earlier this year.

According to reports they tampered with computer records, which meant that a number of people from ethnic minority backgrounds across the UK were paid less money than they were entitled to.

The investigation began in January, when a customer complained that his/her records had been changed.

It also seems that computer records for other minority ethnic customers across the UK have been changed, meaning 17 people did not receive the benefits that they were entitled to.

All those affected have been reimbursed. It is not clear how much money was underpaid.

Dave Hartnett, permanent secretary for tax at HMRC, is quoted in the Guardian:

"The vast majority of our people are entirely professional and one of the ways we support that professionalism is by taking decisive action against the tiny minority who let us all down by falling far short of those standards."

A couple of questions from this bizarre fraud immediately spring to mind:

1 How were the records altered without an exception report (which I assume is reviewed by senior management) highlighting the changes made, being reviewed and authorised?

2 What other records have been altered, not necessarily for racial bigotry but for personal gain?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

The Joy of Giving

Full marks to Tony Blair for spotting the tax benefits of his recent gift (it will receive tax relief) to the British Legion.

I guess that constitutes avoidance, doesn't it?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

The Teenage Tax Trap

The Observer last Sunday highlighted a rather obscure tax trap that can catch out teenagers, who rely on receiving their interest gross.

Savers of any age, who earn too little to pay income tax, qualify for interest paid gross by completing HMRC form R85.

The "nuance" to this opt out is that when the saver turns 16 the opt out ceases to be valid, and the individual must re complete another R85 in order to continue to qualify.

Needless to say, not everyone is aware of this. However, tax overpayments can of course be reclaimed from HMRC via form R40. Unfortunately, as with all tax overpayment reclaims, the Observer notes that it "is bureaucratic and slow".

Teenagers, you have been warned!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

It's Only Money!

UHY Hacker Young have revealed that HMRC managed to collect £238M too much tax from taxpayers in the tax year 2009-10, as a result of PAYE errors, an increase of 148% from the previous year.

This increase seemingly is due to errors and glitches in the new HMRC system, which was designed to make PAYE processing faster and more accurate.

The Independent quotes an HMRC spokesman:

"Over and underpayments have long been a feature of the PAYE system. But our contact centres are able to correct inaccuracies, in part because of the new system."

The new system has caused more problems, but the new system is able to correct the problems that it is causing.

So that's alright then!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Gone Fishing

HMRC have gone on another one of their regular fishing trips.

This time they have written to 600 offshore account holders, asking them a number of questions about how their accounts operate and to inform on their advisers' involvement in tax avoidance.

The underlying rationale of the letter is to find out how offshore products are being sold, and if financial advisers are taking part in tax avoidance.

For the umpteenth time, tax avoidance is perfectly legal!

Answering the letter is of course not compulsory.

Lawyers are warning that if people answer the questions, and raise points that are of "interest" to HMRC, the answers given may one day be used by HMRC against the persons who responded.

Under no circumstances answer this letter, throw it in the bin.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Happenstance

By happenstance I am meeting with an editor of a TV news programme today, to discuss HMRC.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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 Running Scared - The Smell of Fear

In a clear indication that HMRC and the government is running scared from revealing how truly badly HMRC is performing, the Cabinet Office/HMRC have cancelled publication of this year's full annual HMRC report.

This means that information about HMRC's performance is hidden from public view.

HMRC have instead published a basic financial report and accounts.

The basic report excludes, a.o.:

- Figures showing the number of prosecutions against taxpayers
- The success rate of court actions pursued by HMRC
- A breakdown of details of complaints against HMRC

Needless to say, by hiding crucial information in this manner, HMRC management and the Cabinet Office are doing their best to avoid being held to account for their failures.

This tactic won't work, one way or another the information will leak out and enter the public domain.

So folks, exactly what are they trying to hide?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Catch 22 - Trying To Contact HMRC II

It seems that my recent article about the problems a mother and her son were having trying to extract a tax overpayment from HMRC has struck a chord.

Here is a similar tale, sent to me by another loyal reader, edited to avoid identification:

"I have just read your 'Catch 22' item.

We have suffered a virtually identical scenario.

My son worked during the Summer holidays in the last tax year. However, he was not given the option by the employer to complete a form that would have meant he wouldn't have paid tax at all and, despite him providing P45 information from a previous part time casual employer from the previous tax year, he ended up on an emergency tax code and paid the full whack.

Due to the pressure of his studies when he returned to university in September he has not had any employment since.

After his January exams he started the process of trying to get the much needed money refunded.

After many attempts by him and by me to download the appropriate form unsuccessfully, we called HMRC (early March) to ask for a form to be sent.

They said that the turnaround for this route was at least 12 weeks to process and advised my son to wait until after the end of the tax year, and telephone instead as the refund could then be dealt with over the telephone.

My son duly phoned on April 7th only to be told it couldn't be done over the phone, and that he should send his P45 from the Summer Placement work with a covering letter stating he hadn't worked before or after.

We did this and paid £5 to have signed for delivery, so that we could track the letter.

Despite this, and numerous phone calls later, the first response we had was over 3 months later - and asking for information that we believe HMRC already had.

Part 1A of the P45 from the Summer Placement was returned last week, with a letter saying that the calculation has been done and is being sent under separate cover.

The last phone call we made said we should get a cheque in the next 5 to 10 working days, as my son was originally told it would be sorted by 5th May - I will believe it when I see it (5 working days have already passed).

When we asked about compensation the response was 'for what?' - the frustration and hardship caused is not anyone's fault apparently."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Overoptimistic?

HMRC's plans for revamping PAYE, aka "The Centralised Deduction Plan", which in theory would give HMRC real time information from companies about income and deductions as a platform for centralising the calculation and deduction of tax, NIC and student loan repayments, have come in for some criticism.

Aside from the deep routed scepticism about HMRC actually being able to create an IT system that could do this, tax professionals also note that the plan would move the responsibility for undertaking the calculation away from employers and place it fully with HMRC.

Accountancy Age quote David Ingall, partner at JWPCreers and member of the UK200 Group, who is more than a tad cynical about this:

"As a firm operating a payroll bureau for clients, the thought of HMRC offering the level of service required is an impossibility.

That sort of service is not associated with a government department. Additionally, the numbers of staff required to undertake this service will be enormous."

As I noted on Monday, this may be an aspiration that is a "tad overoptimistic".

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Catch 22 - Trying To Contact HMRC

My commiserations to a loyal reader who sent me a summary about her teenage son's problems in trying to recover a tax overpayment from HMRC.

Seemingly, he has spent the last 4 months trying to reclaim his overpaid tax from last year.

He has sent in P45's & P60's only to be told that they have not been received.

As he has to spend his productive time working, he has authorised his mother to act on his behalf wrt dealing with HMRC.

He sent HMRC a signed letter giving permission for his mother to deal with his claim.

Can you guess what happened next?

Yes, that's right, his mother was told that it will not be read for 7 weeks as there is a delay in the opening of mail.

The solution?

He can, in the meantime, call HMRC and tell them that he gives permission for his mother to speak on his behalf on the phone.

The trouble is that this takes rather a long time to get through, and he is at work, which is why he gave his permission in writing in the first place.

However, there was another solution offered to his mother. A decent and helpful member of HMRC suggested that she fax the form in, and he would ring back as soon as he received it.

Fair enough!

However, that was a couple of days ago.

One small problem has since been discovered by the hapless mother, who rang to chase the fax up.

Can you guess what that is?

Yes, that's right, HMRC told her that faxes go to the post room and they will not be opened until the 15th October at the earliest.

Spiffing!!

Maybe HMRC could publish an email contact list of staff to speed things up?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Panorama - Are You Paying Too Much Tax?

I have been contacted by Claire Judge, of Nine Lives Media, wrt a Panorama programme that she is doing research for. In brief, she is looking for people to contact her wrt issues/problems that they have experienced concerning HMRC.

Here is her request unedited:

"After last week’s report from the National Audit Office on HM Revenue 2009 – 2010 accounts, Nine Lives Media have been commissioned by BBC Panorama to make a programme: Are You Paying the Right Tax? The report highlighted the 18.2 million backlog of cases revealing that around half these cases are likely to involve an over or underpayment of tax and that these may lead to repayments and recoveries in the order of £3 and £1.4 billion. That’s a lot of people paying the wrong tax.

The programme will look at how and why so many incorrect tax codes were sent out in January, meet people who were affected, and try identify groups who might be in for a surprise when correct codes are finally calculated and demands for payments are sent out.

Claire, researcher at Nine Lives Media, says: “We thought one interesting approach might be to look at different sorts of common errors that have come to light following the tax code fiasco and look for examples of people who have already been affected.”

“We understand the importance of confidentiality, but if you have been affected by this, or know of anyone who might illustrate this problem we’d love to hear from you or have you pass on our interest. We would only ever broadcast details of a particular case if we had full consent of the people involved.”

If you wish to share your tax issues with Nine Lives, and potentially be involved in the programme, please call Claire on 0161 832 2007 or email claire.judge@ninelivesmedia.co.uk."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

Hanging On The Telephone - Deadline Extended

Owing to a deluge of last minute calls to HMRC, from people trying to renew their tax credits before last Saturday's 8PM deadline, HMRC's call centres were overloaded and many could not get through.

Therefore HMRC have extended the deadline by a few days, and have stated that they will look "sympathetically" on late callers, on a "case by case basis" (if claimants can show that they tried to ring on Saturday).

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"

New PAYE System

HMRC have published a consultation that proposes that every employee be given a single computerised tax account, which will combine employment and NI records. HMRC will then have real time information on all of the payments made.

HMRC want the new system to be running within the lifetime of the current government.

However, given HMRC's track record wrt IT implementation, not everyone is convinced that this will happen according to plan/timeframe.

Accountancy Age quote, Lesley Fidler, tax director at Baker Tilly:

"While it is important that there be aspirational goals for our tax system, HMRC does not have a strong record of implementing IT projects.

Anyone who was involved with the short-lived attempt at paying tax credits via the payroll will hope that this fresh initiative will be fully researched, adequately piloted and sufficiently funded before it goes live."

Given the proposed cuts in government expenditure, and HMRC's past track record wrt IT projects I am inclined to agree with Ms Fidler that this may be an aspiration that is a "tad overoptimistic".

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

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"