HMRC Is Shite

HMRC Is Shite
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.

Thursday, 27 January 2011

The Joys of IT

My thanks to a loyal reader who has pointed me to the plans by HMRC to implement a "real time" PAYE system which, "theoretically", will ensure that when/if the Department of Work and Pensions (DWP) introduce a Universal Credit system the DWP will have up-to-date information on everyone's income.

So far so good.

In order to aid HMRC introduce the system we, the taxpayers, have given HMRC £100M.


I am sure that Ex Com and the relevant IT managers are fully capable of not wasting this money, and of introducing a system that will not go over budget and will work as expected.

Anyhoo, HMRC have issued a Consultation Document, responses to which have to be lodged by 28th February 2011.

One of the core changes which HMRC propose to make is to utilise the BACS system for reporting PAYE information. Currently payrolls can use either the internet or Electronic Data Transfer. These electronic channels were imposed on employers when HMRC introduced compulsory electronic filing of PAYE data.

However, HMRC now state that the change to BACS is necessary because:

"EDI does not link the payment instructions and information about deductions which is fundamental to the RTI (real time information) concept."

The BACS system (run by Vocalink) handles practically every financial transaction, debit card, credit card and inter bank funding transfer in the UK.

Now what does that tell you?

Think about it....

Yes, that's right, it has saturated the UK market and probably has little growth potential in the UK unless it finds a new market.

Vocalink is the main provider of payment services to the UK public sector. They handle 98% of state benefits and 95% of all salaries.

Thankfully for BACS, HMRC stepped in when they did!


By the way, in addition to providing BACS with a new market and imposing costs on many companies by making them change to BACS, HMRC are also demanding details of employees bank accounts.

Why does it need this information?

Government snooping!

Quite unnecessary, unless HMRC has a legitimate reason to believe that fraud has occurred.

To summarise:

- HMRC intend to force payroll operators to switch their electronic communications capability to the BACS system, regardless of cost.

- HMRC intend to force every commercial payroll software developer to change the way in which his or her software operates, in order to comply with this chang.

- HMRC do not appear to have any procedure in place to compensate either payroll departments or payroll software providers for this change. Everyone just has to do it.

- HMRC have been given £100M of our money to pay for any changes to their computer systems.

- HMRC will, if this change goes ahead, have access to the bank account details of every employee in the UK. This is not in any way relevant to the correct calculation of Income Tax.

- BACS will gain a huge new market. It would also be interesting to know the terms of the contract with HMRC, wrt fees for data volume etc.

Tax does have to be taxing.

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  1. I agree with Ken that this real time system shouldn't be brought in. But I didn't complain about the current PAYE system where everything is checked at the end of the year or make a blog post yesterday about unmatched NI records.

  2. Where in the above did I say a real time system, or indeed improvements to current systems, shouldn't be brought in/made?

  3. HMRC having details of every taxpayers bank account. Methinks with HMRCs record of losing data this could potentially be the biggest cock-up in the history of the world just waiting to happen.
    I would not trust this bunch of jobs-worth bumkins with my shoe size!

  4. Agree with 14:54

    They shouldnt be allowed to have anybodys details the record they have.
    Private companies would have been shut down years ago if they made the cock ups those clowns have made.

  5. A few points:

    1-This is not the moronic scheme of HMRC calculating everybody's tax that has been mooted previously by IQ-lite revenue senior staff. To attempt such a scheme would be a disaster and 100x 100 million would not even scratch the surface of what that would cost.Reading the "consultation" crap it seems the morons want to make this real time a step towards the ultimate ambition of HMRC paying you instead of your employer but only if real time works. It won't.Why?.See below.
    2-Putting even more cost on employers so that HM can know what people have earned every week
    3-Employers will have to send up to 102 items of info to HMRC every time they do a payroll. HMRC's nitwit squad will be hoping the computers can deal with it all automatically. Wanna bet?.The Rev are losing thousands of staff--so if you are on a "wrong" code the computer will issue a "right" code automatically--unless it's got you mixed up with someone else or the Rev have got your code wrong etc,etc, ad nauseaum. The chance for errors is magnified to a huge degree and there will be far too few staff to put it right when you complain.The Document hopes this scheme will reduce even more the need for public contact with HMRC. Bollocks. HMRC have made so many mistakes that the public have had MORE need to contact them over the past 5 years. In those 5 years HMRC have acted to REDUCE the publics ability to get help from their tax office. A hundred towns now only have a small rump of "enquiry centres" left and every thing possible has been done to force the public to ring call centres instead of getting proper face to face help as in the system that worked well enough in decades gone by.Massively expanding incoming info while leaving too few to do anything with it =more disaster.
    4-100 million is way too small to make even this half-baked plan work. HMRC's IT suppliers are piss poor and greedy. Either this will be abandoned or lots more of your cash will have to be put into it

    Also, Ken, I have had a cursory look of their "consultation" crap but I didn't see anything about them demanding details of people's bank accounts. They don't need that info for the real-time crap and I think a few well-placed lawsuits could stop any such demands in their tracks.

  6. "Where in the above did I say a real time system shouldn't be brought in?"

    Perhaps comments like this -
    "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" combined with months worth of posts criticising the idea led people to believe you were opposed to it. So you are in favour of it? And how would you do it?

  7. It's not quite the same but HMRC has access to all your bank account details anyway via a compliance system called the Datamart so it's nothing new.

  8. Having access to bank details is one thing but if HMRC are actually storing the information on their systems I would be very concerned.