HMRC Tax Calculator Now Works

I see that HMRC's tax calculator is now up and running, after it's first day's embarrassing crash.

Sadly though the simple one cannot be used if eg:

1 You have income from savings, or

2 You have an occupational pension, or

3 You earn more than £100K per annum.

As HMT says:

"over half of taxpayers (57%) do not know how much income tax and National Insurance they pay in a year, suggesting that many people find the personal tax system remote and confusing."

Quite!

Take it for test drive via this link HMRC Tax Calculator.

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"

Big Brother - HMRC's New Powers

The Register has a good article written by Amberhawk Training about new powers that will be granted to HMRC, if the Local Government Finance Bill now before Parliament is passed.

The bill, in its current form, permits the routine disclosure of tax records and other personal data held by HMRC to council officers for several council tax-related purposes.

The powers also allow HMRC to disclose such details directly to contractors of the council (eg, perhaps those IT service providers based overseas or in the cloud); this could permit tax details to go to many destinations outside the European Economic Area.

The argument used by the state is that these powers enable councils to get information directly from HMRC to check claims for reduced council tax, as opposed to having to ask for the same information again from the persons seeking the council tax reduction.

All very "helpful" and "considerate" of the state, maybe. However, there is already an exemption from the non-disclosure provisions in section 29 of the Data Protection Act that covers the “assessment or collection of any tax or duty...”; ie this data can be shared already.

The new bill will increase the data share between HMRC and councils and, as indicated above, spread that data to organisations outwith councils and the UK.

There is also one other rather interesting aspect of the proposed bill:

"There is a provision that states: “Regulations under this paragraph must not be made except with the consent of the Commissioners for Her Majesty’s Revenue and Customs”. This is the first time I have seen that the exercise of Ministerial Powers is to become subject to a veto by someone who is not the minister."

Is this a good idea to grant HMRC these extra powers?

I don't think so!

The state should be afraid of the people, the people should not be afraid of the state!


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 Tax Calculator Crashes

Oh dear I see that HMRC's new internet service, allowing people to check how their income tax and national insurance is spent, crashed yesterday (its first day).

The site fell over at around midday, after 400,000 people tried to access it.

HMRC told the BBC:

"Our online calculator is extremely busy at this time but a full service is being restored.

The mobile app is unaffected." 

Seemingly the government describe this as a "Twenty-first century system".

David Gauke must be a tad peeved, as earlier in the day he was proudly boasting about the new service:

"We think it is right that people know how much tax they pay and what the government spends it on.

At the moment, over half of taxpayers do not know how much income tax and national insurance they pay in a year.

Our new tax calculator will allow them to find out, which is a big step towards a more transparent, twenty-first century system."

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's "C" Word

The e petition asking HMRC stop stop using the "C" word and return to calling taxpayers ermm taxpayers, has prompted Tax Journal to ask HMRC if they will heed the request.

In a word, no.

HMRC have no intention of abandoning the "C" word; even though taxpayers have no choice, it winds everyone up and everyone pays tax in some shape or form (eg income tax, VAT etc etc).

Here is HMRC's response in full:

"Tax Journal: Does HMRC accept that use of the term ‘customer’ is not appropriate?

HMRC: Language is important. We use the term ‘customer’ to underpin our thinking about how we should relate to the millions of people we serve. The word ‘customer’ invites a different provider orientation, with its implication of choice. We know that it is this that irritates our critics but it is exactly this point that needs to be thought about when defining how we connect with people. 

We must ask ourselves: ‘If this person had a choice would they come back to us?’ If the answer is ‘no’ then we need to address that. We do not want to be the kind of organization that takes people for granted because we can. We think it is inevitable that when you think of someone who comes to you through choice and has to be encouraged back through the quality of service they experience even when this is not literally the case this will feed through into the quality of service you provide. 

A customer has to be treated exceptionally well and that is what we aspire to. We want to think of the millions of people we serve as deserving of the same consideration and attention that those who use commercial services receive. So no the use of ‘customer’ is not inappropriate.

Tax Journal: Does HMRC intend to continue to use the term?

HMRC: We do.

Tax Journal: Are there any plans to stop using the term, and if so when will the change take place and what terms will be used instead?

HMRC: We think using the term ‘customer’ underlines the fact that the people we serve are entitled to be treated as though they could receive the services they get from us elsewhere. It is right that we have the mind-set of an organization faced with tough competition for the people we deliver our services to.

Tax Journal: Do you have any comment on Mike Truman’s article or the campaign?

HMRC: We always welcome robust debate. The views that Mike’s campaign will generate (and we think there will be many) will contribute to an interesting and important conversation – one to which we are likely to contribute. We know that not everyone likes our use of the term ‘customer’ and we will certainly listen to the views of our critics but we believe the term plays an important part in helping us to take forward our strategy of putting people at the heart of everything we do."

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"

I Am Not A Customer, I Am A Taxpayer

As loyal readers are well aware, nothing irks HMRC staff and non HMRC alike more than the use of the word "customer" to describe the taxpayer.

Customers have a choice about where they buy their goods and services, taxpayers do not!

It is therefore refreshing to see a well reasoned critique that nails the lies behind the official HMRC propaganda, that would have us believe that the "C" word is being used for all the "right" reasons. Mike Truman writes on Taxation:

"That they haven’t already done so, and persist in calling us customers, suggests that something else is behind the use of the term.

While it is only recently that HMRC have explicitly defended it on the basis that it encourages officers to think of ‘customer service’, the use of such management-speak has been rampant for some time in the department’s strategy documents.

Taxpayers are split into ‘customer streams’, the levels of ‘customer service’ are analysed and reported on, and software developers look at ‘customer journeys’ through HMRC’s online services... I’m sorry, their ‘online offering’...

The justification for this was that it was a much-needed change in approach for HMRC staff, and would result in a significantly better level of service for taxpayers and claimants.

It clearly hasn’t, though that may be due in large part to the fact that the department is trying to make do with far fewer staff. However, there is also a fundamental flaw in the concept.

HMRC seem to have bought the line from business that what they want to do is provide great service to their customers.

Actually what business wants to do is to make profit from its customers. That involves giving the customers who pay the most the best levels of service, while trying to automate the process for lower-value customers, thus stripping out costs.

It is no surprise that in a ‘customer-centric’ HMRC, the one area getting rave reviews is the Large Business Service, with the High Net Worth Unit beginning to garner grudging praise as well.
Nor is it any surprise that the average taxpayers (and their advisers) get a process-driven level of service from call centres – they simply are not worth putting more resources into because they don’t produce as much revenue.

What businesses also want to do is to maximise the amount of money they get from each customer. Is this why HMRC started talking a while ago about getting the ‘maximum’ amount of tax, rather than the ‘right’ amount of tax?

Because, for all that Andrew Tyrie MP cleverly finessed the issue at the CTA address by saying that the right amount of tax was the maximum amount of tax, the two concepts are fundamentally different."

He goes on to recommend that people sign up to a petition on the government epetition site that calls for the "C" word to be abolished wrt HMRC:

"HM Revenue & Customs has the policy of calling Tax Payers Customers. If tax payers were in fact Customers they could shop elsewhere when they receive a poor level of Service from HMRC."

Sign the petition here:

To stop HM Revenue & Customs calling Taxpayers Customers

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 Gets Its Sums Wrong

HMRC has admitted that it has made a number of mathematical errors in its official guidance on pension tax legislation, after Aries Pension & Insurance Systems pointed it out.

Unfortunately it cannot immediately correct the mistakes.

HMRC’s registered pension schemes manual, which was published in March, contains at least three errors in relation to how much someone can expect to take in tax-free benefits when they are invested in more than one scheme:

• The guidance gives an example of an investor who can claim £37,500 from one scheme and £60,500 from another, giving a total figure of £92,500 instead of the correct figure of £98,000.

• The second error made in the guidance says 25% of a pension pot of £120,000 would allow a pensioner to receive a maximum lump sum of £27,500, instead of the correct figure of £30,000.

• The guidance also suggests that adding together pre- and post-A-Day lump sums of £30,000 and £27,500 would give a saver a total of £60,500, rather than the correct figure of £57,500.

 Aries director Gary Chamberlin is quoted by StockMarketWire:

“It’s a bit of a shambles, isn’t it?

This is the government department responsible for collecting the nation’s taxes, and it would seem it hasn’t yet got its GCSE in arithmetic. 

It does rather dent my confidence in HMRC."

An HMRC spokesman is quoted by MoneyMarketing:

 “We are sorry about this, the guidance will be updated as soon as possible.”

HMRC would not confirm when the next review is due to take place.

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"

RTI On Track?

HMRC recently announced the addition of a further 310 employer schemes to its Real Time Information (RTI) pilot, launched last month.

Allegedly, RTI will make it easier for employers, pension providers and HMRC to administer the pay-as-you-earn (PAYE) system. Under the new arrangements, employers and pension providers will tell HMRC about PAYE payments at the time they are made, as opposed to only at the end of the year as at present.

HMRC claims that it has so far successfully received over 100,000 employee records from 10 volunteer employers. The additional 310 employers are set to join the pilot between May 8 and the end of June.

Stephen Banyard, Acting Director General for Personal Tax at HMRC, is quoted by Tax-News:

“It’s early days, but all the signs are good. RTI is on track - all expected PAYE submissions have been received from the 10 pilot employers and processed. 

The whole point of the pilot is to identify any implementation issues. So far, these have been very few and they have been quickly resolved.

We are working closely with the employers in the pilot who have helped us identify and solve any issues. We have improved our guidance and support for employers and software vendors as a result of the insight and feedback gained. 

We are very grateful for the valuable contribution the pilot employers and software developers have made." 

That's great so far, apparently!

However, according to a comment on FreeAgent.com, HMRC appear to be a tad selective with whom to pilot RTI:

"I spoke to HMRC about testing RTI in pilot phase for biz with 0-9 employees. 

They were only interested in piloting with those who had substantial payroll & existing systems. 

Interesting, no?"

It looks like the interests and input of/from micro businesses are being ignored.

Comments and opinions are, as ever, very welcome.

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 Exodus II

Yesterday I wrote about the exodus of senior tax officials from HMRC, leaving the organisation short of senior people with experience and tax knowledge.

Quite rightly a loyal reader pointed out that the exodus is not just occurring in the rarefied upper echelons of HMRC, but also in other ranks as well:

"Rats and ship are the two words which spring to mind. 

There are more and more leaving, everyone is fed up with pacesetter, stats which are nothing short of a figure fudging exercise, promotion for anyone who can talk bollocks at 'shiteboard meetings' and managers who can't answer a tax query. 

I got my 8th new manager in a year today. 

Another pacesetter practitioner! 

There are not too many of us around who have a taxes background, the place is a shambles. 

But we all know why, the government are making it so crap so they can sell it off bit by bit cheaply to their mates." 

It is clear that "form over substance" is the mantra being applied in HMRC, where knowledge and experience of tax is subordinated to management claptrap dogma and box ticking.

I am not yet convinced that the government plan is to privatise HMRC, I think that would be politically impossible. However, I am of the view that a catastrophic failure of RTI et al will give the government the impetus/excuse to untangle HMRC and probably reverse the merger that caused many of the problems in the first place.
 
I may of course be proven wrong by events.

As ever I welcome views, opinions and comments.

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 Exodus

Accountancylive reports that HMRC is facing a skills shortage, something loyal readers have  repeatedly warned about on this site.

It seems that HMRC is facing an exodus of senior tax specialists, an exodus that is gathering pace at an "alarming rate":

"as 80% of the organisation’s top team are set to flee the departmental nest this summer."

I wonder if the word "nest" is really the best description of HMRC?

Anyhoo, the article goes on to list some familiar names who are leaving (no surprises to loyal readers of this site):

• Steve Lamey, director-general for benefits and credit, is taking up a new role in the private sector while three of the five commissioners are retiring.

•  HMRC is looking for a replacement for Mike Clasper.

•  Lin Homer has only been in post for less than six months

•  Director of customer and strategy, Naomi Ferguson, is to head up New Zealand’s tax authority in July.

As the article points out, the irony is that Dave Hartnett was the only commissioner in HMRC with ‘deep tax knowledge’. However, HMRC are looking to plug the gaps.

An HMRC spokesperson said:

"The most important aspect of this recruitment process is getting the right people for the right roles.

Applications will be welcome from both internal and external candidates in a fair and open competition. 

Replacements will need to have a range of experience for such senior roles; tax will be one of the key elements."

Glad to see that tax is a "key element" in the recruitment process!

Anyhoo, I dare say that Hartnett could be persuaded to come back as a consultant if the fees were right?

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"

Communicating With HMRC - Things Don't Always Get Better!

My thanks to a loyal reader who dropped me this note the other day, in which he vented his spleen about the difficulties of communicating with HMRC:

"2012 client tax return submitted on 1st May with a claim for repayment of just over £10,000. 

Client asked when he might get this. 

Today 15 May I called the agents' dedicated line, as the HMRC website shows the refund as due and invites me to claim it! 

The officer I spoke to said, 'oh it's not letting me claim it either'. 

I said 'it's already been claimed on the tax return'. 

She is now emailing the 'back' office and asking them why the refund has not been made. They are going to ring me. 

I asked what the call-back time is. 

'Up to three weeks'. 

I expected 3-5 working days but sheeesh!!! 

NOTHING is getting better."

Contrary to the song, things don't always get better!

I would be interested to hear if a three week call back time the norm now?

Have other people had to wait longer?

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"

NAO Moveable Deadlines II

A week ago I wrote the following about the National Audit Office (NAO) report into "HMRC's Sweetheart Deals":

"My thanks therefore to a loyal reader who has pointed out the reason for the absence of the NAO report, it appears that the deadline has been quietly shifted back (without any announcement) to at least Summer this year.

"The C&AG aims to report the results of this work to the Public Accounts Committee in summer 2012."

By the way "aims to report" is not a very firm "deadline!

Is this "slippage" because the investigation is taking so long, or is it because they don't want the report issued before Hartnett officially leaves in summer?

Oh and by the way, they are only looking at five deals, not 10 originally discussed in 2011; so it's probably not the workload that has caused this "slippage".

I will ask NAO why they have delayed this, and will post their answer if I get one ."

I emailed the NAO, and received this response from the Head of Media:

"There was no deadline for this report. The information on our website on approximate timing, for guidance only, was posted at the beginning of our study when we could not know exactly how long it would take. Such guidance is commonly changed as studies progress. The date on which a report is to be published is decided by the Comptroller and Auditor General and for this report has yet to be announced."

I responded thusly:

"Thanks ****

Steve Barclay (a member of PAC) was under the impression that is was Spring as well (as per his website http://stevebarclay.net/?p=2260)

For clarity, now that your site says "Summer" this is not the deadline either?

http://www.nao.org.uk/publications/work_in_progress/larger_tax_settlements.aspx

As an ex auditor myself (KPMG, Philips, De Beers) I am rather surprised that you have yet to decide a deadline.

Thanks

Kind regards

Ken Frost"

He then called me, and advised that the report will probably be issued at the beginning of June and that PAC are aware of this.

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"

Message For Bill

Bill, the email address you gave me is wrong.

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"

Operation Elveden - HMRC Employee Arrested

The Press Association reports that an HMRC employee was arrested yesterday in a dawn swoop by detectives investigating corrupt payments to public officials.

The 50-year-old man was held on suspicion of misconduct in a public office by officers from Operation Elveden.

Scotland Yard said a 43-year-old woman was also arrested at the address in north west London.

She was held on suspicion of aiding and abetting misconduct in a public office and money-laundering offences.

The pair were arrested at their home at 6am and are being questioned at a central London police station.

Police said the operation was sparked by information supplied by News Corporation's management standards committee (MSC), which was set up in the wake of the phone-hacking scandal that led to the closure of the News of the World last July.

Scotland Yard said in a statement:

"Today's arrests are the result of information provided to police by News Corporation's management standards committee.

They relate to suspected payments to a public official and are not about seeking journalists to reveal confidential sources in relation to information that has been obtained legitimately."

An HMRC spokesperson said:

‘We can confirm a 50-year-old HMRC employee was arrested yesterday by Metropolitan Police Service officers in connection with Operation Elveden. For legal reasons we cannot comment further at this time.’

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"

Child Benefit Changes - The Oncoming Clusterfuck

The ICAEW Tax Faculty has vented its spleen about the government's proposals in the recent Budget for a tax charge on high earners in receipt of child benefit.

"Child Benefit will be withdrawn when someone in a household has an income of more than £50,000. The benefit will be withdrawn gradually; 1 per cent of Child Benefit for every extra £100 earned over £50,000. Only those with an income of more than £60,000 will lose all their Child Benefit."

In a nutshell that ICAEW doesn't think it will work, in fact the ICAEW is so unimpressed with the plans that it says:

"We think the proposals are in danger of becoming a practical disaster when they become law in the next couple of months."

In summary, here are the ICAEW's concerns:

• HMRC will be using the tax system to claw back from one individual a benefit paid to another. The tax system is based on individuals, while the benefits system is based on households. This undermines the principle of individual taxation.


• Families in similar financial situations could be treated quite differently, undermining the policy’s ‘fairness’ objective, and creating very high marginal rates of tax for some.


• Changed family circumstances could make it difficult or impossible to calculate the claw-back, or who should pay it. In the period between the benefit being paid and then clawed back, the couple could be separated, involved in an acrimonious divorce, or completely out of touch with each other.


• Taxpayers could be penalised for failing to submit information they have no access to, particularly if the relationship breaks down.


• Taxpayers could find their confidentiality breached, as HMRC may need to share information about one partner’s (or former partner’s) income and tax affairs with the other.


• The deadline to notify HMRC that you’re liable for the charge is 5 October, nearly one month before the self-assessment deadline for submitting a paper tax return and four months before the online deadline of 31 January. If one or both partners is taxed under self assessment, they probably won’t know their adjusted net income in time to meet the October deadline.


• Collecting the charge through PAYE coding adjustment could lead to delays of up to 3 years and undermine the PAYE system’s efficiency. Any coding adjustment is an estimate, so HMRC would have to repeatedly re-estimate the code.


• It could create 500,000 more self-assessed taxpayers, because taxpayers will have to assess their own liability for the new charge – very expensive for HMRC to administer.


• The extra admin burden could make it even harder for HMRC to improve service standards. HMRC’s processing and service standards are already poor, as identified by the Treasury committee last year. This charge may cause standards to fall further.


• PAYE coding errors could leave tax payers with bills for thousands of pounds, because those who don’t have the charge coded out will have to pay the bill directly the following year.


• It could breach the UK’s EC Treaty obligations; Couples with one partner who is an EEA migrant worker could be treated differently under EU rules, which renders the UK rule invalid because it is discriminatory.


• The resulting poor confidence in the tax system could hit tax compliance. Taxpayers could find their tax confidentiality breached and experience lower service standards while grappling with an even more complicated system. Their confidence in HMRC and the tax system will be undermined and there will be behaviour changes and planning to avoid the charge.

It is disappointing that Osborne is going ahead with this oncoming clusterfuck (the ICAEW is far too polite to use such a word), all the more so because (when plans for this were mooted in 2010) I warned about it in 2010:

"This absurd "Heath Robinson" claw back will increase the complexity of individuals' tax affairs, and add to the burden on the already overstretched HMRC."

What a shame that George doesn't read this site!

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"

Standing Up To HMRC

Andrew Thomas, the outgoing President of the Chartered Institute of Taxation (CIOT), is going to make some choice comments about tax and HMRC today.

He will make the remarks in his valedictory speech at the CIOT’s annual general meeting in Westminster at 4pm today, before he steps down to be succeeded by Patrick Stevens.

"Outgoing President of the Chartered Institute of Taxation (CIOT), Anthony Thomas, will today say:

• Cost –shifting from tax authorities to taxpayers amounts to a ‘stealth tax’
• It is important for the tax profession to continue to challenge HMRC
• HMRC must be properly resourced to safeguard the UK ‘moneybox’

Anthony Thomas will say:
On Restoring Trust
“The theme for my year as President has been "Restoring Trust"; that is trust between HMRC, the professions, notably our Institute, and taxpayers... It is absolutely essential that HMRC be perceived as fair and even-handed.” 

Anthony Thomas will say that progress has been made and the need for trust now features regularly in conversations – but that there is still a long way to go. 

On Tax Avoidance
“Deliberate obfuscation of the important distinction between avoidance and evasion undermine[s] trust.”
Anthony Thomas will reiterate the CIOT stance that HMRC needs to get a better balance between tackling avoidance and tackling evasion – which again has seen progress during the year.

On Cost Shifting
“[T]here is little point in HMRC achieving cost savings if this involves greater costs, in aggregate, for taxpayers... cost shifting... is effectively another "stealth tax". There is a distinct possibility that this will be the result of the Real Time Information system currently being piloted, particularly for smaller businesses and tax practices around the country.”

On Standing Up To HMRC
“[I]t is important to continue to challenge HMRC... Doing the right thing will include continuing to be upfront about HMRC's failings and not gloss over them in the hope of an easier relationship...

“Continue to voice concern at the highest level that only a properly funded and resourced HMRC is capable of safeguarding the UK "moneybox" in a way which allows them time to treat citizens with respect. The Revenue department must never be put at risk and the current culture of fiscal compliance can only be retained by properly trained staff which includes being properly funded.

“We must continue to be outspoken and critical when attempts by the profession to impress upon HMRC the value of slowing down the implementation of their proposals in order to give proper consideration to their impact are simply ignored or result in HMRC speeding things up.”

Well said!

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's P35 Reminders - The Curate's Egg

AccountingWeb have posted a short article from a tax professional bemoaning the out of date P35 reminders sent to him by HMRC:

"This morning I received 7 reminders for various clients to file P35's before the 19 May deadline. I suppose I should be grateful that I get these reminders but they were dated 29 April and in all but one case I had already filed the reports. The exception is a client that HMRC was informed 2 years ago had stopped trading and wouldn't be operating a payroll.

Calls from clients and discussions with colleagues make it evident that this was a mass mailing and that because it was mailed (!) nearly 2 weeks ago the majority of recipients will have already filed.

I am appalled at the sheer waste of paper and postage and believe that with the present economic conditions, this waste is unacceptable and the result of incompetence.

I wrote a few weeks ago about the need for HMRC to make more use of email and this proves the point as these notices are not, and do not need to be secure. 

How much could have been saved?"

The mass mailing of reminders by HMRC is probably the most effective and speedy method for HMRC to use, rather than to mail only those who have not yet filed their P35's.

However, the postal system used by HMRC is clearly causing a delay (the Royal Mail does not normally take 2 weeks to deliver letters).

Maybe HMRC really should seriously consider using email to interact with taxpayers (as, eg, the Irish tax authority does)?

I would be interested to read some suggestions as to how this could be improved, from both HMRC staff and taxpayers.

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's Postal Chaos

Loyal readers will recall that in April I wrote the following:

"I was a tad gobsmacked when I heard Danielle Stewart (partner in Baker Tilly) singing HMRC's praises (re their handling of post) in this video discussion about the recent Budget.

Run the video forward to 17:30 and you will hear her say the following about HMRC's postal delays:

"so much better over recent years......their standard of response nowadays is so fast you can't believe it compared to what it used to be. 

You could wait months for a reply.

Now you'll be surprised if you wait a week."

I can only conclude that she must have some special postal arrangement with HMRC."

My thanks to a loyal reader who commented thusly the other day:

"I have spent a total of 143 minutes on the phone to the tax office over a period of our days. 

 I finally got through today and made a formal complaint as I was greeted by a man whose response was "oh yeah we're busy at the minute". I was then put on hold again to speak to a manager and told the same she said she would make a formal complaint for me but warned me the current turnaround for complaints is 45 days!!! 

When she dealt with my query for a tax refund she told me where to send my stuff to but also warned they are currently 6 weeks behind with the post WTF and advised I probably wouldn't hear anything for apprx eight weeks!!!! 

I made the comment that if I didn't respond to people in my job for this length of time I would get the sack and she responded "oh it's a government problem we can't do anything about it".

I asked if I had pressed the number to speak to someone about paying them tax they would have answered quick enough and she couldn't make a comment but did say with a little giggle that there is a separate number to call if you want to make them a payment - YES I bet there is and I bet it is answered within seconds. 

This is absolutely appalling and there is no wonder this country is in so much shit the Government can't even get this right!!"

Anyone from Baker Tilly care to comment?

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"

NAO Moveable Deadlines

In December 2011 I wrote:

"Sir Andrew Park, a former High Court judge, will investigate HMRC agreements made with a number of companies including Vodafone and Goldman Sachs (the vampire squid).

The National Audit Office (NAO) has been asked by MPs to carry out an investigation beyond its usual remit to examine up to 10 specific deals approved by HMRC, Sir Andrew will lead the investigation.

The PAC report will heavily criticise David "Jack" Hartnett.

How very "civil service" that his departure from HMRC was announced/arranged prior to the publication of the report! "

The deadline for the report was, according to Steve Barclay MP (and member of PAC), Spring 2012.

Well here we are enduring a rather wet, windy and drought ridden British "Spring"; yet still no sign of the report.

How very odd, and also how very odd that there are no minutes of HMRC board meetings this year!

My thanks therefore to a loyal reader who has pointed out the reason for the absence of the NAO report, it appears that the deadline has been quietly shifted back (without any announcement) to at least Summer this year.

"The C&AG aims to report the results of this work to the Public Accounts Committee in summer 2012."

By the way "aims to report" is not a very firm "deadline!

Is this "slippage" because the investigation is taking so long, or is it because they don't want the report issued before Hartnett officially leaves in summer?

Oh and by the way, they are only looking at five deals, not 10 originally discussed in 2011; so it's probably not the workload that has caused this "slippage".

I will ask NAO why they have delayed this, and will post their answer if I get one.

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's Secret Board Meetings

I was having a nose around the HMRC site yesterday, and cast my eye over the HMRC Board Committee Summary Minutes page.

Can you spot what is wrong here children?

Yes, that's right, there have been no minutes posted since November 2011!

Does this mean that there have been no executive board meetings, or does this mean that the minutes simply haven't been posted?

Does anyone have the answer, if so, please share with the rest of us?

Thanks.

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 Question of Coding

Oh dear it seems that, despite the fact that Pacesetter is meant to solve all of HMRC's problems, HMRC is still having problems with PAYE codes.

In fact, according to UHY Hacker Young, the problems are so widespread that one in four taxpayers may be presented with the wrong tax bill with pensioners and higher-rate taxpayers most at risk (seemingly two thirds of pensioners on the wrong tax code overpaid their tax).

However, it's not all bad news:

1 RTI, which is guaranteed to be up and running on time, will solve all of this, and

2 HMRC don't recognise the figures used by UHY

A spokesman for HMRC is quoted in the Telegraph:

“We don’t recognise any of the numbers cited. 

 Accuracy of PAYE coding notices on the basis of information we hold is 98 per cent. 

Most people are paying the right tax. 

If any agent has information about their clients’ changed circumstances they should let us know.” 

Please feel free to comment if you have been incorrectly coded. In the event the list is long enough I will send it to UHY and 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 Debt Collection

Dear all,

Please will those of you who have had dealings/interactions with HMRC debt collection agencies drop me a private email (the contact form is on the menu tab above).

Thanks.

Ken

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 Call Centre Chaos - Some Friendly Advice

My thanks to a loyal, reader who has proffered some friendly advice to taxpayers who are stuck in a call centre phone queue waiting to try to get through to someone.

Hang up and go round to your local enquiry centre!

For why?

HMRC will do nothing about improving call handling times because they know that when the Universal Benefit comes into force many taxpayers will be calling DWP instead, thereby reducing the number of calls to HMRC and improving the KPI's used to monitor HMRC call handling performance.

Therefore I am advised that the least worst option is for taxpayers to go to an enquiry centre, where the phones are free, and basically jump the queues.

No, I don't understand either how calling from an enquiry centre will get you through quicker than calling from your own phone; but that nonetheless is the advice given by my loyal reader.

UPDATE

I am advised that the phones used at enquiry centres have speed dials which jump the queues of people using the normal number, as the programmed speed dial number is not the same as the ones used by taxpayers when ringing from home.

It is believed that this queue jump facility is to minimise the length of time people physically spend in enquiry centres and thus reducing the risk of them "kicking off".

In an aside, I understand that taxpayers who come to an enquiry centre to actually see someone (as opposed to speak to someone on the phone) are still forced onto the phone first at the enquiry centre by a "floorwalker", in order to see if the query can be resolved by phone, thus minimising the number of people who have to make an appointment to actually to see someone at the enquiry centre.

So all you have to do is find a conveniently located enquiry centre, before those that remain are closed down!

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 - The Chaos Continues

Trying to get through to HMRC on the phone seems to be the story that just keeps giving!

Despite David Gauke's attempts to assure everyone that everything is fine:

"HMRC does not have a target time for answering telephone calls.

HMRC uses a variety of measures to assess the accessibility of telephone services, which include the percentage of call attempts handled by its contact centres.

In 2011/12, HMRC has significantly improved the number of call attempts handled to 74% (compared to the 48% in the previous year)."

Everything is clearly farking well not fine!

The ICAEW Tax Faculty is continuing to receive reports from members about the inordinate length of time that it takes to get through to HMRC on the phone eg:

"Abi on 01 May 2012, 19:07
08453000627 - nearly 1 hour so far and still no answer to find out why they have taken an additional £700 tax this month leaving me in a financial mess.

Gabe on 02 May 2012, 16:47 
08453000627 no one answers this damn phone, why are these people getting paid.. to play around with our taxes.. this is just not right.. I'm about to spend 50 pounds more on my phone bill for these idiots.. and yet still don`t know why they put me on stupid tax code.."

Let's start a list here, if you have phoned HMRC and had trouble getting through please post the number you rang, the office you were trying to contact and the length of time it took you to get through/not get through.

Thanks.

I will forward the list to both the ICAEW and 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"

Hanging on the Telephone - Chaos and Incompetence

As loyal readers know, despite the "best efforts" of Pacesetter, it can sometimes be a "tad problematic" getting through to HMRC on the phone.

Well now it seems that HMRC's political masters are finally getting that point as well. Shadow Treasury minister Owen Smith obtained figures on HMRC call waiting times (by tabling parliamentary questions), which he said showed "chaos and incompetence" in the system.

Although HMRC's helpline is automatically answered within a few rings, callers are then given a range of options and often spend a considerable time on hold. The waiting time now is so long that one in four people apparently hangs up before being connected to an adviser.

The figures show that taxpayers now have to wait an average of more than four minutes to speak to human being in HMRC, compared to one minute and 31 seconds in 2010. In the run up to the end of the tax filing deadline in January, the average wait increases to more than five minutes.

MPs are now getting jittery about this well known failure, because taxpayers (ie the voters) are contacting them about the problem.

The Telegraph quotes Owen Smith: 

"With average call waiting times almost trebling in the last two years, this is yet more evidence of chaos and incompetence in government.

Families with children are facing massive cuts to tax credits and are set to lose an average of £511 a year as a result of the unfair policies of this out of touch Tory-led Government. So it's outrageous that they are waiting longer and often struggling to get through for much needed information and advice.

These costly delays are also unacceptable for families, pensioners and businesses trying to give HMRC information to ensure they are paying the right amount of tax or getting the correct level of tax credits. With the economy now back in recession because of David Cameron and George Osborne's economic mistakes and complicated changes to child benefit just a few months away, ministers urgently need to get a grip."

An HMRC spokeswoman said:

"During busy periods, there will be times when customers find it more difficult to get through.

We are working hard to improve contact centre service levels and have made good progress. We are managing busy periods better by deploying extra people to deal with short-term increases in demand."

The Exchequer secretary, David Gauke (who features on this site regularly) tried to claim that everything was fine:

"HMRC does not have a target time for answering telephone calls.

HMRC uses a variety of measures to assess the accessibility of telephone services, which include the percentage of call attempts handled by its contact centres.

In 2011/12, HMRC has significantly improved the number of call attempts handled to 74% (compared to the 48% in the previous year)."

The "good news" is that by 2014 everything really will be fine, according to a written Parliamentary answer from Gauke:

"HMRC recognises there are further improvements to be made and aim to achieve 90% of call attempts handled by 2014/15."

Snort!

Maybe "Auto-Wrap-Up" (if it existed) would be a good idea then?;)

Folks the only way to push for an improvement is to ensure that your MPs know exactly what is going on and going wrong; keep the pressure up on them, otherwise nothing will get done!

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"