Homer Calls For Unity

I see on the civil service website that Lin Homer recently wrote a joint article article calling for unity within the civil service.

I wonder if this is a straw in the wind, and that she is preparing for a larger role outwith HMRC?

Anyone care to speculate?

Here is the aricle in full:

“The public establishments of this country … are regulated upon the principle of merely departmental promotion … The effect naturally is, to cramp the energies of the whole body, to encourage the growth of narrow views.”

These words were written by Stafford H. Northcote and C. E. Trevelyan in 1853 in their report on the organisation of the Civil Service. Since then the Civil Service has gone through many changes of structure, size and outlook, but our need to break down boundaries between departments remains.
Key to this is the Civil Service Reform Plan, which we very much hope you’ve all read and discussed in your teams. We both believe the Civil Service Reform Plan can and should be implemented. As part of this work, Lin is leading on creating a unified civil service, and this message will begin to set out what this means to us.

The first thing to say, is that a unified civil service isn’t just about sharing services – although we can and will share where we have the potential to make enormous efficiencies and savings, such as with payroll and HR. What we want to achieve is more fundamental.

The Civil Service has gradually evolved into a system where departments and agencies have a good deal of independence to deliver their priorities, rather than being firmly controlled by the centre. This has advantages and disadvantages. On one hand, departments are free to decide which areas they focus on and can act accordingly, quickly and efficiently.

On the other, it’s becoming increasingly clear that there are many challenges, and policy changes, that don’t fit neatly into departmental portfolios – that depend on interdependency to be successful. This is why we need to be better at working across our boundaries, to tackle issues such as youth unemployment and encouraging economic growth collectively. There are already some great examples of what we can achieve together – such as the recently launched GOV.UK website, which makes it quicker and easier for members of the public to access government services and information. We’ve also had great success with the Red Tape Challenge, where departments have collaborated closely to remove unnecessary regulations.

What we want to do, and what we want to encourage you all to do, is search for the best examples of working practises across Whitehall and make them standard – covering everything from policy to IT, from legal services to HR. It’s not about shifting back towards a structure where everything is controlled by the centre – it’s about using our many successes and positive examples to help each other. We want you to be proud, not just of working for your department, but also the Civil Service as a whole, and know that it excels at dealing with some of the most challenging issues this country has ever faced. This can be achieved, but only if we’re unified – if we all work together."

 Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

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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

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HMRC On Speed

I was more than a little gemused to read yesterday on the BBC site that HMRC want to be placed on a revised list of emergency services allowed to break the legal speed limit.

This request is of course not for the run of the mill tax avoidance/evasion work, but for HMRC's work involving covert surveillance of organised crime.

Ministers said it was right to revise the rules for those whose work "can mean the difference between life and death".

The consultation closes on 27 February 2013.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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"

Jackpot! - Machine Games Duty

HMRC has provided the ICAEW Tax Faculty with a wee note about Machine Games Duty (MGD),  which replaces VAT from 1 February 2013.

Here is the article in full:

"Machine Games Duty (MGD) is a new tax which is being introduced on 1 February 2013. It will replace VAT currently charged on the income from gaming machines and Amusement Machine Licence Duty (AMLD).

MGD will need to be paid on the profits from most machine games. A machine game is a game played on a machine for a maximum cash prize greater than the cost to play. This means that a gaming machine or a skills with prizes machine (SWP) may be a machine subject to MGD.

Someone responsible for premises where machine games are played on which MGD will be due must register for the duty with HMRC. In many cases the person responsible for premises will be the person who holds the licence or permit which allows machines to be provided for play on the premises. In certain circumstances more than one person may be responsible for particular premises - in these circumstances only one person needs to register.

What is happening and when?

The MGD online registration service was launched on 1 November 2012. If machine games will be available for play on 1 February 2013, those responsible for premises must apply for registration before 1 January 2013 to avoid a penalty.

The MGD online registration service will enable applicants or their agents to register for MGD online and make changes to their registered business details online.

Over the coming months, the service will also let registered people and agents submit and view returns online.

Machine Games Duty for agents

HMRC's Machine Games Duty for Agents service allows agents to carry out a number of tasks online on behalf of their clients.

Key features of the service include:

• setting up online authorisation to act on behalf of clients
• changing client's registration details

In time, the service will also allow agents to:

• submit client's MGD Returns online
• view client's MGD Returns that have been submitted online

Points of interest

Those responsible for premises on which dutiable machines will be available for play at 1 February 2013 will be able to register for MGD from 1 November 2012.

Registrations in respect of existing operations must be made before 1 January 2013 to allow HMRC to process applications in plenty of time before 1 February 2013.

Businesses which have registered online for MGD will be automatically enrolled for the MGD online service. An ‘activation’ code (sometimes referred to as a PIN) will be sent in the post to the business address. This is required to activate the MGD online service.

Find out more about Machine Games Duty Online
Find out more about How to sign up for Machine Games Duty for agents"

Fair enough.

Now here's what they haven't told anyone about the resources allocated for this, but loyal readers with long memories may recall I wrote about this in March of this year.

The resources for the implementation of the tax (ie staff and computer systems) is, so I am advised,  woefully inadequate. Currently the UK has approximately 1000 Bookmakers, 300 Bingo companies, 4 or 5 Pool Betting operators and about the same number of casino operators - plus the national lottery. AMLD licenses, whilst large in number, are usually issued to traders on an annual basis as there is an advantage built in to getting 12 month licenses, and it is fairly cut and dried if the tax is being paid.

Under the new system there will be another 42,000 quarterly returns, thus massively increasing the workload of HMRC's accounting centre.

How many extra staff will HMRC allocate for this increased workload?

Approximately 12-15 extra staff (about double the current number), they will help to input the forms. Unfortunately, despite Phil Pavitt's alleged superhuman abilities, the new computer system was not yet available for them to train on. I am also advised that the budget for development of the computer system was already "more than spent", with nothing to show for it.

Now I can hear some wise heads tutting, and asking why input is not done online (as HMRC prefers for so many other taxes etc). Well it seems that the Treasury insisted that traders be allowed to put in paper returns, and as you can see from the HMRC statement online submission of tax returns is not yet possible.

The origins of MGD can be found in the systems from Australia and New Zealand tax authorities, except that in Australia and New Zealand there are enforced computer audit functions and bank accounts from which the tax authority can take the appropriate tax amount.

Additionally, the UK legislation does not force traders to keep individual machine records. This means that the tax is almost impossible to audit, and it will make it difficult to work out what the traders' normal tax liabilities are from the start.

Problem?

Yes, the tax covers two categories of machines which therefore need to be known and identified.

Did HMRC warn HMT that this new tax won't work?

I am advised that they did, bit that the warnings have been ignored!

Sadly another accident waiting to happen, which will be blamed on HMRC (even though in this instance it appears not to be HMRC's fault).

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance




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"

Missing In Action - Online Snafu

My thanks to a loyal reader who dropped me a note the other day, about a problem that one of his clients has had wrt an online tax return that appears to have gone missing.

"One of our clients has just received a letter from HMRC which says: -

'our records show that you filed your self assessment tax return late last year.'

The letter then goes on to threaten penalties if the 2011/12 return is late.

This is all very well, but this client's 2010/11 tax return was submitted, online, on 11 January 2012. 

We received an e-mail from HMRC on 11 January 2012 confirming receipt. 

HMRC's online services shows that this client's 2011 tax return was received on 11 January 2012. 

The client was not charged any penalty for a late tax return.

All of this indicates that the tax return was not late.

No doubt this will get blamed on some computer problem.

Doesn't look good for RTI does it?"

A straw in the wind wrt the "success" or otherwise of RTI and problem for Phil to address, I would suggest, before he leaves.

Does anyone have any theories as to how this could have happened?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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 - LOL!

My thanks to a loyal reader who sent me this link from the ICAEW Taxforum, where one observant commentator has spotted a "wee flaw" in HMRC's alleged "relaxation" of the rules re RTI submissions:

The recent relaxation only applies if a number of conditions are met:

Payments which meet

all of the following conditions: 

1. made to employees for work done on the day of payment;

1. and
2. made non-electronically (e.g. cash or cheque);
3. and
4. made at a time or place where it would be impractical for it to be reported ‘on or before’ the time of payment;
5. and
6. where the employer cannot know how much the payment will be in time to report the information in advance of the payment being made. 

Note, in particular, condition 2 - so a payment by electronic transfer (made over the phone to my bank as soon as I know what my part-time nanny's hours have been for the day) does not qualify.  Please could someone let HMRC know that (a) electronic payments are not necessarily made by large employers with big computer systems and (b) cheques are going to be abolished!   I will start paying her in cash - oh no, that's immoral isn't it....?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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 Service Performance

The ICAEW recently conducted the fifth in a series of surveys asking its members to provide their views on HMRC’s "customer" service standards. The results of the survey have been published as TAXREP 58/12 HMRC Customer Service Performance, and were copied to the National Audit Office (NAO).

I am ungemused to see that the ICAEW has adopted HMRC's "Orwellian speak" word of "customer" when referring to taxpayers.

The survey asked the same questions over five years. Of the respondents to the survey, 40% came from small firms (those who are not part of a regional or national practice) and a further 38% were sole practitioners.

The top three issues were as follows:

- Delays in receiving answers to postal queries - 83%
- HMRC inability to resolve issues satisfactorily - 64%
- Difficulty in contacting HMRC - 56%

The following key points to emerge from the survey were fed back to HMRC:

Tax agents are acknowledged by HMRC as an essential part of the UK tax system. It follows that given this vital role, they need to be able to communicate with HMRC easily, efficiently and reliably.

The ICAEW remains very concerned about HMRC’s ability to meet its aspiration to "provide an increasingly efficient and high quality service" while reducing staff numbers.

Members responding to the survey identified three areas which HMRC should concentrate to help improve overall service standards. In order of priority, these were:

- nominated staff having ownership of problems;
- e-mail access to HMRC;
- better trained staff;

Difficulty in communicating with HMRC is the largest problem for agents. It is difficult to get through on the telephone (this will come as no surprise to this site's loyal readers), HMRC staff who answer the phones frequently do not have sufficient knowledge to be able to resolve queries, promised call backs do not always happen and letters sometimes remain unanswered.

The Agent dedicated line (ADL) for SA and PAYE is welcomed by agents, and there is a call for ADLs for other taxes and services eg debt management, employer issues, on-line services.

The call for more ADL’s is a reflection of the poor service given to the public on these other lines, and this needs urgent attention.

HMRC is spending considerable sums developing its on-line services for businesses, particularly smaller businesses. However, it does not always consider the needs of agents when these systems are designed.

As ever views and comments are always welcome.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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"

Phil Pavitt Leaves HMRC's Sinking Ship

In October I wrote about our old chum Phil Pavitt, who apparently had been moved from his role as HMRC's ubiquitous Chief Information Officer:

"I see Pavitt is no longer HMRC CIO. Apparently he has been replaced by his deputy Mark Hall. Pavitt's new title is something like Director General of Security and Information etc. 

Anyone know if this is promotion, demotion or a move sideways. 

Maybe he is just getting off the track before the RTI and Universal Credit express smashes into the buffers killing all on board and letting his underling take all the blame for any train wreck."

One day later I noted that he had in fact been "promoted" to "Director General Change, Security and Information".

Now here's the "funny" thing, that promotion appears to be pointless (unless it was designed to move him away from RTI).

For why?

Pavitt is leaving HMRC.

Quelle surprise!

He is joining Aviva in January.

RTI of course won't be live in January, funny that!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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"

Must Try Harder?

The National Audit Office (NAO) this week gave HMRC a wee bit of a kicking for failing to curb the rising tide of new tax avoidance schemes.

The Telegraph reports that HMRC faces a Herculean challenge of around 41,000 avoidance cases, relating to mass-marketed schemes used by individuals and small businesses, with no clear strategy on how to tackle the problem.

In the tone of a schoolmaster berating a lazy pupil Amyas Morse, head of the NAO stated:

“HMRC must push harder to find an effective way to tackle the promoters and users of the most aggressive tax avoidance schemes.” 

I have to confess that a handful of my school reports sometimes expressed similar sentiments about the need to "try harder". Such sentiments are all very well, if the hapless pupil has the interest/will/understanding/resources etc of how/where to try harder.

However, I am of the view (as expressed many times before) that the rise of avoidance schemes is a result of the increasing complexity of the tax system; the responsibility for which rests in the hands of our "respected" members of parliament.

Morse went on to say:

“Though its disclosure regime has helped to change the market, it has had little impact on the persistent use of highly contrived schemes which deprives the public purse of billions.”

Rules requiring disclosure of certain avoidance arrangements have unearthed more than 2,000 avoidance schemes. The DOTAS regime has led to nearly 100 tax law changes, but leaves HMRC on the back foot while new schemes are designed to circumvent the revised law enter the market. 

As I noted only a few weeks ago, it is all very well blaming HMRC for everything that is wrong with the tax system in this country. However, whilst there are some aspects that clearly fall under HMRC's remit (eg procedures/administration), as I have stated many times before the buck stops with Parliament:

- It is Parliament that drafts the legalisation that is blamed by the NAO and MPs for "allowing" tax avoidance to occur.

- It is Parliament that drafts the legislation that makes the UK tax system unfeasibly complex and nigh on impossible to understand.

- It is Parliament (dare I mention wee Gordon) that merged IR and Customs, thus bringing about this buggers' muddle that is HMRC.

- It is Parliament that decrees HMRC must cut its resources.

- It is the government that has failed to make a single minister responsible for HMRC.

Therefore, ultimately, who is to blame for the mess that NAO (and PAC) are complaining about?

As ever views, comments and opinions are always welcome.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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 Recycled Money

In June 2012 I quoted David Cameron waxing lyrical about tax avoidance:

"For instance we have put £900m extra into HMRC to enable them to go after aggressive tax avoidance."

As per Channel 4 News today HMRC admit that the £900M was not new investment:

"When we asked the HMRC to explain the give and take in their budgets, they admitted that it was actually “recycled” money."

Snort!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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"

Rank Hypocrisy

My thanks to a loyal reader who pointed us to a rather interesting article in Private Eye, that exposes the hypocrisy of the government/PAC wrt tax avoidance practised by multinationals.

On the one hand the government/PAC lambastes these companies for not paying "enough" tax, yet on the other hand the government pays them vast sums of taxpayer money for government contracts.

As per Private Eye:

"Across the board the position is clear enough. The companies to which British taxpayers hand over billions every year for questionable IT services are paying peanuts to the government in tax on their ample profits."

Included within Private Eye's list of companies are the Aspire consortium (paid approximately £800M per annum by HMRC).

Within the consortium Fujitsu (which is paid by HMRC to run its ICT) paid £10M tax on its profits over the last four years on turnover of £9BN, and Capgemini, which doesn’t disclose details of actual payments, shows tax credits in recent years, indicating no tax payments at all. Their absence is accounted for by profit margins way below the group’s worldwide performance, and tax relief for pensions costs and research spending.

Tax avoidance is perfectly legal. However, it is hypocritical of the government/PAC to lambaste companies for practising it yet at the same time rewarding them with taxpayers' money for government contracts.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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"

Tax-Hell

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Nichola Ross Martin, Director www.rossmartin.co.uk

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Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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 Debt Collection Tactics II

By happenstance, at the every same time that I was writing yesterday's article about HMRC's debt collection tactics, a fellow blogger and loyal reader (Dick Puddlecote) was writing about his own personal experience of HMRC's debt collection tactics.

Here is his piece in full:

"The oddest thing happened this morning.

Sitting at my desk, some woman just wandered in through our warehouse and asked to talk to a director. I replied that I'm one so how can I help. She tersely declared that she works for HMRC and demanded a payment of £15,000 for overdue corporation tax.

I was taken aback for a moment as she looked about 60 and was dressed in jeans and a sweat shirt - it's not the kind of thing one would expect her to come out with.

As it happened, the people who deal with our accounts were both at a funeral at the time, so I said I'd have to talk to them first. She, however, insisted that as I was a director I would be able to sign a cheque right there and then. Of course I could, but there was no way I would even consider doing that, especially for someone who just breezes in arrogantly from the street.

She fixed me with a surprised glare (perhaps for not shitting myself when faced with a rep of the government, I dunno), before handing me her card and telling me all the nasty things that might happen if it's not paid in the next week. Now, I've often said that tax is effectively extortion with menaces, but I've never seen it illustrated in such a blatant manner.

On later talking to our credit controller, she said that we'd paid a huge amount up front and were just waiting for some communication of the balance due before settling it - that's what one would expect from a government agency, after all. However, we'd not received a single letter or phone call to tell us what we were supposed to pay. Wouldn't it have been much more professional - and less costly in time and, therefore, money - to ring or write rather than sending some late middle-ager round to ask for a cheque out of the blue?

And when did employing similar intimidatory methods to 1930s mafia protection racketeers become an acceptable state policy?

UPDATE: By coincidence, Ken Frost has today provided another example of eager HMRC debt collectors turning up unannounced and demanding cash."

It seems, as the old saying goes, that there's a lot of it about!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance 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 Solar Tax Investigation Insurance



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 Debt Collection Tactics

My thanks to a loyal reader, who wrote to me last week about the problems that some of her clients are having with HMRC's debt collection tactics. She asks if anyone else is having similar problems:

"I am accountant acting as agent for several small companies who, through no fault of their own and generally, due to cash flow issues caused by their dealings with large corporate entities, are late with their payments of PAYE.  

These companies are regularly late but not overly - it may be that they are making monthly payments up to 3 weeks behind schedule.

HMRC have taken to sending collection agents to the companies, without warning, to visit and threaten to distrain over goods and assets, usually with no information as to the amounts of PAYE due: they are speaking to any employee they come across without gaining preliminary security clearance.  

If I were to do this, as an unsecured creditor, to any of my clients who were 30 days late in paying my account, it would be construed as harassment, yet HMRC consider themselves above this.  

Despite explaining to these agents that the employer they are harassing is not holding off PAYE because they want to and that as soon as cash flow permits, payment will be made which is evidenced by the employers payment history, regular visits are being made to premises which unsettles employees to put it mildly, and time wasted on these visits which could be put to better use in production of goods or services.  

Employers are aware that interest will be charged on late payment and this is accepted, but constant harassment should not be allowable, particularly as small employers are held up to be the 'saviour' of the UK GDP by Government spin doctors and that their voices are being heard when this is clearly not the case.

I have written formally to complain, but the letters go unheeded.

Has anyone else suffered like this, to your knowledge?  

I would very much welcome discussion on this."

As ever feedback and comments are welcome.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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 Taxman's Tentacles

The FT recently published an interesting article "Ten ways HMRC checks if you’re cheating", which highlights how HMRC uses data and tip offs etc to identify those who may be evading tax.

It is worth reading, in fact HMRC also agree that it is worth reading as they have tweeted a link to it. Presumably putting "point ten" of the article into practice:

"10 Fear and guilt"

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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"

In Which The Guardian Offers Tax Avoidance Advice

It seems that the Guardian is of the view not all tax avoidance is morally reprehensible.

Snort!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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"

David Gauke's Dodgy Morals

I see that Gauke, who bemoans the "morals" of others, has decided to keep some of the profits made on his taxpayer funded London flat that he sold in August.

As per the Telegraph:

"David Gauke, the Exchequer Secretary, made £67,000 in profit from the sale of his London flat, but under parliamentary rules is not required to return all the profit he made to the expenses watchdog. 

An investigation by Channel 4’s Dispatches found that although Mr Gauke made tens of thousands of pounds when he sold the property in Kennington, he is understood to have repaid almost £40,000 to the Independent Parliamentary Standards Authority (Ipsa). 

This is because MPs have to repay only the profit made in the previous two years. 

He is expected to pay capital gains tax on the remaining profit."

That's the spirit eh David?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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 Staff Survey Results

My thanks to a loyal reader, who has advised me that the HMRC staff survey results will be out on Monday.

However, I understand that Directorate and Group level results will be released 2 weeks later.

Why the 2 week delay?


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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 Soft Landing

Further to my article yesterday about the problems facing SME's wrt next year's RTI launch, and the seven day window for submitting data, it seems that HMRC are signalling that the first year of RTI will be "RTI Light" wrt penalties.

Payroll World quote Ruth Owen (HMRC's Director General of Personal Tax) who has drawn the short straw of being responsible for RTI:

“We are minded towards the soft landing approach so giving people perhaps a year to run RTI before we move into the new penalty regime.

Bearing in mind that with the migration some bigger organisations aren’t coming onto RTI until next summer then we believe everybody deserves a bit of a default period before we start heading into penalties.

I believe that most businesses will comply and want to comply and our most important thing is let’s get the tax in and let’s get RTI up and running as opposed to creating work for everybody, which is penalties – we’d rather have the money than the penalties.”

It seems that HMRC will issue "dummy" penalties to employers from April 2013 (which will not incur a real fiscal cost), in order that they are made aware when they have not complied with their RTI duties.


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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"

To Dream The Impossible Dream

I am gemused to see that despite HMRC's propaganda drive to convince us that its flagship Real Time Information (RTI) is ship shape and Bristol fashion, not everyone has fallen for the BS.

Step forward my own professional body, the ICAEW, which is scathing about RTI calling it:

 “at best unrealistic and at worst impossible” 

ICAEW quite correctly notes that whilst the transition may be "relatively straightforward" for larger companies, SME's are really going to struggle.

The ICAEW is of the view that due to restrictions under RTI, employers have to submit a return within seven days. Frank Haskew, head of ICAEW Tax Faculty, is quoted by Economia:

"It will not work for many businesses.

It’s not yet clear what HRMC will do if faced with widespread non-compliance by employers – will they apply penalties or turn a blind eye? 

Either way, the requirement could inflict serious damage to the credibility of the UK tax system." 

A poll of 1,700 firms by the Federation of Small Businesses last month found that 25% had never heard of the new RTI payroll system, with only 16% fully aware of it.

In addition, two thirds of respondents to the survey were sceptical that RTI will achieve its aims and more than 60% of firms have not had any communication from HMRC about the changes.

Ship shape and Bristol fashion?

I don't think so!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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"

Lean Goes From Strength To Strength

In October I mused on the "success" or otherwise of Lean, and what it had done for the once fine brand of Toyota:

"Toyota, you may be aware, has had to recently recall "some" of its cars because of a production fault over a number of years.

How many cars?

Over 7.4M (manufactured between September 2006 and December 2008), it is in fact the largest recall in the company's history!

Mind you, it has had other recalls in earlier years; again because of failures in production.

Oh dear!

What does this tell us about Lean?

At the very least it tells us that Lean is not a panacea for the ills of the public (or indeed the private) sector. The evangelists and zealots who spoke at last month's conference (after they have counted their earnings from the conference and Lean consultancies) may care to reflect on that! "

One month on and blinkey, blonkey, blimey, Toyota have had to issue yet another product recall. This time Toyota will recall 2.7 million cars worldwide because of problems with the steering wheel and water pump system. The recall affects nine models, including the Toyota Corolla and the second-generation Prius.

Lean goes from strength to strength!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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"

PAC Hypocrisy - Taxation of Multinational Companies

Yesterday the House of Commons Public Accounts Committee (PAC) questioned the "great and good" from a number of well known multinationals about the "Taxation of Multinational Companies".

The guest list was as follows; Matt Brittin, Chief Executive Officer, Google UK, Troy Alstead, Starbucks Global Chief Financial Officer, Andrew Cecil, Director, Public Policy, Amazon.

The video of the hearing can be watched via this link Taxation of Multinational Companies.

"We are not accusing you of being illegal, we are accusing you of being immoral.” 

UGH!

As an aside, whilst it is all very well that Margaret Hodge et al get worked up over the percentage of tax paid by these companies in the UK, when compared with their UK turnover etc, Hodge might care to read what Stemcor has to say on the subject.

Who are Stemcor?

Oh that's Hodge's family company, it was founded by Mrs Hodge’s father Hans Oppenheimer over 60 years ago.

As per the Telegraph:

"Stemcor’s tax bill to the exchequer equates to just 0.01pc of the revenues it booked through its UK-based business.

In accounts filed with Companies House, Stemcor revealed that despite generating about one third of its revenues in Britain, its UK tax contribution made up only 2.7pc of the tax the company paid globally."

Here's what Stemcor has to say on the matter (my thanks to loyal reader who pointed me to the statement):

"Several comments have appeared in the press suggesting that Stemcor is involved in tax avoidance in the UK. Stemcor refutes these allegations.

Stemcor’s directors and shareholders are proud of the company’s contribution to the UK economy. As well as creating jobs across the UK, Stemcor has also provided financial support to steelworks in the UK, helping to regenerate the British economy. Stemcor has nothing to hide and is happy to provide more detail about its tax affairs to the media if requested.

Stemcor is almost unique among international trading companies in that it still maintains its headquarters in the UK. Most other such companies have located themselves in low tax jurisdictions, while still having sizeable operations in London. Stemcor’s shareholders have refused to countenance such a move.

In the past 3 years, a total of £14m of corporation tax has been paid by Stemcor in the UK. Stemcor’s effective tax rate internationally in the last three years has been over 30%, much higher than that of other international trading companies. 2011 was, however, not a strong year for the UK operations and margins were squeezed due to the adverse economic climate – this resulted in a very low UK corporation tax charge for that particular year. In 2011 Stemcor paid tax in jurisdictions such as the USA and India, where corporation tax rates are higher than in the UK. It is just an unfortunate fact that the UK operations overall performed poorly in 2011, resulting in a very low UK tax charge.

Stemcor’s consolidated financial statements are audited and signed before the end of March following the December year end and certain assumptions are made in preparing the UK tax computations which support the UK tax charge in those financial statements. In accordance with UK law, UK corporation tax returns are filed any time up to 12 months following that year end. The adjustment of a tax credit of £586k in the 2011 financial statements arose as a result of reconciling the Group’s financial statements back to the UK corporation tax returns for 2010, which were calculated and filed on a timely basis based on UK tax legislation. This resulted in the UK tax charge for 2011 being reduced even further.

Profits in a trading company cannot be compared to profits in a manufacturing company and turnover is no guide to the level of profits made. Stemcor’s annual report for 2011 shows that total international Group profits were only around 1% of turnover, which is typical for many commodity trading companies. However, profits in some of the jurisdictions where Stemcor operates were higher than 1%, while in other jurisdictions the Group made little profit or even losses.

In any international group which has interaction between its worldwide offices, whether through the trading of goods or provision of services, transfer pricing occurs. Stemcor, in accordance with OECD guidelines, regularly monitors the arrangements between its group companies to ensure that its pricing complies with the arm’s length principle and with tax legislation. The Group uses Price Waterhouse Coopers as a consultant to ensure that it pays the correct taxation in the various jurisdictions in which it operates around the world and does not abuse transfer pricing to avoid tax."

Oh, and before I forget, I am reminded by the same loyal reader that Hodge voted for s554E (12) ITEPA 2003 exempting MPs from the disguised remuneration anti avoidance rules.

Tricky thing tax, isn't it?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

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"