HMRC vs Littlewoods

HMRC has lost a High Court case against retailer Littlewoods, and will have to pay Littlewoods £1.2BN in compound interest on VAT overpayments made by Littlewoods between 1973 and 2004.

Lawyer Giles Salmonds said the ruling by Mr Justice Henderson could have significant implications, because it takes into account the interest's increased (or compounded) value over the years. He is quoted by ITV:

"Littlewoods claimed that based on principles of EU law they were entitled to the compounded use value of money they had paid to HMRC as VAT.

Today's judgment means that HMRC will be liable to pay billions in interest to other taxpayers who have already claimed overpaid VAT going back to the early 70s, but have only been paid simple interest based on a reduced average of bank base rates."

However, before those owed money rush off to make a claim, it is highly likely that HMRC will appeal the verdict. As per Mr Salmonds:

"This is an important victory for taxpayers, but it is very likely that HMRC will seek permission to appeal to the Court of Appeal."

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



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"

Clasper Joins Serco

Mike Clasper, the former Chairman of HMRC, has taken a non-executive directorship with Serco, a government services company. Clasper takes on his new role this month.

By happenstance HMRC paid Serco £42.6M in 2011/12 for one year of website development and support.

£43M for a website!

Easy money!

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



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"

300 Job Losses

Mary Aiston, HMRC's director of specialist tax, which targets high-end taxpayers and complex cases, has written a memo that was leaked to the Guardian that 300 jobs from the unit will go by 2015. Additionally, those who remain will be asked to deliver more revenue with less resources.

In the memo, posted on HMRC's intranet under the section headed "Mary's Diary", Aiston says she hopes that half of these jobs will be lost through "natural wastage".

"Looking at our plans, over 2014-15 specialist PT [personal tax] will be about 250-300 people smaller. We will do this by considering each role when people leave specialist PT, whether we need to fill their role and, if so, whether we can move someone into it who is already in specialist PT.

We won't be able to make all the changes we need to in this way (what's often referred to as using 'natural wastage') but our plan at this stage is that roughly half of the reductions will be through natural wastage."

Meanwhile, the targets for the number of taxpayers' telephone calls answered and letters opened has been cut, she said, to 80% within 15 days.

"While these are lower than for 2013-14, if we can deliver them consistently during the year across the whole of PT, customers will experience a better service as there won't be the drops in service at peak times."

Apparently she wrote that with a straight face!

HMRC is also expected to announce the closure of its Edinburgh office of the high net worth unit – with the 23 staff being split between "local compliance" and "trust and estates".

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



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"

Taxing The Dead

There are only two certainties in life, death and taxes.

Sadly, thanks to an error with RTI, HMRC tried to meld the two certainties together and sent a tax bill to the late Isabella Todd who died in 2002.

The bill for £655 was opened by her daughter Kate MacGlashan, who claims that HMRC staff refused to believe that her mother had died.

She is quoted by the Mail:

"Not only was I angry at the ludicrous £655 tax bill, I was incensed when — for half an hour in a dispute about identity — the official consistently maintained that I did not know my own mother’s date of birth. Only after a lot of arguing did he finally agree something might be wrong.

I was extremely tempted to ask the young man in the call centre if he would like me to lend him a shovel to dig her up so he could speak to her."

After Money Mail got in touch with HMRC, it quickly emerged that the tax bill had been sent in error. Mrs MacGlashan’s mother had been paid a small company pension by Prudential every three months. When she died in 2002, this payment stopped.

However, the newly introduced RTI created a record for Mrs Todd that automatically triggered a tax bill. This wrongly calculated underpaid tax. It was sent to her daughter’s house because she’d been cared for there before she died.

Elaine Clark of Cheapaccounting.co.uk is quoted:

"It may look like a simple administration mistake, but this shocking incident displays a shocking lack of control of people’s personal information — a deceased record should have been picked up.

The taxman has made a lot of noise about improving its customer service, but howlers like this show it has an awfully long way to go."

HMRC has now wiped out the underpaid tax and sent Mrs MacGlashan a cheque for £100 to apologise.

Let us see what happens when HMRC are able to directly debit what it believes to be be taxes owed from people's bank accounts!

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



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"

Whistleblowing - Osita Mba Attends PAC

Osita Mba (ex HMRC Solicitor) attended yesterday's PAC hearing on Whistleblwoing.

Witnesses

1. Kay Sheldon, Care Quality Commission, Cathy James, Chief Executive, Public Concern at Work, and Osita Mba, former HMRC employee
2. Lin Homer, Chief Executive and Permanent Secretary, HM Revenue and Customs, Jonathan Slater, Director General Transformation and Corporate Strategy, Ministry of Defence, Chris Wormald, Permanent Secretary, Department for Education, and Charlie Massey, Director General, Strategy and External Relations, Department of Health

Lin Homer had told the public accounts committee that phone records had been obtained using the Regulation of Investigatory Powers Act (Ripa) to unearth information about Osita Mba.

Margaret Hodge said that HMRC's use of the anti terrorism powers, ostensibly to track down whether Mba had been talking to the Guardian's then investigations editor, David Leigh, had "shocked her to her bones".

Hodge told Homer she was particularly surprised "that you made a request under Ripa, which is there to deal with terrorism". She asked for assurances that HMRC would "never again use these powers on a whistleblower".

Homer of course wouldn't give such an assurance, as per the Guardian:

"You know that we cannot offer carte blanche assurances for evermore that we won't use these … I have other duties of care to parliament and other individuals."

Power corrupts, the more power given the HMRC the more liukely it is that it will be corrupted.

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



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"

Hard To Fill - You Get What You Pay For!

Last Monday I wrote about HMRC's attempts to recruit digital specialists, in response to the closure of its enquiry centres.

A loyal reader commented at the time:

"for the skills that they want they are offering low wages. yet again trying to get things done on the cheap, people have already applied hoping to negotiate the wage but have been told the bottom of the scale is the rate that will be paid. also they will have worse terms and conditions than fellow colleagues already working there."

This point has been reiterated by Ronnie Ludwig, partner and head of the private wealth group at Saffery Champness, who is quoted by economia:

"HMRC has come under a lot of criticism recently in a very public manner. For a long time people have felt undervalued both in terms of the job they do and also financially, in terms of pay and rations.

HMRC wouldn’t be at the top end of what they could get. 

I suspect that the morale issues and feeling of not being appreciated would be affecting the ability to recruit into that market."

In other words, you get what you pay for!

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



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 Targets Freelancers

PCG, the organisation which represents the UK’s freelancers, contractors and independent professionals, reports that HMRC has undertaken a campaign which targets the UK’s very smallest businesses by requesting detailed information from their clients on all payments made to them under a contract for services.

The letters request a wide range of sensitive information from the clients including the supplier’s name, the ‘worker’ name if different, along with VAT number, passport number or National Insurance number and details of any amounts paid.

In a move PCG believes is designed to avoid bringing larger suppliers into scope, HMRC has only requested the information on payments of up to £350,000. According to PCG’s CEO, Chris Bryce, this instance of HMRC choosing to target independent professionals while purposely excluding large consultancies is yet another example of one rule for small companies and another for big business.

Chris Bryce said:

“There is simply no justification for HMRC to write to clients requesting detailed information on the working practices of their suppliers. Especially when you consider that they are doing so with absolutely no evidence of any wrongdoing.

For any business, it would be incredibly damaging to have HMRC writing to their clients to insinuate that the way they are doing business may not be legitimate. For the smallest businesses, where client relationships are key, this is especially harmful.”

HMRC appear to be using recent data from the Office of National Statistics which points to a rise in self-employment over the last few years in order to justify this new tactic - something PCG believes is penalising the sector for success.

“Independent professionals contributed £95billion to the UK economy in 2013. This figure is continually rising as more and more people choose to start their own business and this can only be good for our economy.

Considering that the Prime Minister, David Cameron, recently told PCG that he believes SMEs are the very lifeblood of our country and of local communities across the land, we are deeply concerned about this unwelcome development.

Waging a campaign against these enterprising individuals by targeting them via their clients is anti-business. What’s more, to use the success of the sector as an excuse just isn’t acceptable. Independent professionals should be celebrated, not penalised for the way they choose to work.”

It seems that HMRC is targeting the smaller fish, because it knows that they are easy pickings.

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



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 Granted New Powers

As noted last week, yesterday's Budget has granted HMRC new powers to take taxes owed from people's bank accounts when multiple attempts to contact the laggardly taxpayers have failed.

A consultation document is expected shortly.

Let us see how this works in practice!

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



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"

Budget 2014

Tweets about "#budget2014"
   
Rejoice, for today is Budget Day!

Time for George Osborne to add a few more pages to Britain's great big book of tax legislation. As I noted in January 2013:

"Tolley's Tax Handbook, the bible of British tax, now 11,500 pages long. Doubled under Gordon Brown. And still growing under G Osborne."

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



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"

Greek Tax Anger Management Courses

My sympathies to the staff of the Greek revenue service, who seemingly have to endure levels of anger and threats of violence that far exceed those endured by their counterparts in HMRC. The situation has become so bad, that Greek tax staff are being put through compulsory anger management courses.

The Guardian quotes Fotis Kourmouris, a senior official at the finance ministry's public revenues department:

"Today, in Greece, everyone is either unhappy or angry when they have to go and pay at the tax office.

There is a lot of negative emotion … in the framework of better customer service, classes in psychological and emotional intelligence had become necessary.

Every employee who deals with customers will attend them over the next six to eight months.

We are not only trying to improve relations but break the vicious cycle. Tax offices blame citizens [for the country's fiscal woes] and citizens blame tax offices for all their problems. It is important that trust is rebuilt."

While the rich and well connected are perceived to get off scot-free, Greek tax inspectors have found themselves at the sharp end of popular rage. In recent months visiting auditors have been chased out of remote villages, hounded out of towns and booted off islands by an increasingly desperate populace.

Trifonas Alexiadis, vice-chairman of the national association of employees at state financial services said:

"We've had multiple cases of violence at tax offices by angry members of public, including physical assaults; shots were fired in one case, and one attacker came with an axe."

A series of new tax laws has further fuelled public anger. Since the outbreak of the Greek debt crisis, close to 30 new levies have been introduced by governments desperate to augment empty state coffers.

Standing in line on the first floor of a graffiti-splattered tax office in central Athens, an accountant Heracles Galanakopoulos said:

"They produce a law that nobody understands and then produce another three to explain it. By the time people get here they are really very angry.

I spend at least five or six hours a day reading up on all these new laws and still can't keep up. Anger management is a nice idea but in a system that is so absurd it's not going to make a jot of difference."

Let us trust that our politicians take note, and start to make good on their "promises" to simplify our tax system!

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



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 Recruiting Digital Specialists

HMRC is in the process of recruiting digital specialists, as it alters the way it interacts with taxpayers (following the decision to close its enquiry centres).

Accountancy Age reports that the positions will be based in its Digital Delivery Centre in Newcastle, there are around 30 positions needed to be filled.

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



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 To Raid Bank Accounts

Here's an interesting pre Budget leak, according to the Mail (which sourced the story from the Sun) money owed to the Treasury by certain taxpayers will be taken directly from their bank accounts.

Aside from the fact that pre Budget leaks should not occur in the first place (sadly pre Budget Purdah has long since been abandoned by Chancellors both Labour and Tory), and the fact that the report is in the Mail, there seems to be some confusion in the article over whether the alleged new powers relate to tax owed by those who have an outstanding tax liability (tax debts can be built up by law abiding citizens) or only those who have evaded tax (ie broken the law).

Anyhoo, if the Mail is correct, HMRC will be given the power to take money from those who owe HMRC over £1K and who repeatedly ignore HMRC's attempts to recover the money owed. Currently HMRC has the power to seize assets.

The new power is to be revealed in next week's Budget, and is apparently one of Beaker Alexander's ideas.

Well then, if this story is true, let's see how this works in practice!


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



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 Demands Upfront Tax Payments

HMRC proposed in January that similar tax avoidance cases should be grouped together, thus enabling HMRC to demand upfront payments of tax in cases that are similar and that have been successfully tried for evasion. The proposals by HMRC, relating to the open 65,000 marketed avoidance schemes, can be read here.

It seems that HMRC is trying to jump the gun and working on the assumption that certain tax avoidance schemes are in fact evasion, even though the schemes have not been ruled on as illegal in court.

Unsurprisingly not everyone is happy with this. Andrew Watters, director and tax expert at Thomas Egger LLP, is quoted by International Adviser:

“The report on HMRC proposals to target disputed tax bills is a sign of their frustration at the delays in collecting what they believe to be the ‘correct’ amount of tax.

HMRC believe that some are simply using the legal process as a delaying tactic to paying their tax.

In a balanced playing field, one might think that when the taxpayer wins the HMRC should pay a penalty for inconveniencing the taxpayer and forcing him to litigate. No such plans have been proposed.”

HMRC say the guidelines, which will be included in next week’s Budget, will “rebalance the economics of entering into avoidance schemes”; ie it is aimed at dissuading people/companies from entering into complex avoidance schemes.

Gary Richards, tax partner at Berwin Leighton Paisner, said:

“HMRC are frustrated and have been criticised for the length of time such cases take but the problem is partly of their own making. 

The proposals run the risk of, in effect, removing people’s right to appeal.

For some of the cases that were mass marketed one decision may be appropriate, but the proposals do not specify what type of cases they are aiming at.

There are subtle differences in the law and facts; this means that in many cases it is hard to use one case to determine thousands of others.

They haven’t thought through the principles, they need to be more targeted.

If people receive a notice telling them they have to pay they may be deterred from going to court, when in reality they could appeal on the grounds that their case is different to the one it is being grouped with.

People may end up paying tax after receiving one of these notices but only realise that they did not need to pay if a later decision goes against HMRC.

It is the absence of the ability to challenge notices that is the most pernicious problem.”

CIOT president Stephen Coleclough said:

“Handing HMRC almost unprecedented executive powers to decide who falls within the mischief they intend to deal with, without the usual safeguards and appeal lightly, is not something which should be done lightly.

If this is to proceed, HMRC should issue comprehensive guidance at the same time as the Bill is published to show what situations are to be tackled in this way. It should only apply to members of the same scheme or very close variants of it.

These emergency measures should not be a permanent state of affairs.”

Sadly it is a fact of life that emergency measures often end up being permanent!

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



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"

Meet The Taxman

As I noted in February there will be a documentary series about HMRC, filmed by Tiger Aspect. Subsequent to my article, the Independent has put some more flesh on the bones.

The series entitled "Meet The Taxman" will be shown on Channel 4 and, seemingly, Tiger Aspect Productions (the company behind Mr Bean) will be given unprecedented access to HMRC.

Meet The Taxman will follow inspectors and investigators on the frontline as they set out to catch tax evaders and collect unpaid tax.

The series will focus on tax inspectors targeting the so-called “high risk” sectors, from “plumbers and scrap merchants to dentists and doctors, offshore bank accounts and high net worth individuals.”

It will also follow criminal investigation units with the power to arrest, “busting crime gangs all over the UK.”

The Channel 4 series, according to the Independent, promises to deliver positive PR for HMRC.

Well we shall see how true that "promise" really is, I refer to what I said in February:

"Documentary makers (especially "reality" TV shows) are very skilled at making fools of those who appear in them eg; The Hotel Inspector, The Call Centre, Come Dine With Me, Permission Impossible etc."

Here is Channel 4's press release about the 3 part series.

Lawrence Walford, series producer, said:

“We all have a mental picture of the taxman as someone who takes away our hard earned cash. But during the last year, I’ve realised there is much more to this job than meets the eye. There are some fascinating stories and unexpected characters which will make for a compelling documentary series.”

Nick Mirsky, Channel 4 Head of Documentaries, said:

“Money from taxation funds everything we value most about society, yet the team who collect it have often been viewed with mistrust and suspicion. What is exciting about this commission is that it offers unique access to a group of public servants on whom we are more dependent than ever to help make the nation's books balance.”

Channel 4’s publicity material suggests that the series will assist HMRC’s attempts to present a positive public image.

“HMRC’s message is clear – no matter who you are - if you’re avoiding tax, the net is closing in. In contrast, viewers will also see how HMRC helps the public and businesses who do the right thing and pay their taxes.”

Methinks HMRC is being set up, as is the case with all participants in "reality" TV!

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



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 Has Fundamental Problems

Oh dear, despite HMRC insisting that everything in the garden (wrt RTI) is rosy not everyone agrees.

Step forward the ICAEW, which has stated that RTI is "badly designed" with "fundamental problems".

Peter Bickley of the ICAEW is quoted by This is Money:

"It is not going as smoothly as the Revenue would have you believe. It has been badly designed from the beginning and there are fundamental problems.

There are problems of duplicate entries, items not being processed, information which employers should be able to see on their screen not showing, employees put on the wrong tax code, and the Revenue’s debt management and banking arm pursuing underpayments based on incorrect information. This is causing a lot of anxiety.

The Revenue is saying “you have filed late” or “you have not filed something” in cases where the employer has filed late because they are allowed to under relaxations, or filed early and it was not recorded."

As an aside, I am rather amused to see that he is still calling HMRC "the Revenue". However, the point he makes is valid.

The ICAEW met with HMRC's Ruth Owen, who is in charge of RTI, to urge HMRC to fix its IT problems and relax its efforts to chase underpayments.

Bickley said:

"We suggested they adjust their tone and make sure they are not sticking the boot in. A lot of employers’ time is being wasted and costs are running up. We are pressing Ministers for the Revenue to be given funding to make RTI work."

The ICAEW is hosting comments from members about RTI on a blog post "RTI – are you swimming or sinking?"

So folks, how's it going for you then?

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



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 Race To The Bottom 10%

My thanks to a loyal reader, who directed me to a recently published blog by Sir Bob Kerslake (Head of the Civil Service and Permanent Secretary for the Department for Communities and Local Government (DCLG)) on the subject of Performance Management within the Civil Service.

"We are now starting the End Year Review period for the new Civil Service-wide performance management system. This system has introduced a consistent model across our organisation, which now looks at both “what” civil servants achieve and “how” they achieve it. Feedback on this has been positive, and I’m very proud that we now have a system which reflects our values as well as our achievements.

I am confident that introducing new performance management arrangements, done well, will radically improve the way in which we are all managed, and raise our overall effectiveness – whether that’s identifying and recognising high performers, or supporting those who need to improve."

This is the system that I wrote about in February which demands fixed quotas, wherein 10% of staff fall in the bottom rating regardless of their performance.

I noted at the time that:

"This is not a new concept, many "successful" private sector companies have used this technique (or variations thereon) eg Enron and Arthur Andersen (the failed accountancy firm that audited Enron). Seemingly the fear of "failure" is meant to be "motivational"."

Anyhoo be that as it may, Sir Bob is confident that the system will work:

"..the intention is that these ratings are guided not forced. There is a key role for managers here to ensure the system is applied fairly and consistently and that is why work is already underway to make sure they have the capability they need to run the process properly."

Aside from the nonsense of having fixed quotas for staff performance, its "success" or otherwise rests on the quality of management who make the assessment and then "guide" those who are in the bottom 10%.

Sadly for those in HMRC, based on comments on this site, the management skills of those "in charge" appear to be somewhat lacking; ie Sir Bob's wish that performance management arrangements should be done well is somewhat overoptimistic.

Aside from the comments on this site indicating that the system is not working, there are 300 comments on Kerslake's blog, most of which indicate that the system in the civil service as a whole is not working eg:

"I am sorry to say that I am not convinced. I know of many members of staff who have not had mid year review/talks with their line managers. Some still have not had last year's end of year review/talk. Bottom 10% has led to increased stress and depression. I am still waiting to find somebody who once in the bottom 10% has had guidance to help them improve."

"Sir Bob, this system is wrong. It allows perverse behaviour to reign supreme, it rewards favouritism, challenging performance markings does not result in changes and staff do not have faith in the system. We all know why you ask the poor performance question in staff surveys, and that is to get the result you want in order to say the staff want poor performance tackled – in turn you argue this is why you have this system. How about next time you leave out the loaded performance questions from staff surveys and put in protection to stop favouritism. I will sadly never be a box 1 from my manager's inferences – I'm a great performer, respected in the office, seen as reliable and positive – but unless I am best pals with the bosses it's hard cheese."

The key to an efficient organisation that staff are happy to work for is good management, poor management inevitably leads to failure and lousy staff morale.

Comments and views are most welcome, eg how is the "guidance" part of this system actually going?

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



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 Issues Bitcoin VAT Exemption

HMRC has abandoned plans to charge VAT on Bitcoin trading.

In new guidance, HMRC also said it would not levy the 20% tax on the creation (mining) of the virtual currency.

Bitcoin has been in the headlines over the past few months as it surged upwards, then downwards, in bubbles of speculation. To add to its "media presence" MtGox, a leading Bitcoin exchange, recently collapsed losing $500M in deposits.

Despite the fact that Bitcoin can be used for all manner of illicit transactions, money laundering and evasion HMRC exempted it because (as per the BBC) transactions "are exempt because they fall within the definition of 'transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments'".

However, VAT will apply to suppliers of goods and services sold in exchange for Bitcoin, based on the sterling value of the virtual currency at the point of sale.

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



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"

Pumping a Dry Well

The government has dismissed recommendations from the Public Accounts Committee over the reporting of HMRC's accounts and the tax gap.

Specifically the government has dismissed the recommendations that HMRC should "be more explicit" about the limitations of the current measure of the tax gap (£35M as per figures released in October 2013) and gather greater intelligence about the value of tax lost through avoidance.

However, both the government and PAC agreed that HMRC had overestimated the yields expected from UK holders of Swiss bank accounts, and that HMRC should pursue these more aggressively.

The government is quoted by Accountancy Age:

"The UK-Swiss agreement is raising revenue that would otherwise largely remain beyond the reach of UK authorities. The department continues to rigorously press the Swiss authorities to understand why receipts are lower than originally expected by either country. 

The department will also make full use of the enhanced exchange of information provisions under the agreement to identify ongoing evasion, and is contacting every person whose details were disclosed under the agreement to ensure that all tax, which should be paid, is paid." 

However, as I noted in July 2013, HMRC is pumping a dry well there:

"The trouble with the ongoing politicisation of tax (or rather the mechanisms involved in collecting tax) is that the politicians and media "professionals" involved in the spin are apt to "overspin" the issues and potential results etc.

Such appears to be the case with the "landmark" tax agreement between the UK and Switzerland, which Osborne heralded last year as:

"The largest tax evasion settlement in British history."

Fast forward to the present day and we see...cough... that it now looks set to raise much less revenue than expected, according to an update from the Swiss Bankers Association (SBA).

Osborne expected to raise £5BN over five years, of which £3.2BN of revenues expected this year have already been included in the government’s borrowing figures.

However, the SBA said in a report last week that it is possible that less than £900M would be directly transferred to the UK. The association said that first indications suggested there were fewer untaxed UK assets in Switzerland than had been previously assumed, largely because many clients have resident non-domiciled status."

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



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"

Regina v Vagina

Kudos to loyal reader Angela Nangle (ex HMRC member of staff), who has recently published a book "Regina v Vagina" which outlines HMRC's attempts to imprison her for tax evasion.

As per a review on this site:

"Regina v Vagina is an entertaining (if idiosyncratically written) book, which will probably leave you with a sense of exasperation at the idiocy of public servants who, in pursuit of an ill thought out political policy, think it’s a good idea to waste £250,000 pounds on dragging anyone through the criminal courts for the sake of just £7,000 of income tax. Somebody really should sit down with Angela and turn her book into a film script."

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



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 Is Infallible

My thanks to Paul Reeves (a loyal reader) who has directed me to case notes published on his site, concerning a five year dispute that one of his clients had with HMRC regarding tax credit overpayments amounting to £5K which HMRC wanted to be repaid immediately.

A satisfactory resolution (stage payments of the overpayment and restitution by HMRC of professional charges) was only found after the case was submitted to the Adjudicator's Office. During the protracted dispute Paul notes that HMRC stuck to the mantra that HMRC does not make mistakes:

"The Tax Credits Office refused at any time, until forced to admit this when the matter went to the Adjudicator’s Office, that they had, or indeed could have, made an error."

He goes on to note:

"Query everything and do not take “no” for an answer. 

Persistence pays!" 

However, he warns:

"Please be advised that when you have received a decision from the Adjudicator’s Office in your favour, if  HMRC do not act in accordance with that decision, there is not much that you can do except make a nuisance of yourself until they finally implement the decision, just to get rid of you."

Has anyone else experienced similar problems with HMRC?

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



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"

Patient Confidentiality Protected

Dr Kathleen Long (a locum GP working on Scotland’s west coast) has won an HMRC tribunal which ruled that HMRC could not access her business diary to investigate her tax affairs; ie patient confidentiality has been protected.

Dr Long, having self-reported an error in her 2010/11 tax returns for her private hypnotherapy business, was asked by HMRC to produce her business diary in support of her self-assessment tax return.

Dr Long argued that such a demand would infringe on her patients’ confidentiality rights. HMRC conducted an internal review of the case, and determined that Dr Long could not use patient confidentiality as a defence against handing over the diary. However, at the tribunal the judge found that the business diary was unnecessary in the investigation of her tax affairs.

As per Pulse Today, Judge J Gordon Reid found that:

"Dr Long has been cooperative in relation to HMRC’s enquiries.

The appeal is allowed. Dr Long does not have to produce her business appointments diaries to HMRC."

He cited a ruling from a European Court of Human Rights case from 1997 that found:

"Respecting the confidentiality of health data is a vital principle in the legal systems of all the Contracting Parties to the Convention. It is crucial not only to respect the sense of privacy of a patient but also to preserve his or her confidence in the medical profession and in the health services in general."

Baker Tilly tax partner Andrew Hubbard said:

"I suspect that even if it hadn’t been a doctor’s case the tribunal might have said that was a step too far, but the fact that it was a doctor and confidential information I think weighed the balance even more in favour the confidentiality [being protected].

While this ruling doesn’t say that under any circumstances a doctor’s diary is sacrosanct, I suppose you could say it is a win for reasonableness.

I suspect the message to doctors is that these paragraphs do exist and you don’t want to get into the position that she did. I suspect Dr Long is rubbing her wounds, but she took one to ensure her patients’ affairs remained confidential."

A spokesperson for the HMRC said:

"We are considering the judgement."

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



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"