HMRC's Debt Collection Tactics

Following on from yesterday's article about HMRC increasing its spend on debt collection agencies, a joint investigation by The Independent and the campaign group False Economy has identified that hundreds of thousands of Britain’s poorest people are being targeted by private debt collectors hired by HMRC after their tax credits were overpaid.

Why were their tax credits overpaid?

Seemingly because of errors made by HMRC.

The debt collectors hired by HMRC phone the people they are targeting on their mobiles, send them text messages and write to them at home. Some of those targeted say they feel harassed and frightened.

In at least 80 tax credit cases, assets have been seized directly. This rather contradicts the message being promulgated by the HMRC spin masters that the agencies cannot seize assets.

In total, HMRC made 215,144 referrals to debt collection agencies in 2013-14 to “secure direct recovery of overpaid personal tax credits”.

Please feel free to share your experiences of HMRC's debt collection tactics.

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 Increases Its Spend On Bailiffs

UHY Hacker Young reports that HMRC has doubled its use of private sector bailiffs and debt collection agencies over the last two years, indicating that it is taking a more aggressive approach to recover overdue tax.

UHY Hacker Young says that HMRC spent £14.8M in 2013 on the use of private sector debt collectors, this is an increase of 15% from £12.9M in 2012 and more than double the £6M spent in 2011.

Mark Giddens, Head of Private Client Services at UHY Hacker Young, is quoted by Director of Finance:

“Bailiffs do not have the best of reputations and many taxpayers are going to be very alarmed when a debt collector is brought in.
 
Most taxpayers who are behind with their payments are in that situation because they simply can’t afford to pay their tax – not because they intend to string HMRC along.”

The risk of bailiffs being used is increasing as HMRC winds down its "Time to Pay" scheme.

Mr Giddens also notes:

“There is the danger of mistakes in communication between HMRC and its agencies, with taxpayers being incorrectly chased for debts. Any errors that do arise would be far easier to rectify if the process was kept in-house.”

HMRC uses 13 companies to aid it in its debt recovery programme.

However, the "success" or otherwise of farming out debt collection to the private sector depends very much on the quality of the private sector firm used and the validity of the information they are given to work with.

It is also worthwhile remembering that once you have unleashed the hounds, it is sometimes rather difficult to rein them back in. Do not forget that if HMRC are given powers to raid bank accounts, this may well exacerbate the problems faced by taxpayers incorrectly targetted as a result of erroneous HMRC data.

Please feel free to share your experiences of HMRC's debt collection tactics.


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"

Low Hanging Fruit

A survey by Oxford University's Centre for Business Taxation has revealed that just over 25% of businesses feel it is harder to reach agreements with HMRC, due to strict adherence to internal guidelines.

The survey highlighted tensions between businesses and HMRC over internal guidelines for resolving arguments, aka the Litigation and Settlement Strategy (LSS).

Just over 25% of businesses said that, since 2007, it has been harder to settle disputes with HMRC.

Andrew McKenna, partner and head of tax investigations at Smith & Williamson, is of the view that the strategy seems to have hampered inspectors’ abilities to come to an agreement with businesses. He said there was also the possibility that larger businesses were handled by more experienced inspectors, which could affect the outcome.

Mr McKenna is quoted by economia:

“There does seem to be variation in how large and small businesses are treated. 

With smaller businesses, it could be down to the quality of the inspector, or it could just be the case itself.” 

The study also found that 36% of businesses believe the approach from HMRC has changed for the worse, with increased media exposure on the settlement process.

The media and political pressure on HMRC (from both PAC and others) has, according to some businesses, made HMRC less flexible.

The Treasury, unsurprisingly, deny this. As per a spokesperson:

“We adopt a level playing field in our dealings with customers and aim to resolve tax disputes through collaborative working, whatever their size. 

This is clearly laid out in the Litigation and Settlement Strategy, which all HMRC’s case workers follow.”

Given that larger companies have greater resources (time, personnel, money and legal expertise) I suspect that the "low hanging fruit" approach of squeezing SME's is very tempting to 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"

Record Breaking Tax Haul

The media are reporting that HMRC has raised a record £23.9BN in additional tax for the year to the end of March, as a result of a "crackdown on tax avoidance". 

HMRC state that the increased yield (almost £1BN higher that the Chancellor's target) is as a result of its investigations. Surely, if it has achieved this increase via investigations then not all of this relates to "avoidance" but must also relate to "evasion"?

Treasury minister David Gauke is quoted by the BBC:

"HMRC will pursue those seeking to avoid their responsibilities and will collect the taxes that are due.

The government is determined to tackle the minority that seek to avoid paying the taxes they owe."

Whilst the media and Gauke talk purely of "avoidance", HMRC note that £8BN came from large business, £1BN from criminals and £2.7BN from tackling avoidance schemes in courts.

Therefore part of this relates to evasion.

Anyhoo, that aside, HMRC has said it expects to secure £100BN between May 2010 and March 2015 as a result of its investigations into unpaid tax.

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"

49% of Automatic Late VAT Submission Fines Incorrect

It seems that HMRC is having a wee spot of bother wrt fining taxpayers for late VAT submissions, as in 2013 around 49% of appeals (8,000 cases) on automatic fines were successful.

UHY Hacker Young, which conducted the research into the incorrect fines, claimed that the computer based system used by HMRC was issuing fines for late submissions, regardless of circumstances.

Simon Newark, a partner at UHY Hacker Young, is quoted in economia noting that the onus on the taxpayer to prove his/her innocence does not go down well with the taxpayers:

“That’s perceived by taxpayers as being unfair, but unfortunately, that’s what the law says.

In a lot of borderline review cases HMRC is rubber-stamping the automatic penalty. 

Taxpayers should be allowed to explain their situation first before they are railroaded into a system of fines and penalties.”

However, HMRC is of the view that the system is “working well.”

An HMRC spokesperson said:

"Statutory penalties are sent out when a return or payment is late. Late receipt is a fact that triggers the penalty but of course we accept there can be valid reasons for being late and the taxpayer simply has to show they had a reasonable excuse for submitting late. 

If we accept the reason - and we do in 50% of cases - then there is no penalty to pay. 

This shows the system working well."

Wouldn't it save time and effort to check the reason for the late payment first, before automatically issuing fines?

Actually, no it wouldn't, because HMRC is aiming for maximum automation and minimum staffing levels.

Good luck to all if HMRC is allowed to raid bank accounts for unpaid tax!

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"

Number of Tax Investigations Almost Double

The number of people being investigated by HMRC has almost doubled in one year, raising concerns that people who have made innocent mistakes are being targeted by the Government.

HMRC made inquiries about the tax affairs of 237,215 people last year, compared with about 119,000 in 2011-12, figures obtained by The Daily Telegraph show.

Aside from those taxpayers who deliberately seek to evade tax, there are those who make genuine errors on their tax declarations. The tax system being so complex it is hardly surprising that people don't understand what to do.

That aside, one commentator on the Telegraph site has put together a few numbers:

"The numbers were bugging me so I did a bit of research. I was interested to determine how much each investigator would need to find, to eliminate the £35 billion tax gap. it turned out to be over £22 million per investigator per annum:

Amount of Uncollected Taxes (Telegraph) £35,000,000,000 Number of Inquiries (2011-12) 237,215
Number of Tax Investigators: 1,600
Lin Homer (Chief Executive at HMRC) her figures:
Total Collected by HMRC £474,000,000,000
% not collected (Telegraph - £35 Billion) 7.38%
Total Individuals 45,000,000
Total Businesses 4,800,000
Number of HMRC employees 70,000
Tax Avoidance (14% of total tax gap (the difference between the total revenues that we collect and the total amount of tax that is theoretically due) which currently stands at £32 billion) £5,000,000,000
Calculate 'tax gap' from £5 Billion and 14% £35,714,285,714
Average per Investigator (tax gap/no. of Inv.) £22,321,429
Number of working days per year 223
Tax/day/inspector £100,096
Average per Inquiry £150,557
Number of Tax Transactions per Year (Karen Mason Table; 2010-11) 34,329,740"

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"

FTA Redundancies

I understand that 2000 HMRC Fixed Term Appointment staff were given 90 days notice yesterday.


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"

Phil Pavitt To Leave Aviva

My thanks to a loyal reader who has written that Phil Pavitt (ex CIO of HMRC) will leave Aviva (a company he joined in January 2013) next month.

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"

Bollocks

Seemingly our tax system is bollocks.

Quite 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 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"

Over 100,000 Taxpayer Letters Unopened

A whistleblower, who is a long serving employee of HMRC, has told the Times that HMRC is functioning in crisis mode, with thousands of calls left unanswered and investigators cherry-picking the easiest cases.

The whistleblower claims that HMRC management have instructed staff not to get into long discussions with people contacting HMRC call centres, and not to ask additional questions. Some staff were given a maximum of five minutes to talk to each taxpayer, and just 90 seconds to update their records.

The whistleblower is quoted by economia:

"More than 100,000 taxpayer letters have been left unopened."

I dare say the plans for outsourcing letter handling will address this issue.

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"

Songs For HMRC Raiding Your Bank Account

Elaine Clark of CheapAccounting has made a list of ten songs for HMRC raiding people's bank accounts, eg "Take The Money and Run" by the Steve Miller Band.

Now that the media and politicians have finally woken up to the possible ramifications of this proposal, Cameron was forced to come out and try to defend it. His "rationale" being that taxes would have to go up if the powers were not granted.

I wonder if he can provide the exact amount of extra tax revenue that is expected to be raised, in the event that these powers are granted?

Meanwhile on Twitter:

HMRC owe me a tax refund, its on my statement, I've requested it several times over last 6 months. Can I now raid the Treasury bank account?
— Fiona Hotston Moore (@hotstonmoore) May 12, 2014

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"

Erroneous Bar Code Causes Tax Credit Cock Up

My thanks to a loyal reader who has alerted me to a possible problem with Working Tax Credits, and an erroneous bar code that may have caused HMRC to withdraw (by accident) claims for a number of Tax Credits on 28 April.

As per my loyal reader:

"I am currently having a battle with HMRC regarding a claim for Working Tax Credits. It appears that on 28th April HMRC 'accidentally' withdrew thousands (possibly tens of thousands) of Tax Credits claims due to a clerical error with the claim form (apparently an incorrect bar code was printed on the forms!). 

I would imagine that HMRC has suppressed this story to avoid embarrassment, however I have alerted Lin Homer, George Osborne, and several national newspapers, as I believe the story deserves to be told."

My loyal reader has given me permission to publish the text of the email that he has sent to Homer and Osborne today:

"Dear Sirs/Madam

I posted a claim form for Working Tax Credits at the beginning of April 2014. I understand from staff at the Tax Credits helpline that my claim has yet to be processed due to a ‘clerical error’ at their end. This clerical error being that a number of claims were incorrectly withdrawn because the claim forms had the wrong bar code on them! An excuse which wouldn’t look out of place in a script for Yes, Minister!

Due to HMRC’s reluctance to contact those claimants concerned (HMRC were aware of this error on 28th April, I had to find out for myself on 7th May), I have now spent several wasted hours either on hold to the Tax Credits helpline or trying to obtain fruitless updates on a claim that they had withdrawn!

When I called them on 6th May, I was told that the claim was ready to go into payment, and that I should keep checking my bank account for payments. However, when I telephoned for a further update on 7th May, I was then told that this wasn’t the case and was informed of their inexcusable (and laughable) error. I was also told that it may not be resolved until the end of May, which would mean two whole months between making the claim and payments being made. This is wholly unacceptable.

My complaint is that a government department such as HMRC should not be making these inexcusable errors in the first place, and should contact those claimants involved, and should be doing everything possible (and urgently) to put the errors right.

I have telephoned the Tax Credit helpline every day this week, and not one member of staff appears to have any idea of what the situation is, and cannot even tell me whether my claim has even been looked at! I have been promised several call backs, and as yet, have not received one.

There appears to be no urgency whatsoever on HMRC’s part to correct these issues. I have made a formal complaint to them, and I hope that your input would help.

I am sure that I am not the only person to be affected by this issue, and as a result, I have copied in several national newspapers, as I believe that this issue deserves to be brought to the attention of the public (many of whom will be affected but will have no idea due to the apparent suppression of this serious incident)."

Has anyone else encountered this problem?

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 People Awake

I am glad to see that people are finally waking up to the demented proposal to give HMRC the power to raid people's bank accounts in order to collect unpaid tax.

Rebecca Benneyworth (Chair of the ICAEW Tax Faculty) has tweeted that the tax faculty will be holding an event to discuss this on 2 July, in time to formulate responses to consultation.

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"

Spam Phishing

Yesterday I received an avalanche (well six actually) of spam emails purportedly from HMRC telling me that I have paid too much tax in the past, and inviting me to complete an attached from to reclaim the money.

Suffice to say that these emails are rather pathetic attempts to phish for my bank details and other personal information. They do not even use my name in the body of the mail.

HMRC do not communicate with taxpayers in this manner. In the event that you receive any such email, do not open the form and do not respond to it.

Here is one of the six that I received yesterday, they are all identical:

---

Dear ,
We have detected that you have paid too much tax in the past, due to an official error.
Therefore HMRC applied ESC B41 to issue a repayment for tax years which are now
out of date under the strict statute.

Please completely fill out the form above. Accurate information is necessary so that we
may process your request faster.

---

2014 © Crown Copyright (Personal and Corporate Tax Refund Center PCTRC) All rights reserved.
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"

Few Understand Tax

 

HMRC published the results of a survey "PAYE Online: PAYE and NI in a digital age" on 1 May (although the report states March), which noted that employees are not engaged enough with their personal tax affairs.

Seemingly "few fully understand how their tax is calculated".

That should not come as a surprise to anyone!

The report notes that people (the word "customer" is used liberally throughout) do not generally recognise their role in managing their own tax, and feel it is some other party’s responsibility even when they have faced a problem.

HMRC concluded that online accounts have the potential to make a positive change, helping to create transparency in the personal tax system and encourage employees take responsibility for their own affairs.

Maybe so, only if the online accounts are accurate and easy to use; oh and only if all taxpayers have access to the internet.

 Here is a summary of the key findings:

1. Individual knowledge of how tax works is limited. Whilst there is basic knowledge, few fully understand how their tax is calculated, what would make it change and how it would change.

2. Individuals are not engaged with their personal tax. Because tax is deducted at source, those paying PAYE typically see it as something dealt with by their employer or pension provider and, as a result, do not feel any need to engage with it. It is something that happens ‘ to them’ .

3. PAYE taxpayers do not generally recognise their role and responsibilities in managing their tax. Even when they have faced a problem or issue with their tax, they felt it was someone else’s responsibility to manage it (e .g. HMRC, employer or pension provider).

4. Individuals do not feel equipped to deal with issues concerning their tax. They are confused by having responsibility for something t hey are not directly involved in and do not fully understand. This is heightened by unfamiliarity with the system and feeling overwhelmed when/if they do engage.

5. The concept of an online tax account is appealing. Individuals would welcome the reassurance that easy access to this information would bring and see online as being the natural platform for this.

6. Individuals have a clear idea of what they want from an on line tax account, particularly: education about their tax and how tax works, a facility to check their details, and the opportunity to interact with HMRC digitally.

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"

Tax Credit Renewal Deadline

People receiving tax credits may expect to receive an annual renewal pack anytime between now and June 28.

HMRC do not send them all out at once, so different people will get them at different times. However, it is very important to respond to the renewal pack before the July 31 deadline.

The pack may include an annual declaration form and an annual review notice. Those who receive both they must reply by the deadline even if they don’t want to claim tax credits again, because the renewal process is also a check that a person has received the right amount for the previous year.

Those who fail to meet the deadline will find that their tax credit payments will stop, and money may have to be paid back to HMRC.

The tax credit helpline is 0345 300 3900.

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"

Debt Query Line Opened

This week HMRC opened a new dedicated phone line for tax advisers wanting to deal with enforcement/compliance, debt management and banking issues.

The Enforcement & Compliance, Debt Management & Banking (DMB) Agent Dedicated Line contact number is 0300 200 3887.

The line is intended solely for professional advisers to get priority responses from the tax department.

It is open 8am-8pm on weekdays. Self Assessment and Tax Credit queries lines are also open 8 am to 4 pm, Saturday and Sunday.

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.

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Paul Aplin Sounds Warning Bells

Paul Aplin, tax partner with A C Mole & Sons and Chairman of the ICAEW Tax Faculty Technical Committee, has written a blog on economia warning about the new powers being proposed for HMRC wrt offshore accounts and accessing debts from people's bank accounts.

Here is his article as it appears on the economia site:

"My first inclination was not to write about this subject because others have written about it recently for economia. Having just read the Hansard report of the first day’s Finance Bill Committee proceedings however I changed my mind.

My subject is two proposed new powers for HMRC. Neither is contained in the 2014 Finance Bill but both are scheduled for the 2015 Finance Bill. There is, therefore, still time to do something about them.

The first power

The first proposed power would enable HMRC to collect tax debts direct from people’s bank accounts where the debt is established and where HMRC has taken steps to recover it but the taxpayer has still failed to pay. Some 53 pages into the Budget Red Book those of us who spend our time reading the small print in such documents found the following statement:

“The government will modernise and strengthen HMRC’s debt collection powers to recover financial assets from the bank accounts of debtors who owe over £1,000 of tax or tax credit debts, have the financial means to pay, and have been contacted multiple times by HMRC to pay. A minimum of £5,000 will be left across debtors’ accounts. This brings the UK in line with many other tax authorities which already have the power to recover debts directly from an individual’s account, such as France and the US.”

This rang some pretty loud warning bells for me, not because I don’t want HMRC to collect tax that is due, but because I fear the potential for serious errors or mistakes.

A couple of years ago I received a letter at home threatening a visit to mark my goods for auction as I had ignored correspondence about a tax debt. I did not actually have a tax debt ( the fact that no figure for tax was shown on the threatening letter was something that might have given the person who sent the letter pause for thought but clearly didn’t). Fortunately I knew what to do next because of the job I do, but what if I hadn’t?

The week after the Budget announcement was made one of my clients was threatened with a visit to collect a PAYE debt that had been paid weeks earlier and another client was called (he said the tone of the call was pretty stern) about a VAT debt that had also been paid. Both clients have an excellent history of paying their tax on time.

This week a client received a “most people pay their taxes on time so why haven’t you?” letter requesting payment of tax shown as due on an HMRC self-assessment amendment. The amendment was dated 10 April and the chasing letter was dated 16 April.

All of these were administrative errors. All had explanations. All caused irritation, wasted time and unnecessary worry. I suspect most practitioners reading this will have had similar experiences.

And that is why I am worried about the proposed new power. I think HMRC should be as well, because it will only take one or two cases of this going wrong to create some very bad headlines.

The measure is up for consultation and the best outcome would be for it to be dropped. No-one should have access to a citizen’s bank account without the sanction or oversight of the court.

The second power

The second proposal is for there to be a presumption that someone who has undeclared taxable offshore income has failed to declare it deliberately. They should therefore be presumed guilty unless and until proved innocent. I do not defend deliberate failure to disclose offshore taxable income: those who deliberately fail to declare taxable income should be dealt with robustly. Tax evasion is a crime. This reversal of the usual presumption of innocence however is an extremely alarming proposal.

I am concerned that a fundamental principle of law is being turned on its head. I am also concerned about the potential for perfectly innocent situations to lead to utterly ghastly consequences.

Again this measure will be consulted on and again I hope that it will be re-thought.

The role of Parliament

During the summer both proposals will, as I have said, be consulted on. It is important that ICAEW and others make our voices heard during that consultation.

There is then a further stage in the process. Legislation has to be drafted and to find its way into a Finance Bill in 2015 (I say “a” Finance Bill as 2015 being an election year there will be more than one). That means there must be debate about the proposed powers in Parliament. I hope that there will be because what we are talking about here is the balance between the powers of the state and the rights of the citizen. It is about civil liberties. These are things I would hope MPs would be keen to debate.
I worry about this on two counts.

The first is that on reading the first day’s Finance Bill Committee proceedings this week my overriding impression was that there was far too much focus on making party political points about the economy and the tax system and far too little focus on the technical detail. The technical detail of the proposed new HMRC powers will need careful, informed scrutiny and robust debate by our elected representatives.

The second is that these proposals need to be seen for what they are: new powers which – if they are to be introduced at all - must be balanced by very strong safeguards. Those safeguards must be in law, not in guidance. It would be too easy for politicians to take a superficial view that as the powers are aimed at those who do not keep their tax affairs in order HMRC must be granted them.

The debate needs to be about the core issue: the power of the state and the rights of the citizen. It will take place in 2015, the 800th anniversary of the signing of Magna Carta. Hopefully that will focus minds on the importance of taking only necessary powers and of respecting the rights of the citizen."

Tax does have to be taxing.

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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"