RIP HMRC Enquiry Centres

The last of HMRC's 281 enquiry centres have closed their doors.

Taxpayers will now have to rely on call centres and personal visits from HMRC staff to help them with their tax queries.

Anthony Thomas, chairman of the Low Income Tax Reform Group is quoted by the FT:

“Most people will access help through the normal telephone lines and it is very important that the performance of those lines is at the top of HMRC’s planning.”

Most HMRC phone lines are open from 8am until 8pm on weekdays, and until 4pm on Saturday.

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 Loopholes

The House of Commons Public Accounts Committee (PAC) has criticised Britain's 1,128 tax reliefs.

For why?

In PAC's view they are a £100BN recipe for abuse, avoidance and evasion.

PAC notes that government departments are struggling to cope with the growing demands of managing the ballooning number of them.

One relief, highlighted by Margaret Hodge, is late-night taxi relief which exempts employees who are supplied with them from facing income tax charges for "benefits in kind".

Ms Hodge said that rather than helping shift workers it had ended up benefiting the often expansively paid employees of big law and accountancy firms. This, she said (according to The Independent), made it "hard to justify".

Ms Hodge said:

"Much more radical simplification of the tax system is required if we are to get to grips with aggressive tax avoidance.

If the Government chooses to spend £100bn on tax reliefs, at a time of austerity, this expenditure should be considered in the same way as spending programmes. Many tax reliefs are introduced without clear objectives and are not evaluated as fully."

I agree that the tax system needs to be simplified, I am sure that taxpayers (both staff of HMRC and those not employed by HMRC) would agree on that point.

However, the legislation is passed by our "respected" MPs who are now criticising the system that they created.

Maybe PAC and others who criticise the system would care to remember that it is they who created it in the first place!

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"

Rolling Strikes Roll On

The series of rolling HMRC strikes continues.

Yesterday HMRC staff in London, the South East and the South West walked out in protest at the cuts to headcount, the closure of enquiry centres and staff appraisal issues etc.

PCS is quoted by economia:

“Years of successive job cuts have left the organisation unable to cope, with delays on telephone lines continuing, huge backlogs of post and private debt collectors being brought in to chase up tax credits overpayments.” 

Paul Tillyer, branch secretary in Bradford, which staged walkouts on Tuesday said:

"Members and non-members decided to go home. 90% of PCS members, across all business streams, have stayed away from work today signalling to Lin Homer and Excom that they do not agree with HMRC’s vision of the future. Members have done themselves proud." 

PCS general secretary Mark Serwotka said:

"HMRC plays an essential role in our economy and our society, collecting the taxes that fund the other public services we all rely on. But it is being systematically undermined by unnecessary and politically-motivated cuts.” 

Well that's the official view from PCS.

However, I would like to hear from those in HMRC and those who use HMRC; are these strikes having any discernible impact on service levels/working conditions etc?

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"

Hypocrisy

For reasons best known to himself, Charlie Elphicke MP has called for accountants who promote aggressive tax avoidance schemes to face criminal prosecution.

Elphicke, a former tax lawyer, has said (according to AccountingWeb) that he has tabled a series of amendments to the Finance Bill that would make it illegal to help clients to invest in schemes designed to avoid tax.

Elphicke said he wanted to start a discussion about the morality of tax avoidance.

As at the time of writing evasion is illegal, but avoidance isn't. A former tax lawyer calling for the prosecution of those who promote avoidance schemes seems a tad hypocritical to me.

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"

PAYE Late Filing Penalties

HMRC have published a helpsheet about the new late filing penalty regime that will commence from 6 October 2014.

Late filing penalties will apply:

Where a Full Payment Submission (FPS) has not been filed on or before the date an employer paid their employees, or where the employer has not told HMRC why their submission is legitimately late by using the late reporting reason field.

Where HMRC does not receive the expected number of submissions from the employer, (eg HMRC knows the employer is paying employees, but the employer has failed completely to send any FPS for a tax month, or a ‘nil’ EPS for that tax month).

The penalties for late filing range from £100 to £400 per month, depending on the number of employees. The helpsheet can be viewed via this link HMRC Late Penalty Helpsheet.

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 Errors - 5.5 Million Paid The Wrong Amount of Tax

Despite the introduction of RTI, the system that is meant to have done away with many reconciliation "errors" wrt PAYE, a large number of reconciliation "errors" (arising from changes in financial circumstances being picked up at the end of the tax year) are still occurring.

HMRC will be writing to approximately 5.5 million taxpayers to inform them that they paid the wrong amount of tax in 2013/14. It is estimated that of the 5.5 million, around 3.5 million have underpaid their tax.

The average over/underpayment is estimated to be around £300. Those who underpaid will be able to repay via PAYE in the coming year.

Whilst RTI is still bedding in, it is not unreasonable that there will still be reconciliation "errors". However, it is "ironic" that the 5.5 million figure for 2013/14 is higher than the 5.2 million in the previous year.

David Heaton of Baker Tilly, is quoted by the Telegraph:

“RTI was supposed to make PAYE more accurate, not less. So why are there more [errors] this year, with RTI in full flow, than last year, when RTI was only a pilot? The number of PAYE differences has risen, not fallen. 

Something in RTI is not working.”

Kate Upton, a payroll consultant, said:

“Taxpayers have spent hundreds of millions on RTI and employers have had to spend hundreds of millions to use the new system, so we are entitled to expect significantly fewer errors in the reconciliation process.”

HMRC said that the increase in "corrections" (HMRC doesn't use the word "error") was largely down to an increase in the number of people in employment that has come with the recovering economy.

A spokesman said that the effects of RTI had not been reflected yet, and it would eventually lead to a reduction in the number of corrections.

I would be interested to hear from people about their experiences of RTI, and whether it is working to their satisfaction.

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"

Rolling Strikes

There will be five days of rolling strikes in HMRC next week.

HMRC workers in Scotland and north-east England will strike on Monday, Yorkshire and Humberside, and eastern England (Tuesday), London, the south east, and south-west England (Wednesday), Midlands and Northern Ireland (Thursday) and north-west England and Wales (Friday).

The strikes are in protest against job cuts and the decision to close walk in enquiry centres.

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"

Beware Retrospective Tax Legislation

As per The Law Society Gazette:

"A ‘disturbing pattern’ is emerging where legislation is introduced with ‘minimal or ineffective’ consultation.

Concerns are raised that tax policymakers are ‘insufficiently conscious’ of the importance of the rule of law and over-reliant on guidance. The current government, it adds, has legislated retrospectively against certain types of stamp duty land tax avoidance schemes even though they had been known to HMRC for some time.

‘We do not consider that this is acceptable. Businesses must know that the law in place when transactions take place will be the law that applies to them’.

‘This principle is either absolute or it is nothing – once it has been broken once, further breaches are only questions of degree,‘ the committee says.“

The government is ignoring the rule of law, you have been warned!

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 £25 Apology Payment

The Guardian has printed a letter it received from a reader concerning HMRC hounding the reader for £214 in tax that had already been paid. HMRC went on to threaten to pass the debt on to a debt collection agency.

The reader wrote:

"I did a small amount of private tutoring to top up my income, and duly filed my self-assessment tax return in December for the 2012-13 tax year. I owed £214 and elected to pay via the PAYE system.

In March I received a letter saying I did not earn enough to do this (not true, but my income is split between three employers) and had to pay the full amount by 12 April. I was annoyed about this but made a payment via bank transfer. 

About three weeks later I received the first letter from HM Revenue & Customs saying that, according to its records, I hadn't paid. I ignored this as I just assumed there was a delay in my payment being recorded. A month later, however, when I received a second letter, I checked my online account with HMRC. There was no record of my payment, so I phoned giving my bank details and date of payment.

Now I have received another, more threatening, letter. In that, HMRC states it has repeatedly tried to contact me, but its records still show I owe the tax. It goes on to say it can now arrange for the debt to be passed on to a debt collection agency. 

Please help!  

AB, Sheffield, South Yorkshire"

The Guardian prodded HMRC into investigating the matter and it transpired that the unique tax reference number was incorrect, hence the payment would have been misallocated.

HMRC went on to admit that it should have been able to resolve the matter more quickly, and has agree to send £25 by way of apology.

It is good that the problem has been resolved, it is regrettable that it required a national newspaper to prod HMRC to sort it out.

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"

Corporation Tax Refund Delays

Figures obtained by UHY Hacker Young show that HMRC paid out £4.6BN to businesses in refunds for corporation tax last year. However, there appear to be delays in making these payments.

Approximately 286,000 businesses received a corporation tax rebate in the year to 31 March 2013, equivalent to an average refund in overpaid tax of more than £16,000 each. The norm for repayments to be received is around 2 to 3 months. However, some can take between 12 to 24 months.

Roy Maugham, tax partner at UHY Hacker Young, is quoted by Accountancy Live:

"UK businesses are still finding that they are overpaying their corporation tax in the billions of pounds. It shows how important it is for companies to regularly review any overpayment of tax as HMRC will not be looking to see if it owes them money."

Referring to the delays, he said:

"This can make the burden for companies struggling with unexpected losses or lower than anticipated revenues even heavier. It’s not unheard of for some to simply fold under the pressure in the meantime, as cashflow dries up.

Given that the number of rebates has been falling in the last few years, HMRC should be getting quicker but this doesn’t seem to be happening in reality."

I would be interested to hear from people about their experiences of obtaining a refund of overpaid corporation 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"

Service Matters

My thanks to loyal readers for posting an interesting and civil series of comments on the open thread (the serial spammer has been dealt with).

I see one of the news issues raised related to HMRC service standards.

Economia reported that the ICAEW Tax Faculty has told David Gauke that service levels are still not at an acceptable level, and that members aren't too chuffed about HMRC chasing incorrect RTI liabilities and the proposed new power to collect tax debts direct from bank accounts.

Performance statistics for the quarter ended 31 December 2013 showed that HMRC's overall telephone call performance over the period had fallen by 5.4% when compared with the same quarter in 2012.

Although the number of telephone calls to HMRC contact centres handled within five minutes over the period was up by 24.2% when compared with Q3 2013, this still meant a success rate of just 66.6%.

The Faculty has asked HMRC to increase the number of front line staff deployed to answering phone calls at peak times of the year, so that calls can be answered more efficiently.

It would also like to see better training across the board, so that staff answering calls are able to deal with issues more effectively.

These requests are all very well. However, given the ongoing restructuring in HMRC, the squeeze on budgets and moves to towards more automation these requests will I fear fall upon deaf ears.

It seems that the introduction in November last year of HMRC’s intelligent telephony automation (ITA) system, which includes speech automated security to identify callers’ identities, has also caused some irritation.

For why?

Seemingly the system fails to recognise key words such as “trusts” and “Intrastat”.

As per the ICAEW quoted by economia:

“Our members expressed frustration that when the ITA failed to recognise key words to connect them to an adviser, they hung up, redialled and tried again using different key words. This increases the user’s overall call time, costs and dissatisfaction.”

Thus the ICAEW recommends a return to the old system of pressing a number on the phone to find the right part of the menu.


All in all the concerns about call handling, RTI and PAYE issues have given the ICAEW less than stellar confidence in granting HMRC powers to raid bank accounts.

Let us see how that pans out!

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"

Open Thread

I will not have access to Blogger for the coming week folks, so please feel free to use this as an open thread to talk about and debate HMRC related issues/concerns (in a polite and civilised fashion).


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's Swiss Miss

HMRC has sent out letters to UK holders of Swiss bank accounts warning that they must settle their liabilities, and giving them the option of using the Liechtenstein Disclosure Facility.

However, John Cassidy, tax investigations partner at Crowe Clark Whitehill, says that these letters are written in exactly the same way as the 6,500 letters sent to this target group of individuals last September.

Whilst this is all very well to use the same wording etc, Mr Cassidy notes that some of his clients (who had received this letter) had already signed the LDF agreement and therefore did not need to be notified by HMRC in this way.

A spokesman for HMRC is quoted by International Adviser as confirming that the letters were sent out “as part of an agreement between the UK and Switzerland, which came into force on 1 January 2013. HMRC is engaging with all UK taxpayers who have agreed to details of their investments and accounts in Switzerland being shared with the UK by the Swiss tax authorities, under this agreement.”

However, waste of effort aside, I have to say I am reassured and pleased to see that the word "taxpayers" has crept back in to the HMRC lexicon.

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's Bully Boy Tactics

HMRC has gone on yet another one of its fishing expeditions, this time it has sent letters to a computer selected sample of taxpayers asking them to explain why their “effective rate of tax” is lower than the national average.

Baker Tilly has accused HMRC of adopting a “scatter gun approach” by sending blanket letters to taxpayers who have not done anything wrong.

Mike Down, of Baker Tilly, is quoted by the Telegraph:

“Examples we have seen include an elderly widow who pays more than half of her income to charity thus attracting relief under the Gift Aid regime.”

Thus, had HMRC checked the self assessment form first, HMRC would have realised that was the reason for the variance in the widow's tax liability.

Mr Down added:

“The Revenue is adopting a computer says yes approach, rather than simply checking the tax returns.

These bully boy tactics do not help anyone, instead they just scare innocent taxpayers.”

The letters state:

“Looking at the figures in your self assessment tax calculation for the tax year ended, we can see that your effective tax rate is lower than average for people with a similar amount of income to you. This could mean that there is something wrong with your tax return....
....paying the right amount of tax is important as it helps pay for the public services that we all rely on". 

HMRC have denied that the letters are being send out widely, estimating that 1,000 letters have been sent out to date.

“We want to understand whether this approach will help individuals complete their self assessment returns correctly.

We are issuing 1,000 letters to customers with an income of £150,000 or more who have an effective rate of tax of 22pc or less. If a customer is content that their return is accurate then they do not need to do anything."

I assume that Google, Amazon, Starbucks and others will also be receiving a similar type of letter?


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"