Unsurprisingly HMRC have received another drubbing, this time from PAC.
In a report issued by PAC, PAC chairwoman Meg Hillier said HMRC's claims about its success "just don't stack up".
Well then, finally people other than the readers of this site are waking up to reality!
Of particular concern to PAC is HMRC's "one rule for the rich, another for the poor" approach to tax collection and enforcement.
Amusingly, HMRC claim that the rich get extra scrutiny; as some loyal readers have already pointed out, "extra scrutiny" appears to mean power lunches/dinners with HMRC top brass.
In an "ironic" twist, since HMRC set up a specialist unit dealing with so-called high net worth individuals in 2009, the amount of income tax they paid had fallen by £1bn. This is despite income tax receipts from the public as a whole rising by £23bn over the same period.
Since 2009, each of the estimated 6,500 individuals worth £20m or more has been assigned a "customer relationship manager" by HMRC to administer their tax affairs.
HMRC said this had resulted in the collection of an additional £2bn in tax. However, it was unable to explain why the income tax they paid fell by 20% - from £4.5bn in 2009-10 to £3.5bn in 2014-15 - when the overall income tax take rose by 9% £23bn.
The BBC reports that in the five years to 31 March 2016, HMRC completed just 72 fraud investigations into high net worth individuals, with all but two having been dealt with using its civil powers. Only one case resulted in a successful criminal prosecution.
Of the 850 penalties issued to the very wealthy since 2012, the average charge was £10,500, a figure the MPs said was unlikely to be a deterrent to multi-millionaires.
PAC chairwoman Meg Hillier said:
"If the public are to have faith in the tax system then it must be seen to have fairness at its heart. It also needs to work properly. In our view, HMRC is failing on both counts.An HMRC spokesman said:
HMRC's claims about the success of its strategy to deal with the very wealthy just don't stack up."
"In fact we give them additional scrutiny, with one-to-one marking by HMRC's specialist tax collectors, to ensure that they pay everything they owe, just like the rest of us do.""Marking" should not mean power lunches/dinners!
As ever though, low hanging fruit is the easiest to pick. Therefore HMRC will continue to bully SME's and individuals of modest means, and increase the number/frequency of automatic fines for minor cock ups on tax returns.
Tax does have to be taxing.
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Scathing criticism from the PAC. But are HMRC going to listen, or carry on regardless? Well, the HMRC spokesman's comments would be laughable were it not for the total unfairness of it all on the average taxpayer and the impact on funding for vital public services. All those well paid people in the HMRC Communications Department remind me of the "Ministry of Truth" in 1984, producing 'fake news' as they say nowadays?
ReplyDeleteInteresting that HMRC say the "marking" is done by "tax collectors". Totally untrue, which is why its been misreported in some parts of the media. HMRC normally use the term "tax collectors" to refer to staff actually collecting overdue debt. This would be lower grade staff such as field force tax collectors. These are the dedicated hard working frontline people who are often verbally abused, and sometimes assaulted, in the course of their work with little thanks from their ungrateful senior management.
ReplyDeleteThe "marking" of the rich is done by "customer relationship managers" meaning tax inspectors of a very senior grade (probably Grade 6). Their work, in contrast to tax collectors, is likely to include eating prawn sandwiches washed down with some port in the company of the super rich, all for the benefit of ensuring a steady flow of money to the exchequer of course!
Customer relationship managers enjoy a chummy relationship with their clients and they really do not like the lower level oiks interfering and asking emabarrasing questions. It's all too cosy.
ReplyDeleteAbsolute rubbish from my experience!
DeleteAbsolutely spot on from what I read. A greater focus on the relationship than on cash to bank. If they are 'marking' them then how is tax avoidance happening right under their noses. Its a timid approach; they need to toughen up a bit.
DeleteFrom what you read... Says it all. The main focus is on making sure people pay the right amount. Tax avoidance is marketed for the greedy, whereby the promotor engineers a often highly contrived set on circumstances to force a fit with legislation designed to give tax relief in certain genuine scenarios. Hence tax avoidance is not strictly illegal and hence why HMRC tackle it through a Tribunal/court process. How do you propose they tackle greed?
Delete"From what I read" = from high quality journalistic pieces, not the word of HMRC staff or their 'ministry of truth'. You can't tackle greed per se but HMRC must focus on enforcing the law in an even handed fair manner. Some people are greedy, simple as, its all around us unfortunately, dare I say some hollier than thou HMRC senior management may not even be immune to it when they took 'bonuses' while the country is in austerity and the ordinary junior civil servants had years of pay freezes? HMRC's decision to made redundant, at a great public cost, thousands of skilled & experienced staff says it all. Hardly a clever decision for tackling contrived avoidance schemes with even the Chief Executive now admitting there are risks to loss of "corporate memory"!
DeleteThe Higher management are like the High value pieces on a chess board hiding behind the ( 200+)corporate communication pawns who defend them by spweing out endless "alternative facts" about dubious successes and questionable yield figures.
ReplyDeleteAre you saying the 'yield' figures are estimated, or worse, made up? Do the National Audit Office know about this, as I would imagine it would alter an assessment of their performance.
DeleteWhy have HMRC got 200+ communication pawns, can't the combined talents of those at the top, their secretaries and bag carriers (diary keepers), press officers and that army of disposable fast trackers communicate effectively without them?
DeleteWe live in a digital age, don't we, why the need for so many non productive salary 'earners'?
As for figures, we all know about the "revenue protected" dodge...
Stop faffing about HMRC management and get back to basics, you know it makes sense!
I think its time for a FOI request about the number of hmrc's 'communication' wage collectors and exactly what their role is?
DeleteAs a taxpayer, and an outsider to the great mess which is HMRC, to see so many highly paid staff in non-productive roles is quite outrageous. The above makes a great point that you would think senior management etc could communicate effectively without them. Without doubt the number is excessively high. A team of more than say 15 dealing with the media would just make me wonder what they are up to - are they communicating the 'corporate' message or manipulating the facts (i.e. spin/alternative facts/propaganda etc)?? How would we know?? Apparently there's going to be an inquiry into 'fake news' and my recommendation would be to include the media/communications depts of the civil service within its scope. Sometimes the MSM, particularly the hard-pressed and under-resourced outlets, regurgitate the press statements they gets as 'fact'. Lets us be reassured that public institutions like hmrc are not undermining trust and democracy themselves!
Just to add some balance, in my direct recent experience Customer Relationship Managers do NOT have 'cosy' relationship with the wealthy. They want them to pay the right amount of tax, no more, no less. Generally communications between parties are respectful and professional, nothing more. The overall tax take from the rich is likely to do with Tory reductions to the highest tax rates, it has nothing to do with the will or behaviour of HMRC staff!
ReplyDeleteOh really. The Government make the tax law through Parliament, correct? HMRC, who are operationally independent and want it to stay that way as they appear to resist any change to their governance structure, enforce the law and collect the money as I understand. The report from the PAC - members from various parties i.e. not all Tories - was scathing of HMRC. No cosy relationship? The video on YouTube of Mr Hartnett making his retirement speech at an elite tax avoidance conference is very interesting. What did HMRC officials think of that?
Delete27/1 @ 13:25 HMRC senior management don't do any favours for the reputation of the majority of the decent, hard working staff with a public service ethic, when they allow law breaking/crime by certain staff to be covered up with taxpayer funded resources when it suits them. Its corrupt and they should be prosecuted for misconduct in public office.
DeleteI watched the video of Hmrc's Dave Hartnett. I think it brings them into disrepute. Note the part where one of his colleagues at the bash says "you are trespassing scum, go!". Do HMRC condone such behaviour?
DeleteThe tax take from the high net worth individuals collected by HMRC seems to have dropped a lot more than the reduction of the higher income tax rate under George Osborne if the figures in the article are to be believed.
DeleteIt's a great piece of film, and the protest was just and well founded. Loved the way lots of attendees (HMRC and non-HMRC) were all singing along with such gusto. As for the utterer of the word "scum", was he security or a Hartnet HMRC toady?
ReplyDeleteI would imagine the 'gentleman' using the word "scum" and threatening to set the "dogs" on the protesters must have been event security. HMRC wouldn't be associated with such a thug whose behaviour bordered on being a section 5 public order act offence.
Delete