Friday 28 May 2021

HMRC's Charter is Broken


 

Loyal readers will recall that HMRC's Charter has been mentioned a few times over the years on this site.

Unsurprisingly, there is quite a gap between its intentions and HMRC's actual performance.

The ICAEW notes that HMRC has struggled to maintain business-as-usual service levels during the coronavirus pandemic and cannot improve services as envisaged in its Charter without more resource.

After gathering feedback from ICAEW members, the Tax Faculty has written to HMRC’s Charter Stakeholder Group outlining concerns about how HMRC performed against its Charter during 2020/21.

Published in November 2020, the Charter outlines what taxpayers can expect when interacting with HMRC. It includes standards of behaviour and values, such as getting things right, making things easy and being responsive.

In ICAEW Rep 43/21, ICAEW acknowledges that HMRC deserves commendation for its work in delivering COVID-19 financial support schemes, but concludes that this has come at the expense of its standard work with the day-to-day experience of taxpayers and agents continuing to deteriorate.

It concludes: 

HMRC’s performance against the standards in the Charter reflects the limited resources available to it, with the result that it has struggled to provide a satisfactory level of operational business-as-usual performance let alone update its systems to improve online services for taxpayers and agents.

The government has provided some funding, but substantial improvement is likely to take the 10 years envisaged in the tax administration strategy.

ICAEW warns that poor systems and inadequate training mean that HMRC’s staff are not able to deliver the commitment to “get things right” in the Charter. It highlights data processing in PAYE real time information, self assessment calculations and out of date tax codes as examples of long-standing issues caused by HMRC systems.

Furthermore, the faculty argues: 

“HMRC has considerably more work to do to live up to the Charter standard to make things easy, in particular in relation to online services.”

It cites the trust registration service and the online portal for reporting capital gains, as examples of new services that have not only failed to make tax administration any easier, but actually introduced “many additional problems”.

In examining HMRC’s responsiveness, ICAEW argues that HMRC needs to focus on returning services to pre-pandemic levels. 

“Taxpayers need a commitment from HMRC about when service levels (and helpline hours) will return to target standards, and in particular when priority access might be restored to the agent dedicated line.”

While it struggled to maintain service levels during 2020/21, ICAEW confirms that HMRC has generally been able to meet its commitments to treat taxpayers fairly and with respect, being aware of taxpayers’ personal situations (particularly the impact of COVID-19) and keeping data secure.

On its commitment to recognise that taxpayers can be represented by another, ICAEW concludes that while this is often met, there are: “…instances where gaps in online services for agents and cumbersome agent authorisation processes mean that, in practice, it is often made very difficult to be represented by a third party.

ICAEW’s response will inform the Charter Stakeholder Group’s evaluation of the extent to which HMRC has demonstrated the standards of behaviour and values in its Charter. The group’s conclusions will be published in an Annual Report later in 2021.

The ACCA also wades in, Glenn Collins (Head of ACCA Technical Advisory)stated:

A lack of necessary investment risks has damaged the relationship HMRC has with compliant taxpayers and agents.

The people who end up holding the cost and inconvenience are taxpayers and accountants. The cost is being pushed down to those who are causing the least problems for HMRC. You simply have to look at the delays in VAT registration for new businesses, who are looking to pay VAT to the exchequer but can’t get registered.”

These criticisms and suggestions are all very well, but HMRC is not going to fix them anytime soon. In the meantime taxpayers and their agents are screwed, as HMRC has basically ground to juddering halt!


Tax does have to be taxing.

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Monday 24 May 2021

John Andrews Nails It!



Tax does have to be taxing.

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  • Appeal to the First-tier Tribunal or Upper Tribunal
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Friday 21 May 2021

ICAEW Gives HMRC a Well Deserved Kicking

 

ICAEW members are reporting that poor performance is being experienced across almost all HMRC services and ICAEW has been pressing for greater transparency about the problems being experienced and for a clear recovery plan. The Tax Faculty outlines the problems that have been raised and the action it has taken.

Over the past 12 months ICAEW members have reported numerous service issues and delays across a range of HMRC services.

  • The main concern of members in practice is the withdrawal of priority access from the agent dedicated line (ADL). There are long wait times and reduced hours on other helplines and significant delays in processing registrations and repayment claims. ICAEW members have reported call waiting times of 40 mins to an hour on HMRC’s helplines and calls being cut off.
  • Other examples quoted by ICAEW members include taxpayers still waiting up to three months for Unique Taxpayer References (UTRs) to be issued for self assessment registrations, five months for VAT registrations to be completed, up to six months for research and development relief claims to be processed and more than six months for carry back of corporation tax losses to be actioned.

The current service levels not only increase the burdens and costs for taxpayers and HMRC but, as the UK moves out of the pandemic, could damage the recovery due to inhibiting new businesses from starting up and stifling the growth of existing businesses.

Throughout the pandemic, ICAEW has acknowledged the pressure on HMRC’s resources and its considerable achievements in delivering COVID-19 related support. HMRC acknowledges the poor service performance and attributes it to having had to reallocate staff to work on the COVID-19 support schemes and an unexpectedly high level of staff absence due to the pandemic, as well as EU exit work.

ICAEW appreciates the problems that HMRC has faced over the past year and stands ready to give what support it can to HMRC to bring forward a clear recovery plan. ICAEW has called for the restoration of priority access to the agent dedicated line for many months and representatives have attended two meetings specifically arranged to discuss this issue.

ICAEW has also pressed for an improvement to service standards at the bi-monthly meetings of the Representative Bodies Steering Group (RBSG) where Tax Faculty representatives have raised the problems encountered by members. Specific issues have also been raised directly with the relevant HMRC team and through the Issues Overview Group and the faculty has made the case for greater transparency by HMRC, with more information about delays and problems in the system being made publicly available.

ICAEW calls upon HMRC to publish a clear recovery plan and encourages HMRC to work more closely with the professional bodies to improve service levels so as to restore them to a sustainable level as soon as possible.

The Tax Faculty encourages all members to report service issues on the HMRC online agent forum as that supports ICAEW when escalating the issues with HMRC.


Tax does have to be taxing.

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  • Attend any meeting with HMRC
  • Appeal to the First-tier Tribunal or Upper Tribunal
  • Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"

Thursday 20 May 2021

One Month Left To Join VAT Deferral Payment Scheme


 

HMRC have warned that businesses that deferred VAT payments last year have one month left to join online to pay in monthly instalments under the VAT Deferral New Payment Scheme.

The online portal for the new payment scheme closes on 21 June 2021.

Over half a million businesses deferred £34 billion in VAT payments due between March and June 2020 under the VAT Payment Deferral Scheme. Businesses had until 31 March 2021 to pay this deferred VAT or, if they could not afford to do so, they could go online from 23 February to set up a new payment scheme and pay by monthly instalments to spread the cost.

Jim Harra, HMRC’s Chief Executive, said:

“Businesses that deferred paying their VAT last spring have until 21 June to join the VAT Deferral New Payment Scheme online. They should act now to avoid missing out on this opportunity to spread payment of their deferred VAT across monthly, interest-free, instalments.

The new payment scheme is part of the Government package of support worth over £350 billion to help protect millions of jobs and businesses during the pandemic and as we emerge on the path to recovery."

Eligible businesses that are unable to use the HMRC online service by 21 June 2021 can ring the HMRC Coronavirus Helpline on 0800 024 1222 to join the scheme until 30 June 2021.

Businesses may be charged a 5 per cent penalty and / or interest if they don’t join up to the scheme online by 21 June, or pay in full by 30 June, or contact HMRC to make an arrangement to pay by 30 June 2021. Businesses should also contact HMRC by 30 June 2021 if they need to agree extra help to pay.


Tax does have to be taxing.

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Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

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Tax Investigation Insurance is an insurance policy that will fully reimburse your accountants (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your Accountant (your tax return agent) to:
  • Deal with any correspondence from HMRC
  • Attend any meeting with HMRC
  • Appeal to the First-tier Tribunal or Upper Tribunal
  • Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"

Monday 10 May 2021

The Rise of The MUCs


 

Seemingly, more than 40,000 people from the Philippines have been recruited to front British companies as part of schemes costing the UK "hundreds of millions of pounds" in lost taxes.

BBC Radio 4's File on 4 discovered more than 48,000 of these companies have been created in the past five years.

Some staff at Covid test centres run by G4S have been employed by subcontractors in this kind of scheme.

G4S said that, when this came to its attention, HMRC was notified.

The company said it was taking steps to ensure that all agency workers were employed directly and not via a subcontractor.

Employers pay 13.8% in National Insurance contributions on most of their employees' earnings, if the employee earns more than £170 a week.

It works by exploiting the government's Employment Allowance - an annual discount of £4,000 per company on National Insurance contributions. The allowance was meant to encourage companies to take on more workers.

However, recruitment agencies exploit the allowance by employing temporary workers through a series of mini umbrella companies - or "MUCs".

Each individual MUC has only a small number of workers and qualifies for the tax relief. These kind of arrangements can cost the taxpayer hundreds of millions in lost tax revenue a year. 

HMRC said it was using both its criminal and civil powers to challenge what it called "MUC fraud" - and recently deregistered more than 22,000 mini umbrella companies thought to be involved in such schemes.

It says it has made a number of arrests and taken steps to recover unpaid tax from businesses which knew or should have known about fraud in their supply chain.


Tax does have to be taxing.

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Tax Investigation Insurance is an insurance policy that will fully reimburse your accountants (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your Accountant (your tax return agent) to:
  • Deal with any correspondence from HMRC
  • Attend any meeting with HMRC
  • Appeal to the First-tier Tribunal or Upper Tribunal
  • Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"

Friday 7 May 2021

HMRC Says Gary Lineker Owes £4.9M in Tax


 

The dispute has been ongoing for a year according to tax tribunal documents which were published last month. HMRC claims it is owed £3,621,735.90 worth of income tax and £1,313,755.38 as national insurance contributions from Lineker.

Speaking to the Financial Times Jon Holmes, Lineker's agent, defended his client's actions.

“It is a question of whether he is employed by the BBC or not.

Most people, once they understand employment law, would say of course he isn’t. He works for many other people.”

HMRC is arguing Lineker is essentially a “disguised employee”.

HMRC's action covers work the presenter did for the BBC between the 2013-14 and 2016-17 tax years, and BT Sport for the 2015-16 and 2017-18 tax years.


Tax does have to be taxing.

Tax Investigation Insurance

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Tax Investigation Insurance is an insurance policy that will fully reimburse your accountants (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your Accountant (your tax return agent) to:

  • Deal with any correspondence from HMRC
  • Attend any meeting with HMRC
  • Appeal to the First-tier Tribunal or Upper Tribunal
  • Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"

Thursday 6 May 2021

Has HMRC Stopped Responding To Queries?


 

There have been numerous tweets of late, from people who have had little joy in being able to contact and receive a response from HMRC regarding tax issues/queries.

Has HMRC given up responding to queries?

Tax does have to be taxing.

Tax Investigation Insurance

Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

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Tax Investigation Insurance is an insurance policy that will fully reimburse your accountants (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your Accountant (your tax return agent) to:

  • Deal with any correspondence from HMRC
  • Attend any meeting with HMRC
  • Appeal to the First-tier Tribunal or Upper Tribunal
  • Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"

Wednesday 5 May 2021

Stopping The Scammers



Tax does have to be taxing.

Tax Investigation Insurance

Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

You have the peace of mind knowing that your accountant's (your tax return agent) fees will be paid by the insurance without any Excess for you to find.

Tax Investigation Insurance is an insurance policy that will fully reimburse your accountants (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your Accountant (your tax return agent) to:
  • Deal with any correspondence from HMRC
  • Attend any meeting with HMRC
  • Appeal to the First-tier Tribunal or Upper Tribunal
  • Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"

Tuesday 4 May 2021

Tony Margaritelli Nails It!



Tax does have to be taxing.

Tax Investigation Insurance

Having a Solar Protect Tax Investigation Insurance policy at your disposal means that should you be one of the many 1000's of businesses or individuals that are selected by HMRC each year to look into your tax affairs your own accountant (your tax return agent) can get on and defend you robustly.

You have the peace of mind knowing that your accountant's (your tax return agent) fees will be paid by the insurance without any Excess for you to find.

Tax Investigation Insurance is an insurance policy that will fully reimburse your accountants (your tax return agent) fees up to £100,000 if you are subject to enquiry by or dispute with HMRC.

A Solar Protect policy will enable your Accountant (your tax return agent) to:
  • Deal with any correspondence from HMRC
  • Attend any meeting with HMRC
  • Appeal to the First-tier Tribunal or Upper Tribunal
  • Having the security of knowing that fees will be met in full will enable your Accountant (your tax return agent) to defend your position robustly

Please click here for details.

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"