Happy 10th Birthday HMRC!

My thanks to a loyal reader who sent me this message from Lin Homer to HMRC staff about HMRC's 10th birthday:

"Dear Colleague

On Saturday, HMRC turned 10 years old.

I’m proud to lead this great organisation, proud of what we’ve achieved over the last decade and proud of the journey on which we’ve embarked with Building our Future.

I’m also very aware of the thousand years of history that underpins HMRC today, and of the great contributions made by our predecessor organisations.

Since HMRC was formed, we’ve achieved a great deal together – thank you. We’re on track to bring in a record £510 billion revenues this year, we’ve continued to improve service to our customers and we’ve delivered some major projects, such as real time information, that have really improved the UK’s tax system. This has paved the way for the creation of digital tax accounts that will transform the way that people manage and pay their taxes.

But there’s much still to do – we know we’re not consistently providing the right levels of customer service and after the General Election the demands on us will increase further. We’ll need to be even more radical to meet the changing and increasing expectations of customers, Government, the media and other stakeholders. Building our Future explains how we’re going to do this.

Of course, the history of tax over the last thousand years, and in the last ten, has been one of continual change and evolution; our 10th birthday gives us a chance to recognise our past achievements as well as looking to the future.

So, happy birthday HMRC! I meant what I said at the Public Accounts Committee, that there are no better people than the folk in HMRC. Whether it’s helping customers, colleagues or the communities we serve, it’s your contribution that makes the difference. Thank you to you and to all the great people working here who make me feel so privileged to lead such a strong team.

Best wishes

Lin Homer"

A belated happy birthday HMRC!

Tax does have to be taxing.

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Failure

My thanks to a loyal reader for alerting us to the this rather interesting piece of information.

"To add to the mix they are recruiting a new Head of Chief Executives Private Office (G6) and Private Secretary to the Chief Executive (G7) - both posts are currently filled by staff who came across from DWP when DLS got the job. So why are they advertising the posts again? Could it be that all three are transferring?"

The comment was made in relation to my article about Lesley Strathie's soon to be announced departure for pastures "new" in a civil service position where she will "champion the improvement of front line services across the Civil Service, and lead the development of the profession across government".

Clearly her two loyal retainers are leaving with her.

Anyhoo, with such a change at the top, this is as good a time as any to muse a while as to how we got to where we are now, and why the Grande Dame has failed (even though her "new" role will be used as a cover by the politicians to avoid the use of the word "failure").

by happen-stance a loyal reader reminded me about an article that appeared in the Guardian in February 2010, which covered Lesley Strathie's response to the damning review from the Cabinet Office (noting the changes that Excom had already made to improve processes and structures within the organisation - remember this was written in February 2010).

The Cabinet Office review was based on the results of the second people survey in 2009 (2010's results were in fact much worse). As can be seen from the article, Strathie's strategy was to "harness" the enthusiasm and talent of local management as a driver for change.

"No less than one would expect, of course, and a fair recognition that the right efforts have been made by those who will further drive her vision going forward. But, as any change expert will support, the main barriers to implementing change tend to be not the visionaries at the top of the organisation, nor the 'workers' as a complete group but those who see change as a threat to their career ambitions or a challenge to a comfortable status quo.

The wrong job, the wrong way, for too long

Staff within HMRC are well known for their tenacity and passion to do a great job. However, despite all the change that the organisation has undergone over the last few years, many still feel that they have been doing the wrong job, the wrong way, for too long. The key to successful change is usually to be found in engaging key operational staff, then motivating them to drive the whole process forward quickly and effectively.

This in turn requires a clear view, not just of the strategic goals but also a comprehensively-thought-through model for the entire new organisation, which encompasses vision, strategic performance measures, organisational structures, new projects and business-as-usual activities, together with the right combination of skills, competencies and behaviours needed by all staff.

More important than any of these areas individually is the need to demonstrate clear alignment between all of them. Research shows that organisations that do not seek this rarely achieve their performance goals; whereas those that do, often achieve 200%+ of their targets.

As Strathie recognised in her comments, top-down and bottom-up alignment are vital to the future success of the organisation.

If HMRC staff understand the organisation's goals at strategic and operational level, they will also understand how their own job contributes to those goals, and they are likely to be well-motivated and strive even harder to achieve their own targets.

The Cabinet Office review stated that at least one layer of management remains more likely to be focused on building the profile of their own area (and themselves) than looking out across the silos for the good of the department as a whole.

This is unlikely to change until they feel that their advancement is clearly linked to HMRC's overall success. Strathie's comments suggest that this will be one of the first areas to which she will turn her attention.

The answer for HMRC lies in governance, leadership and culture – harnessing the passion and work ethic of the majority of staff and persuading or redeploying those who see no need for change. The kind of detailed alignment model I mentioned earlier is at the heart of such a programme – but time to implement it fully is limited, given the proximity of the General Election which tends to change everyone's priorities."

One and a half years on, with worsening engagement scores, poor performance and Strathie's departure whilst still on sick leave, what went wrong with that strategy?

The reality of harnessing management enthusiasm and talent requires there to be enthusiasm and talent at management level, sadly this does not exist in bucket loads at that level in HMRC (as has been noted many times on this site, and as Excom are now realising).

Excom assumed they had the talent from SO and above to understand the strategy, they didn't. The recent capability reviews now show in black and white that HMRC is starved of talent at this level.

Why is HMRC starved of talent at this level?

Go back in time to when Gordon Brown was Chancellor, and when he was looking for efficiency savings.

The Labour government of the day moved swathes of the Civil Service to the provinces (oddly enough Labour heartlands!).

Many experienced HMRC managers opted to take the very generous redundancy packages, rather than move to the provinces. The result being an expanded set of regional offices with no managerial competencies.

To add to the mix, the merger of the Inland Revenue and Customs resulted in chaos; as managers with no experience of tax/customs were put in charge of people without understanding he reality of their day to day jobs (the buzz word was "pure management", a tax manager could manage a customs department and vice versa).

Promotion through "learning the ropes" disappeared, especially in Personal Tax due to the lack of experienced managerial talent. Inexperienced managers suddenly had to recruit and backfill (replace leaving managers), without understanding business principles or any oversight of their decisions.

This has resulted in personal fiefdoms being created where sycophantic jobsworths are in control (see the comments made on this site over the years by HMRC staff). Pacesetter was used/manipulated by the management dross to fortify their fiefdoms. Excom have belatedly realised that Pacesetter has been manipulated, but will not fully abandon it. Instead local management are being by-passed in an attempt by Excom to see reality.

Whilst it does not take that long to inflict damage referred to above on an organisation, rectifying it will take a very long time and will not be for the faint-hearted.

HMRC have committed to their political masters that the results of the staff survey in 2012 (due to be published in Q1 2013) will be significantly better than the current appalling results.

The sad reality facing HMRC is that removing the deadwood of underperforming management will take longer than a year, and positive effects on staff morale/efficiencies/tax take etc etc will not be evident by the 2013 deadline.

HMRC now face the very real risk of being declared "unfit for purpose".

Tax does have to be taxing.

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To find out more, please use this link Taxwise

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Click the link to read about: Tax Investigation for Dummies

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Back To The Future?

A study by PCG (Professional Contractors Group) shows that 71% of its contractor members believe that HMRC should be split into a Revenue section and a Customs section, in order to create a simpler tax system.

Those of you with long memories will recall that HMRC was once (pre Brown) in fact two separate organisations (the Inland Revenue and Customs and Excise). A significant number of comments posted on this site by those who work in HMRC criticise this merger, and blame some of the ills that HMRC is suffering on the forcing together of two separate bodies.

It is clear that the merger has been botched, and is still the cause of much internal friction between IR and Customs people. I personally am of the view that it may well be worthwhile splitting the two departments up even if, in the short term, that will require the taxpayer to foot the additional costs.

However, I do not think that splitting HMRC into two is a panacea for all that ails HMRC and our tax system.

The fundamental problem is that the tax system in the UK is too complex, neither the taxpayer or staff of HMRC fully understand it and the costs of administering/complying with it are excessive.

Additionally, as is evidenced by many comments on this site, HMRC management (for numerous reasons) are simply not up to the job of motivating/managing their staff.

Any splitting of HMRC needs to be accompanied by a fundamental simplification of our tax system and a radical reorganisation of the management structure/quality within HMRC.

All of that will cost money.

Sadly, I do not believe that our government has the resources or guts to take the necessary action to improve HMRC (other than some "window dressing" that will grab the headlines for a day or two).

Comments and views, as always, welcome.

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE 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 Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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Welcome To The 19th Century

The Telegraph reports that an all-party group of MPs will tell the Treasury that HMRC is "a 19th century organisation" in need of fundamental reform.

True enough, HMRC is falling apart at the seams.

However, I would venture to suggest that a 19th century organisation would have been better run and not made so many cock ups.

This shambles of an organisation is a result of a.o.:
- political dogma/arrogance,
- political interference,
- a staggeringly complex tax system,
- the politicisation of HMRC
- and lousy leadership within HMRC itself.

HMRC is now working on a major "recovery programme", which means that staff who handle "normal" HMRC business have been taken off their normal duties.

The result?

I would suggest more chaos, more delays and the eventual meltdown of our tax system in its current form.

Michael Fallon, a senior member of the Treasury select committee, said:

"It now looks as if there are even more mistakes in the pipeline.

We're going to have to find out why the computer system didn't work as it should, why it cost so much money and why they didn't design it in a way that is up to date with the way Britain works.

The whole thing needs changing."

Ian Liddell-Grainger, chairman of the group, put the boot in further and said that HMRC was not up to the job of collecting income tax.

"HMRC is a 19th century organisation in a 21st century environment. It has not kept up with the times.

The PAYE system needs to be fundamentally reformed. The current systems are not robust enough to do the jobs they are supposed to do."

The good news is that HMRC are insisting that the new computer system will improve the accuracy of tax codes "in the medium term".

By then we will be either dead or bankrupt!

HMRC is not fit for purpose..PERIOD!

Tax does have to be taxing.

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Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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Bernard Ingham's View

Unedited, as per The Yorkshire Post:

"WHEN in doubt, set up a committee. That is the politician's answer to everything. It is often an elegant response to a knotty problem because, like Royal Commissions, committees can take minutes and spend years. Just what parties in power, if not the public interest, order.

And so, while his colleagues are culling quangos, Chancellor George Osborne has set up a new one. It's the Office of Tax Simplification, otherwise known as OOTS.

Unfortunately, we are in no position to grumble about OOTS. Osborne said he would establish it two years ago because, as was his wont, Gordon Brown had taken a complex system and complicated it. The new Chancellor has appointed a former Tory Minister, Michael Jack, and John Whiting, a former PriceWaterhouse tax partner, to sort out the mess.

So far so good. But what sort of dog's breakfast has Brown left behind? OOTS' usefulness turns on the answer.

It goes without saying that the tax system is complicated. There are a lot of vested interests behind its complications. As an eminent Scottish lawyer once told me over dinner, budgets were his bread and butter. I gathered that the more impenetrable they made the system, the fatter he became. Gordon Brown was God's gift to tax lawyers.

Since the 1999 Finance Bill, tax legislation has grown at an alarming rate. So have the penal regulations introduced since self-assessment tax returns were issued in 1997.

On top of this came the merger of the Inland Revenue with Customs and Excise in 2004. Rubbing shoulders with tough Excisemen brought up on nabbing smugglers has, it seems, done nothing for the taxman's dubious PR skills.

The result, according to accountants I know, is a deterioration in the relationship between taxman and taxpayer. HMRC are the masters now. I cannot personally testify to this since, in my lazy way, I employ an accountant to devil for me. He is not a complaining sort.

But I am clearly no more representative than is Naomi Campbell of models in taking post-prandial delivery of "blood diamonds" – or "dirty-looking stones" – on her bedroom doorstep. Last year, HMRC records it received 73,455 complaints and has even set aside £30.7m for legal costs in appeals that taxpayers are expected to win.

In the first half of last year, 20,778 taxpayers asked for an independent review – mostly for late filing of returns – and more than half either had the penalty withdrawn or cut.

These figures do not testify to respectful relations between the public and tax collector. Nor does the awesome total of 18 million unresolved cases covering both over- and under-payment Messrs Jack and Whiting clearly have their work cut out.

It may well be argued that, if – and hope springs eternal – they can simplify the system so that I can understand it, the problem will solve itself. But will it? All I hear suggests that it is not just a matter of complexity; it is also one of attitude. In other words, it is not just a matter of bad law; it is a matter of the public servant's approach to the citizen – as I fear it is in so many branches of our bureaucracy.

I speak as one who recognises that avoidance of tax is a national industry and that no Revenue officer should be born yesterday – or expect to be loved.

But the readiness to impose ever increasing penalties, some of which can have serious implications for contractors' continued operation in business, the difficulty of finding and reaching the appropriate office, the time taken to make simple repayments and the excuses offered demand more of OOTS than mere simplification.

It probably does not help that there are competing chartered institutes of accountants in this green and overtaxed land. They surely bear some responsibility for our tax system being up to its knees in the Brown stuff. Perhaps the public would have been better served if they had spent more time on insisting on good law and less on ever more complex methods of tax avoidance in pursuit of their own profit.

It is probably a good thing that OOTS is trying to simplify our hopelessly complex system of providing the wherewithal for the nation's operations. But I trust it also feels it must look at the spirit in which the Revenue conducts its essential business.

Unless it does, Osborne will not realise his ambition of showing the world that Britain really is open for business. It must clear the air as well as the Statute Book."

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE 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 Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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Hartnett Places HMRC Above The Law

Fresh from his junket to Washington, Dave Hartnett continues to believe that he bestrides the world like a colossus and that all should tremble before him.

His latest "battle against evil" will, seemingly, be waged against lawyers.

Hartnett is, as we know, fixated on the "evil" people who try to avoid tax (despite the fact that avoidance is not only legal, but logical).

Hartnett is extremely angry that lawyers are offering tax avoidance advice to clients. This advice is protected by legal privilege (ie HMRC can't get their hands on the lawyers' files, as they now can do with accountants).

Hartnett wants legal privilege to be overturned when it comes to HMRC. In other words, he wants to place HMRC above the law!

Quite an ambitious little civil servant isn't he?

Beware little men with big ambitions.

Why such evangelical zeal from a man who has, until the last few years, been absolutely invisible?

The answer is simple, some moons ago Hartnett butt kissed Brown and promised him that all his financial needs could be met if only HMRC were given more power. He gave Gordon a glimpse of a future overflowing with honey, derived from unlimited revenues harvested by HMRC's new powers.

The trouble is Hartnett's promises have not come to fruition. People are not prepared to kowtow and roll over to play dead to the government's desire to milk them dry, and are either leaving the country or ensuring that they pay as little tax as legally possible. Thus Hartnett is left looking rather foolish.

It the last act of a desperate man to try to place himself/his organisation above the law.

Hartnett should remember that legal professional privilege is a fundamental human and democratic right, and a cornerstone in the administration of justice. Tamper with that, and we move one step further forward towards dictatorship.

Hartnett though is more interested in saving his own skin, rather than preserving the rule of law or the rights of the British people.

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE 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 Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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"

Don't Believe The Hype

As Dave Hartnett bestrides the net like a colossus, warning tax evaders that they may be banged up in jail, and HMRC gets "heavy" with tax avoidance schemes and offshore financial centres it may be worthwhile focusing on how much tax is actually lost as a result of offshore and onshore tax avoidance schemes (legal).

Last year the TUC conducted some research that they said proved that tax avoidance by the 50 largest companies in the FTSE 100 was depriving the Treasury of £11.8BN.

Deloittes decided to analyse the TUC's research, and concluded that it was bollocks. The amount of tax that the Treasury "loses" from companies using avoidance techniques and offshore tax havens is in fact less than £2BN.

In addition to Deloittes rubbishing the TUC claims, a recently published Treasury report into offshore tax havens (British Offshore Financial Centres) highlights the important role played by the Crown Dependencies in funding banks on the UK mainland.

Which is kind of ironic, given that HMRC and the Treasury have been vilifying these places for sometime now describing them as havens for "evil" tax avoiders and tax evaders.

The report notes that the Crown Dependencies make a "significant contribution to the liquidity of the UK market".

Given the parlous state of the Brown's Bankrupt Britain, and the fact that despite owning several banks the government appears to be powerless to increase bank lending (thus kickstarting a recovery), the liquidity provided by these offshore centres is even more vital to our embattled economy.

The report notes that in the second quarter of this year, they provided net funds to banks in the UK of £195BN.

Oh and what makes these offshore centres a magnate for inflows of money, that are then funnelled into the UK?

That would be their low tax rates!

The same low tax rates that our blinkered Treasury is telling them to raise.

Could it be that the Treasury and HMRC are trying to use tax avoidance and smear offshore financial centres, as diversionary tactic to take people's attention away from the Treasury's and HMRC's economic mismanagement and incompetence?

Surely not!

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE 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 Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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"

Hartnett On YouTube

Dave Hartnett follows the Prime Minister's successful foray onto YouTube, and warns offshore tax evaders that they may go to jail.

Couldn't someone from HMRC told him to comb his hair first though?

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE 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 Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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"

Size Matters!

Congratulations to our "respected" Labour administration, they have laboured hard over the last 12 years to create a tax system that is truly record breaking.

Something to be proud of!

LexisNexis report that the 2009 edition of its tax guide, Tolley's Yellow Tax Handbook, contains a stonking 11,520 pages; twelve years ago it was a "mere" 4,998 pages.

It doesn't take a genius, or even a politician, to work out that despite claims by some in the Treasury and HMRC that strives are being made to simplify the tax system, the reality is quite simply the reverse.

The UK now has the longest tax code in the world.

Well done Brown and Darling!

As I have noted many times before, Brown doesn't do "simple". Until he and his party are kicked out of orifice, things will only become ever more complex and unwieldy.

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE 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 Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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"

Downward Trend

My thanks to Serious Cat for going to the trouble of looking up the results of previous HMRC staff surveys, and comparing the results (where possible) with the most recent one.

As can be seen, the trend has been in the downward direction. The question that springs to mind is why the CEO of HMRC expresses "huge disappointment" at this year's results, when the trend has been downward for quite some time?

Is she so really out of touch with how staff feel about HMRC?

Given this downward trend, what really can be done to reverse it; given that the government is broke, and that many of those "running" HMRC have been in situ during this period and are therefore presumably "responsible" for the lousy staff morale?

As Serious Cat says:

"This is the HMRC that Gordon Brown has created.

This will be his legacy."

Serious Cat's comment:

"I present, for information purposes, a few figures selected from the last 6 staff surveys.

As previously stated, many of the questions/statements are different in each survey, but a handful are the same and capable of comparison.

(Please note, there were two staff surveys conducted in 2005, one in May and another in November.)

Statement 1: I am proud to work for HMRC

Positive
05/2005 - 43%
11/2005 - 40%
2006 - 36%
2007 - 39%
2008 - 33%
2009 - 25%
Down 18%

Neutral
05/2005 - 36%
11/2005 - 36%
2006 - 34%
2007 - 38%
2008 - 36%
2009 - 38%
Up 2%

Negative
05/2005 - 21%
11/2005 - 24%
2006 - 30%
2007 - 23%
2008 - 31%
2009 - 37%
Up 16%

Statement 2: I would recommend HMRC as a good place to work

Positive
05/2005 - Question not asked
11/2005 - 37%
2006 - 28%
2007 - 30%
2008 - 25%
2009 - 17%
Down 20%

Neutral
05/2005 - Question not asked
11/2005 - 28%
2006 - 25%
2007 - 26%
2008 - 24%
2009 - 31%
Up 3%

Negative
05/2005 - Question not asked
11/2005 - 36%
2006 - 46%
2007 - 44%
2008 - 50%
2009 - 52%
Up 16%

Statement 3: I think HMRC is well managed

Positive
05/2005 - 26%
11/2005 - 22%
2006 - 20%
2007 - 19%
2008 - 15%
2009 - 11%
Down 15%

Neutral
05/2005 - 38%
11/2005 - 38%
2006 - 35%
2007 - 28%
2008 - 27%
2009 - 25%
Down 13%

Negative
05/2005 - 36%
11/2005 - 40%
2006 - 46%
2007 - 52%
2008 - 58%
2009 - 64%
Up 28%

I think these figures speak for themselves. In 2005, only a quarter of staff felt that HMRC was well managed. In just 4 years, that figure has dropped to a tenth. Nearly 90% of staff are unable to have confidence in HMRC's management.

Since the 2009 survey and its appalling results, what has the reaction of senior management been? Er, not much that I can see.

Despite these atrocious - nay, scandalous - figures, I actually have a small measure of sympathy for senior managers. They are faced with a department that simply doesn't have the budget to revolutionise itself and, thanks to Brown, Darling et al, that budget is being slashed year on year.

We are actually in the position whereby if a taxpayer e-mails us documentation in Word 2007 format, we can't read it. Why? Our version of Word is too old. Can we upgrade to 2007? No, there isn't enough money in our budget.

This is the HMRC that Gordon Brown has created.

This will be his legacy."

Tax does have to be taxing.

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What is TAXWISE?

TAXWISE 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 Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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"

Move Over Darling II

Congratulations to Alistair Darling for rubbishing my prediction, made earlier this week, about his long term future.

As to whether his staying in office is a sign of his strength, or the Prime Minister's weakness, is another matter.

Tax does have to be taxing.

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"

Muddying The Waters

The Government's controversial car scrappage scheme (bangers for cash), has hit another hurdle courtesy of the HMRC "guidance note" about the scheme.

The car industry claim that the note had "muddied the waters".

A Honda spokesman was quoted in The Times:

"We have asked our dealers to hold off registering vehicles. We want to see clarity with this issue of VAT and how the industry contribution is to be managed.

The document sent out last week from the Revenue was quite a confusing document. This is what we are seeking clarification on."

Another example of a poorly thought out government "initiative" adding to the complexity of the already massively overcomplex tax legislation.

However, as noted before on this site, Brown doesn't do "simple".

As to whether encouraging people to scrap old cars and buy new ones (many of which may well be foreign imports) actually improves the economy or environment, is of course another issue!

Tax does have to be taxing.

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"

Snouts in The Trough - Tax Avoidance

Isn't it ironic that Smiler Brown and his party of "fiscally prudent" lackeys have been so very very vocal over the "heinous crime" (so they would have us believe) of tax avoidance, given that they are experts at tax avoidance themselves?

Flipping one's primary and secondary homes willy nilly, so as to avoid CGT etc, is something of a right of passage for members of ZaNuLabour.

Ooh the irony that their political cudgel, HMRC, has now been forced to investigate whether MPs have deliberately evaded capital gains tax when selling their second homes.

I wonder if any Labour MPs will be "named and shamed"?



Tax does have to be taxing.

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"

Happy Budget Day!

Expect higher taxes, broken promises, flawed statistics, fanciful forecasts and "bigging up" rhetoric from Darling and Brown today.

Despite the fact large segment so the budget have already been leaked to a compliant media, the devil will of course be in the detail; which will only become apparent once the professionals have gone through the reams and reams of documents, relating to the budget, produced by the Treasury.

Tax does have to be taxing.

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"

Draft Charter

HMRC have produced a draft charter, and are holding a consultation process open until 21 May 2009.

The aim to make "the tax and benefits system feel simple to use" is most laudable, and one that everyone (Gordon Brown and the Treasury excluded) would all agree with. However, the fact remains that the tax and benefits system is not at all simple.

I cannot see HMRC being able to make much of an impact wrt simplification, until their political masters "buy into" the concept of simplicity.

"HM Revenue & Customs makes sure that money is available to fund the UK's public services. We also help families and individuals with targeted financial support. We aim to make the tax and benefits system feel simple to use.

You can expect HMRC to:

Treat you as honest, believing you are willing to pay what you owe, claiming only what you are entitled to, unless we have good reason to doubt you.

Respect you, listening to your needs and taking into account your circumstances.

Provide you with accurate information, making it easy for those who try to get things right.

Recognise your right to be represented by someone else.

Pursue relentlessly those that break or bend the rules.

Protect the information that we hold about you.

HMRC expects you to:

Work with us to ensure your payments or claims are accurate and made at the right time.

Respect our staff, treating them in the same way as you want them to treat you.

Contact us when you need help, advice or support, letting us know if you have particular needs.

Tell us about changes in your circumstances so that we can get things right as early as possible.

Accessing information about HMRC:

Service standards, such as our times for responding when you contact us.

Data protection policy and keeping your information safe and secure.

Complaints process."

Send in your comments :

-by e-mail to: charter.consultation@hmrc.gsi.gov.uk

-by post to: HMRC Charter Team, Room 3E/02, 100 Parliament Street, London SW1A 2BQ

-by fax to: 020 7147 0391.

Tax does have to be taxing.

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 Secret VAT Increase

Gordon "Smiler" Brown and his Darling Chancellor were somewhat humiliated yesterday, when it emerged that they had been planning to increase VAT to 18.5% in 2011.

This embarrassing plan was revealed when a document signed by Stephen Timms, a junior Treasury Minister, was published on a government website. The hard copy version, also signed by Timms, shows no VAT rate of 18.5%.

The web version has now been removed.

Now here is where the politicians seek to cover their shame. Treasury minister Angela Eagle said that the publication had been:

"..a pure administrative error on the part of HM Revenue and Customs.

For anyone to think it is anything else is complete scaremongering and opportunism of the worst sort."

HMRC stated (as per the Guardian) that the VAT increase had been a fully worked-up option, that had been ditched at the last moment in favour of the 45% tax rate on those earning more than £150,000.

I am of the view that the buck should stop with the people who claim to be in charge of HMRC. Given that these plans were discussed at Treasury level, and signed off by a Treasury Minister, then the responsibility for the dissemination of the "correct" plans lies with the Treasury.

This is not an HMRC cock up, but a Treasury cock up; for Eagle and her colleagues to "rat out" HMRC in this way is a pretty lousy trick. However, many politicians are pretty lousy anyway.

Doubtless some poor sap in HMRC will be ritually sacrificed to protect the "honour" of the Treasury.

Tax does have to be taxing.

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"

Fragmented

The National Audit Office published a report last week that stated:

"The fragmented nature of the customs regime within the department, a lack of accountability and incomplete management information has hindered effective oversight of its performance and risk management."

The merger of Customs and Revenue has damaged both departments, yet produced very few positive outcomes.

Tax does have to be taxing.

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"

Datagate II - The Sequel

Another year, another IT scandal.

This time screw up, relating to the loss of a memory stick containing passwords to a government site via which people can pay parking fines and fill in tax returns, has been blamed on a private contractor (Atos Origin).

All very well, but it is the government that vets, approves and hires these firms.

Anyhoo, the extra icing on the cake is that Gordon "Smiler" Brown has admitted that the government cannot promise the safety of personal data entrusted by the public.

This coming from a government that wants to issue compulsory id cards, build a DNA database, place our medical records online and force us all to submit tax returns online.

Hardly reassuring is it?

There is some good news, the memory stick has been found...outside of the Orbital Pub in Cannock.

Tax does have to be taxing.

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"

Unprotected

Those running HMRC claim that HMRC is a professional organisation, that treats its staff and "customers" (that's the taxpayers to you and I) professionally.

I'm all for that!

The trouble is that the many communications I have had from members of staff and taxpayers, and many stories in the media, would indicate otherwise.

Therefore I am more than a "little concerned" to see that HMRC inspectors will be soon acquiring new new powers to investigate and fine taxpayers, without any safeguards for individuals or businesses.

How can this be?

How can powers be granted, without corresponding checks and balances normally associated with a professional organisation?

Simple, there will be safeguards but not for at least four months after the powers have been granted.

HMRC will acquire powers in 2009 to enter business premises and private homes used for business. For errors that are "careless, but non-deliberate", penalties of up to 30% of an unpaid tax bill can be levied. Fines worth 70% of the final tax bill could be imposed, should officials believe the taxpayer deliberately ignored the need to make a payment. Deliberate concealment could trigger fines worth 100% of the final tax bill.

These new powers will come into effect on April 1 2009.

Tax officers will gain powers to inspect and remove information and documents, while the Treasury will limit the amount taxpayers can reclaim in wrongly paid tax from six to four years. Income tax, capital gains tax, VAT and stamp duty tax will be among payments covered by the new regime. Fines can be imposed from March 2009 on tax bills calculated from March 2008.

The charter to protect taxpayers from "over-zealous" inspectors is not even due to complete its consultation phase until at least July 2009.

Publication and distribution of the charter is unlikely until late 2009 or 2010.

This is not just barmy, it's like putting the fox in charge of the hen house. Others would seem to agree.

The Association of Chartered Certified Accountants wants the new powers delayed until 2010, when the charter is sent to all taxpayers.

Roy Maugham, a partner at accountants UHY Hacker Young, said:

"These are hugely draconian proposals that would allow the Treasury to unjustly enrich itself at the expense of individual taxpayers.

The banks have been criticised for their unfair charges, but if the banks shouldn't operate in this way, why should HMRC?

Permitting HMRC to issue daily fines without authorisation from the general or special commissioners would remove a vital legal protection for taxpayers against the arbitrary use of power.

Regardless of whether taxpayers could appeal, the balance is shifted firmly in HMRC's favour, and would inevitably result in greater use of daily fines."

Unfortunately this is entirely in keeping with the Brown ethos of command and control, he despises the individual (both taxpayer and those who work for HMRC) and believes that the state is supreme.

The government and those running HMRC cannot be trusted, as taxpayers and staff can readily attest to.

You should not be fucked without the protection of a condom (the charter is the taxpayers' condom)!

Tax does have to be taxing.

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"

Taking The Piss II

Yesterday's article about HMRC "management" issuing an edict to their hapless staff instructing them to drink less, so that they would not have to visit the toilet so often, brought forward a number of interesting comments.

One in particular sums up the "quality" of HMRC "management", and spells doom for this organ of the state.

In accordance with the edict on drinking less, and reducing toilet breaks, HMRC "management" have introduced a new quality control procedure.

Can you guess what this is?

Yes, that's right, staff have to fill in a spreadsheet whenever they go to the toilet.

It is clear that this organisation will fall apart in less than year, as no adult in their right mind could/would/should accept being treated like a four year old and bullied in this manner.

To my view the only clear course of action for the staff is to go public with every single absurd "management" instruction they receive, and name and shame all "managers" who bully/harass them.

This failed organisation needs to be torn down and rebuilt.

In its present form it remains a monument to browns' arrogance and incompetence.

Tax does have to be taxing.

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"