Digital ID Cards in the UK: How HMRC's £600m Tax Grab Could Erode Your Privacy

 

In an era where digital convenience is king, the UK government is pushing forward with a new digital ID scheme that promises streamlined services but raises alarming red flags for privacy advocates. Announced in late September 2025, this initiative could hand HMRC an extra £600 million in tax revenue annually—framed as a win against unpaid taxes and human error. But beneath the shiny veneer of efficiency lies a potential "tax grab" that could transform everyday Brits into unwitting surveillance subjects. If you're concerned about government overreach, data breaches, or the slow creep of mandatory tracking, this is your wake-up call. In this article, we'll unpack the scheme, spotlight the risks, and explore why your digital footprint might soon be worth £600 million to the Treasury.

What Is the UK's New Digital ID Scheme?

The government's digital ID rollout, unveiled on September 26, 2025, aims to create a unified online identification system across public services. At its core, it's a digital wallet-like tool that verifies your identity using biometrics, facial recognition, or secure apps, making it easier to access everything from tax filings to welfare benefits.

HMRC is at the forefront, integrating this tech into its "Transformation Roadmap" to automate tax returns. By linking your digital ID to existing government databases, the system would auto-fill sections of your Self Assessment form with data on income, offshore assets, and more. The goal? Clamp down on errors that cost the Treasury billions and chase down £600 million in "lost" revenue from compliance gaps, like under-reported offshore earnings.

Proponents, including the Tony Blair Institute for Global Change (TBI), hail it as a "smarter state" that knows when to help without you lifting a finger. A government spokesman echoed this, stating digital IDs will "support people to access the services they're entitled to and tackle illegal working." Yet, while the scheme isn't mandatory for daily carry, it becomes compulsory for anyone seeking work or certain benefits—effectively tying your livelihood to a government-issued digital leash.

The £600m Tax Grab: Efficiency or Exploitation?

Let's break down the numbers. The TBI estimates that beefed-up data sharing via digital IDs could net HMRC an additional £600 million yearly by plugging holes in tax compliance. This figure stems from better verification of identities used in dodgy right-to-work checks, where expired or fake National Insurance numbers let people dodge taxes. Broader projections from the same think tank suggest up to £2 billion in total public finance gains.

HMRC's pitch is seductive: fewer mistakes mean fairer taxes for everyone, and automated filings save you time. Jo Puddick, TBI's director of political insight, co-authored reports emphasizing how this tech targets "under-taxed offshore income" without harassing honest filers. With setup costs at £1 billion and £100 million annually to run, any windfall would supposedly fund public services.

But here's the warning bell: this isn't just about efficiency—it's a revenue raid dressed as progress. Critics argue it's a stealthy way to squeeze more from everyday taxpayers while the ultra-wealthy slip through cracks. As one GB News audience member put it during a live debate, digital IDs feel like "a prison for society." And with public support plummeting to just 14% post-announcement—from 35% in summer—it's clear many Brits smell a rat.

Privacy Nightmares: Why Digital IDs Spell Surveillance Hell

The real danger isn't the £600 million—it's what comes with it. Handing HMRC a golden key to your digital life opens the floodgates for mass surveillance. Imagine every transaction, job application, and benefit claim cross-referenced in real-time against a central database. One glitch, hack, or policy shift, and your data becomes a weapon.

• Data Breach Risks: We've seen it before—Equifax, TalkTalk. A centralised ID system is a hacker's dream, potentially exposing millions to identity theft. Over two million elderly Brits could be locked out entirely, widening the digital divide.

• Government Overreach and Mission Creep: What starts as tax checks could expand to track your carbon footprint, social media rants, or even political donations. Big Brother Watch slammed it as a "sprawling surveillance system that is frankly chilling," evoking a "social credit model that would make Orwell blush."

• Loss of Anonymity: No more filing taxes under the radar for self-employed freelancers or gig workers. Every error flagged instantly means audits on steroids, with low-income families hit hardest by automated penalties.

A petition against mandatory IDs has surged past 2.6 million signatures, fuelled by fears from opposition parties like the Conservatives and Reform UK. Even BBC reports highlight how the scheme, while not "carried day-to-day," mandates it for work—blurring lines between voluntary and enforced.

The Pros: A Quick Reality Check

To be fair, not everything's doom and gloom. Digital IDs could slash illegal working by verifying identities swiftly, and auto-filling forms might prevent honest mistakes that trigger fines. For small businesses, integrating with tax services could mean less paperwork and faster refunds. But these upsides pale against the existential threats to civil liberties—especially when safeguards feel like afterthoughts in a public consultation.

How to Protect Yourself from the Digital ID Onslaught

Don't just scroll past—act now. Here's your action plan:

1. Sign the Petition: Join the 2.6 million voices at change.org opposing mandatory IDs.

2. Opt for Paper Filings: Until forced, stick to analogue tax returns to minimise your digital trail.

3. Boost Privacy Hygiene: Use VPNs, encrypted apps, and limit data sharing with government portals.

4. Stay Informed: Follow updates from privacy groups like Big Brother Watch and engage in the upcoming consultation.

5. Vote with Your Wallet: Support MPs who prioritise data rights over revenue grabs.

Final Thoughts: Don't Let £600m Buy Your Freedom

HMRC's digital ID push might promise a frictionless future, but at what cost? This £600m tax grab isn't just about unpaid revenue—it's a Trojan horse for unprecedented control. As polling shows support cratering, it's time for Brits to demand transparency, ironclad protections, and alternatives that don't sacrifice privacy on the altar of efficiency. Share this article, spark the debate, and let's ensure our digital IDs serve us—not surveil us. What do you think—convenience or catastrophe? Drop your thoughts in the comments below.

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"

HMRC's Flawed Plans

 

The House of Lords is unimpressed with plans to give HMRC more powers would allow it to force financial institutions to provide information about people’s assets without court approval.

The Lords are of the view that the plans are “flawed” and part of a trend of removing taxpayer protections.

In a report released on Saturday, the Lords economics affairs committee strongly criticised a proposal contained in the draft finance bill, which would become law if approved by parliament next year. 

 The measure would require banks, investment advisers, fund managers, credit unions, insurance companies and credit card issuers to divulge information about their customers if served with a “financial institution notice” by HMRC. 

The information would be used by the authority for checking an individual’s assets for tax purposes or the collection of tax debts. Currently, HMRC can only ask a third party to provide information about an individual’s financial affairs if the person agrees or the tax tribunal approves the request. 

As per the FT:

“[The committee] is very concerned about the removal of taxpayer safeguards for information requests, particularly the need to request permission from the tax tribunal.

These proposals are flawed and not supported by evidence.”

Tax does have to be taxing.

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HMRC Seeks Unfettered Access To Personal Financial Data

HMRC is seeking new powers that will allow it to obtain information about taxpayers from any business or organisation without seeking approval from the tax tribunal.

The proposals, set out in a government consultation launched this week, would allow HMRC to submit information requests directly to financial institutions, accountants, lawyers, estate agents and other third parties.

The consultation also proposes the introduction of a new “financial institution” information request, which would allow HMRC to obtain bank statements, transaction histories and other basic banking information “reasonably required to check a taxpayers’ tax position” without tribunal approval.

The FT quotes Jason Collins, partner at law firm Pinsent Masons:

“If anyone was alarmed at HMRC’s reach then these new powers will feed their concerns. HMRC is essentially asking for unfettered access to information on taxpayers from third parties with no advance independent oversight.” 

Obtaining prior consent from the tax tribunal was an essential check, he said, and helped safeguard taxpayers against speculative enquiries or “fishing expeditions”.

Tim Stovold, head of tax at accountants Kingston Smith, said:

“HMRC wants to remove the protection that ordinary citizens currently have from intrusion into their private financial affairs from the state . . . To abolish the need to seek authorisation from the tribunal would remove a vital public safeguard.” 

The state (especially HMRC) cannot be trusted, and as such any attempt by the state to gather data and information on people's private finances (when they have not been convicted of a crime) without adequate independent oversight should be resisted and stopped.

Tax does have to be taxing.

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HMRC's Compulsory Mass ID Scheme

Millions of British taxpayers have had their voices recorded, analysed and stored by HMRC without their consent.

According to Big Brother Watch, HMRC’s Voice ID system has collected more than five million audio signatures, which have been used to create “biometric ID cards by the back door”, the privacy group claims.

Callers are asked to repeat the phrase “my voice is my password” to register for the scheme. This is then used to confirm their identity when managing their taxes.

HMRC says the service had proved “very popular with customers”  since it was introduced last year, and has helped speed up security procedures and improve access to its digital services.

However, Big Brother Watch said taxpayers were being “railroaded into a mass ID scheme”, as they were not given the choice to opt out.

The group’s director, Silkie Carlo, described the scheme as “shady” and is quoted by The Week:

"These voice IDs could allow ordinary citizens to be identified by government agencies across other areas of their private lives”.

HMRC could also fall foul of the EU’s new General Data Protection Regulation (GDPR), which came into force last month and requires all organisations to obtain explicit consent from users before they use biometric data, “including voice recordings”, to identify someone.

I assume someone will be reporting HMRC to the relevant regulatory authority?

Tax does have to be taxing.

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Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

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HMRC Bans Satire

My thanks to a loyal reader for posting the following comment about HMRC's new rules for the intranet:

"New rules just introduced for commenting on the staff intranet: "no sarcasm or satire". Compared with HMRC, North Korea is a veritable beacon of free speech and democracy."

Sad to see that HMRC has no sense of humour!

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



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HMRC's Snoopers' Charter

Under the The Investigatory Powers Bill (recently approved by the House of Lords) internet providers will be forced to keep a full record of every site that each one of its customers has visited.

Amongst the plethora of government departments that then will be able to snoop on our activities is HMRC.

Consumers’ internet connections records (ICRs) will be kept for 12 months and law enforcement agencies will be allowed to access them during that period, giving them the ability to check if a suspect has accessed illegal services online.

Doubtless any snooping by HMRC will be perfectly legitimate etc. However, the risk of hacking is high.

James Blessing, chairman of the Internet Service Providers' Association, is quoted in economia:

“It only takes one bad actor to go in there and get the entire database.

You can try every conceivable thing in the entire world to [protect it] but somebody will still outsmart you.”

Let's see how this all works out then!

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



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Big Homer Is Watching You

Theresa May's grand plans to monitor websites that we visit, in the name of "defeating" terrorism, also give other bodies the right to access what we browse.

Can you guess what other bodies?

Yes, that's right, councils and HMRC!

Don't worry though, apparently the new powers will be primarily used by police and the security services in pursuit of suspected terrorists and serious criminals.I am sure HMRC will hardly be tempted at all to spy on what we are browsing.

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



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HMRC Goes For Online Sales

Those who use online sites such as eBay and Amazon to flog stuff on a regular basis, or as a "hobby", should be aware that profits from such sales are taxable.

More to the point, they should be aware that HMRC is using its powers to force these websites to hand over customer account details, including their selling activity.

The Telegraph reports that HMRC has sent 14,000 letters to traders suspected of running a business and failing to declare this on their tax returns:

“HMRC thinks you should have declared more on your tax returns than you did.”  

Anyone who fails to reply will face an automatic tax charge, where HMRC makes its own calculations on tax due and demands that it is paid within three months.

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"

A Nation of Spies

Dictatorships survive by encouraging their citizens to spy and inform on their fellow citizens. Orwell's 1984 foresaw this, and wrote of the children informing on their parents to Big Brother.

Step forward HMRC, which clearly has been reading 1984 and is now encouraging children to inform on those that they suspect of not paying "their fair share of tax".

HMRC has set up teaching modules to guide children through the maze of pay as you earn and National Insurance contributions.

Fair enough!

However some of the modules (which can be downloaded from HMRC's website) teach kids as young as 11 about paying their "fair share" of tax.

What the fark is "fair share"?

How is a child, or an adult, meant to know what someone-else's "fair share" of tax is meant to be?

HMRC makes use of video, games, facts and quizzes to “help make teaching financial capability and citizenship issues relevant and engaging”.

Pass the sick bag!

The Telegraph notes one module (“tax responsibilities of a good citizen”) which is meant to "help" teenagers “understand the obligations if being a good citizen and discuss what should happen to hose who are not prepared to work under such obligations”.

One lesson plan – targeted at 14 to 16 year olds – requires students to “discuss whether it is good to pay the tax we do, considering the benefits we receive. If it is good, then why do people try not to pay?”

 It continues:

 “Show class the remaining factfile slides on tax evasion. What do students think of those who refuse to pay tax or try and defraud the benefits system? “Can they think of any example they may have heard of in their local area?” 

 A further “plenary session” asks:

 “What do students now think about paying taxes? In what other ways can we contribute to working together for a better society? “What do students think about people who try to avoid paying taxes? Is it a victimless crime? What kind of penalties should such people be given when they are caught?”

David Green, director of Civitas, is unimpressed:

"This sounds a bit too 'Big Brotherish'. People 'in their local area' are most likely to be parents or close relatives. Turning children into state spies is un-British." 

The state should fear the people, not the people fear the state!

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"

Bullying and Not Fit For Purpose - Further Update

A wee while ago I wrote about the case of a self-employed Kent tradesman who was fined £1,400 for mistakenly overclaiming a £2,000 rebate under HMRC's new penalty regime.

HMRC fined him £1,400 after he tried to reclaim £3,000. HMRC calculated that he was in fact owed £1,000, and fined him 70% of the difference between the two sums.

HMRC has now cancelled the fine and repaid the man the £1,000 in tax that they owed him, plus £100 as a goodwill gesture because of "irregularities" in his case.

Well now!

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"

Bullying and Not Fit For Purpose

The Times reports that a taxpayer tried to reclaim £3K in overpaid tax for the year to April 2010.

However, HMRC calculated that he was in fact owed £1K.

Fair enough!

However, under the new penalty regulations HMRC can fine people up to 30% of tax owed for careless mistakes and up to 100% for deliberate errors.

Now being a simple sort of person I would suggest that these rules, unless there has been a deliberate attempt to defraud HMRC, are meant to be applied with some form of commonsense (most especially if it is a tax reclaim rather than annual self assessment).

HMRC took the "middle route", and fined the taxpayer 70% of the £2K difference between the sum that he felt he was owed and the sum that HMRC calculated it would repay him; ie there is an implication that he was deliberately trying to defraud HMRC.

The taxpayer was fined £2K, even though he was owed £1K.

Phil Berwick, director of tax investigations at McGrigors, the law firm that became involved in the case after HMRC issued the fine, told The Times:

"Calculating a rebate can be complicated and the taxpayer in question was unrepresented by an adviser, yet HMRC has refused to take any of this into consideration.

We believe he made an honest mistake, so for HMRC to be fining him is outrageous. HMRC has charged this taxpayer with a higher penalty than someone committing a serious fraud under the old penalty regime."

It is clear that the heavy handed treatment of this taxpayer by HMRC (have they proven that he was attempting to deliberately defraud them?) will put people off from claiming rebates, lest they be fined more than the rebate they get for any accidental error.

Matthew Elliott, chief executive of the TaxPayers' Alliance, put it more directly:

"HMRC seems to have given up entirely on serving the public and taken to bullying them instead. We have a hugely complex tax system, and no one should be fined for being unable to understand its every technicality.

A lot of people are already angry at being overtaxed and, if HMRC tries to deter them from claiming rebates in this way, tempers are going to rise further. The tax system and the tax authorities have ceased to be fit for purpose."

The state is using HMRC to subjugate the population, as it becomes ever more desperate in its search for funds.

Sadly I do not see any change of direction likely, whoever wins the coming election. Lazy MPs voted through the legalisation, that HMRC are now so eagerly using against the taxpayer, without any real scrutiny or care as to the consequences. Many of these same lazy MPs will be returned to parliament after the election.

Who will ask the akward questions?

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"

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.

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"

Power Corrupts - ID Cards and HMRC

The Guardian highlights the dangers of government departments, such as HMRC, using the data gathered via the ID card scheme to go on fishing trips (outwith genuine enquiries, wrt serious criminal offences being investigated).

"The controversial ID card system, which has been amended over the last few weeks, may well be used by various government departments to track individual spending habits and assets.

In a relatively unpublicised move the UK government has given the Treasury department, and specifically tax inspectors, the ability to access the ID card database, which shows big-ticket items acquired by individuals in the UK.

It is believed that by using information on the database, the various tax authorities could ultimately create an audit trail of spending and assets for each individual in the UK."

It seems that the Home Orifice is reluctant to comment on this issue.

Using HMRC as a government spy will further undermine its reputation and indeed its effectiveness (as time will be wasted by HMRC staff who end up spending their time fishing in "uninteresting backwaters", rather than proactively targeting those who are known to be defrauding the tax system).

It goes without saying that the civil liberties implications of this are somewhat "worrying", to say the least.

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"

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"

HMRC Buys Stolen Goods

Some rather interesting news emerged over the weekend, about HMRC buying a series of CDs containing the personal details (eg bank accounts) of a large number of British citizens.

Could this be the missing CDs that HMRC lost last year, containing the details of 25 million child benefit claimants?

Errrmmm......No.

These CDs apparently contain the details of a large number of wealthy people who hold bank accounts in Liechtenstein.

HMRC are so keen to track down every penny of tax, that they believe is owed to them, that they have now stooped to paying off nefarious characters in order to obtain information about suspected tax evaders.

HM Revenue & Customs paid £100K to Heinrich Kieber, for data that it will use to launch investigations of up to 100 British citizens who have accounts at Liechtenstein's biggest bank (LGT).

Now, you may well ask, how did Herr Kieber obtain this data?

Well, he seems to have nicked it.

In 2004 he was convicted of fraud for stealing sensitive information from his employer, LGT, the biggest bank in Liechtenstein, which is controlled by the principality's royal family.

Nice doing business with you Herr Kieber!

Maybe someone should remind HMRC that it is an offence to knowingly handle stolen goods?

Now that these CDs are in the hands of HMRC, given their lamentable track record with regard to information security, can we expect these CDs to be "lost" and then appear on the open market again for purchase at the highest price?

Of course HMRC would argue that none of this subterfuge, unpleasant dealings and costs (in terms of time, money and effort) would have to be undertaken if people didn't go to such extraordinary lengths to evade tax.

That in itself is true, up to a point. However, one of the prime motivations for tax evasion is the complexity of the tax system.

Simplify the tax system to resolve this problem, and cut the costs of collecting tax:

- increase the personal allowances to around £10K
- introduce a flat rate of tax of around 20%
- abolish all other perverse taxes such as; stamp duty, CGT, IHT, NI etc
- increase the rate of VAT to make up the shortfall

Do the above, and there will be a dramatic reduction in the amount of time, effort and money expended by both taxpayers and HMRC in trying to wade their way through the tax system.

Tax does have to be taxing.

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Big Brother - HMRC's Licence To Bug

Orwell's view of the totalitarian state that monitors our every spoken word, written word and action came closer to reality last week, when our good old friends in HMRC were granted the right to bug our phones and intercept our email if they suspect us of tax fraud.

HMRC, on top of its power to arrest people, can now intercept phone calls, emails and letters, as well as bug residential premises and private vehicles.

HMRC see nothing to be alarmed about, as they calmly state:

"Customs officers have always had these powers because of their criminal investigations into drugs and guns.

Now they will be granted across the board. We could use it purely in tax matters. Tax offences are quite often combined with other forms of criminality."

HMRC promise that all surveillance will be conducted in compliance with the Regulation of Investigatory Powers Act and the Wilson Doctrine (which we know was brazenly flouted with the revelations that police have been bugging protected conversations between suspects, MPs and their lawyers).

HMRC will also be subject to checks by the Office of Surveillance Commissioners and the Interception of Communication Commissioners Office.

Therefore, why should we be worried by this development?

Here's why you need to be very worried:

1 The Wilson doctrine, as already stated, has been breached.

2 HMRC will not need to seek external authorisation for any of its surveillance activities.

3 HMRC has not drawn up any code of conduct for how it will use its "exciting" new powers.

4 In 2005 explicit assurances were given that the merger of the Inland Revenue and Customs and Excise would not give rise to an alignment of powers. These assurances have been broken.

5 HMRC will act as judge, jury and executioner. Due process, as required for other aspects of law enforcement by other organs of the state, will not be followed.

6 HMRC is massively incompetent (eg datagate, tax credits etc), they cannot be trusted with such powers.

7 There is no evidence to support the need for extending HMRC's already excessive powers.

Am I alone in finding that thought of HMRC being given such powers to be more than a little worrying?

How can we trust the government, or HMRC, not to misuse these new powers?

I would note that they can bug anyone, on the slightest suspicion of tax fraud/evasion. HMRC will be the judge as to what constitutes reasonable "suspicion".

Given that, under Gordon Brown, HMRC is being used as a tool of the state to impose its political will (eg the erosion of the right to avoid paying tax) there is a very clear and present danger to our liberties with this extension of HMRC powers.

Harry Travers, partner at law firm BCL Burton Copeland, is far from impressed. He is quoted on AccountingWeb:

"It seems clear to me that HMRC used the merger to push for greater powers.

There is no evidence that bugging powers are needed in relation to direct tax fraud, and HMRC did not even attempt to provide any."

I would also remind you that some Customs and Excise prosecutions have collapsed in recent years, due to the abuse by officers of their powers.

The prosecution for Operation Venison, which led to accusations of VAT fraud for five Manchester businessmen three years ago, fell through due to "muddle, incompetence and lack of frankness" said Mr Justice Crane.

Can HMRC be trusted not to misuse these powers?

No, they can't!

Every email, conversation and phone call by anyone can now be listened to by HMRC (ie the state).

This is wrong.

It is now necessary for the public to take a stand against the state, and to ensure that these powers are revoked at the earliest opportunity.

In the short term I recommend that people equip themselves with anti bugging devices, and ensure that their emails are encrypted.

Tax does have to be taxing.

HMRC Is Shite (www.hmrcisshite.com) is brought to you by www.kenfrost.com "The Living Brand"

Big Brother

There is something of a right old fracas brewing over the secret contract that gives government officials access to detailed records of 16 million houses and property sales. This contract is due to expire in March, and will be up for renewal.

The contract is between the government and Rightmove, the online property search firm, and it gives HMRC staff access to its records of transactions.

Needless to say these records contain details such as sale prices of properties, their internal features and any modifications that would enhance their value.

Why would HMRC be interested, or indeed need to know this this information?

Council tax!

The details gleaned by HMRC will be used by the government to increase council tax. This most hated and iniquitous tax is already being raised again this year by more than inflation. We can be certain that as the government becomes ever larger and more greedy, it will need to find further ways to fund its existence.

The contract between HMRC's Valuation Office Agency and Rightmove, states that Rightmove is bound by the Official Secrets Act and all its staff must sign a confidentiality agreement.

Rightmove keeps data on 16 million properties, and added 3.3 million records to its files in December.

Eric Pickles MP, the Tory shadow secretary of state for local government, said:

"The public will be alarmed that detailed information on 9 out of 10 house sales and rentals are secretly being passed from estate agents to tax spies without the public's knowledge or agreement. This is a shocking sign of the growing surveillance state under Gordon Brown."

The government claims that the contract was simply part of its efforts to keep records up to date.

They would say that wouldn't they?

The solution for the taxpayers of Britain is to boycott Rightmove. That will kill off this contract pdq.

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