HMRC To Accept Online Complaints

As from this Autumn (theoretically) taxpayers will be able to send HMRC complaints online.

Our ever efficient and competent government has declared its ambition to be “one of the most digitally advanced tax administrations in the world”.

Currently people who contact the Adjudicator’s Office to make a complaint against HMRC or the Valuation Office Agency (VOA) can only do so currently by post, telephone or fax.

The FT reports that Nicky Morgan, chair of the Treasury select committee, wrote to HMRC this month expressing astonishment that the public were unable to contact the Adjudicator’s Office by email. In response to her letter, Jim Harra, second permanent secretary and deputy chief executive of HMRC, promised to provide an email address for the Adjudicator’s Office by the autumn.

He blamed HMRC’s prioritisation of leaving the EU for the delay in digitising the department’s complaints process.

Prediction: the system will crash within hours!

Tax does have to be taxing.

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Adjudicator Backlog of Tax Cases

The Mail reports that the Adjudicator's Office, which rules on HMRC complaints, has a backlog of 1,028 cases. 

It settled just 970 in 2015-16 — half the 1,850 that were dealt with the year before.

The adjudicator said that while more than half of cases were dealt with in six months, and most within a year, 66 waited for more than a year. 

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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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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Complaints To HMRC Soaring

Right then moving on from yesterday's cock up, where I went back in time and published an article from 2003, I am trying to be a little more up to date and write about something happening in 2016!

It seems that complaints to HMRC have almost reached their highest level since 2008/09, according to data obtained by Saffery Champness through a Freedom of Information Act request

According to Saffery Champness, HMRC handled a total of 81,066 complaints in 2015/16, over 7,000 more than the previous year (73,646) and an increase of more than 16,000 on 2013/14 (64,313).

This is the closest the figure has gotten to the record high level of 83,917 complaints in 2008/09 during the financial crisis.

The volume of complaints upheld also increased steadily from 2008/09 to 2015/16 with over half of complaints partially and fully upheld last year, compared to 37% in 2012/13.

James Hender, partner and head of the private wealth group at Saffery Champness, is quoted by economia as saying that HMRC “has bitten off more than it can chew”.

“By cutting back resources and rolling out a complex digital system at the same time, taxpayers and businesses have been left with real concerns and grievances; the numbers speak for themselves.”

Hender said suspicions could be raised that “frontline staff are being dragged away from their day jobs to deal with the ever growing mountain of complaints received”.

Lucy Brennan, partner at Saffery Champness, said:

“Over three million taxpayers used an online personal tax account this year and, with HMRC aiming to go fully digital by 2020, more and more people are coming into contact with the new digital services and are inevitably coming up against obstacles.”

Brennan added:

“As HMRC has sought to get to grips with its new strategy, many taxpayer services have been withdrawn, guidance on key issues such as on non-dom policy has been largely absent and Making Tax Digital itself has already faced significant delays.

Ironically, there is also the possibility that in seeking such large quantities of data, the administrative costs of the rising number of complaints and investigations will cost HMRC more, rather than raising additional revenue more efficiently.”

No surprises there then!

Tax does have to be taxing.

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Complain about HMRC

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Phone

Income Tax

• Telephone: 0300 200 3300

Call to complain about the service HMRC has provided relating to Income Tax.

Find out about call charges

Opening times:

8am to 8pm, Monday to Friday
8am to 4pm Saturday
Closed Sundays and bank holidays

Best time to call:

Phone lines are less busy before 10am, Monday to Friday

Tax credits

• Telephone: 0345 300 3900

Call to complain about the service HMRC has provided relating to tax credits.

Find out about call charges

Opening times:

8am to 8pm, Monday to Friday
8am to 4pm Saturday
Closed Sundays, Christmas Day, Boxing Day and New Year’s Day

Best time to call:

Phone lines are less busy Tuesday to Thursday between 8.30am and 10.30am, and 2pm to 4pm.

Self Assessment

• Telephone: 0300 200 3310

Call to complain about the service HMRC has provided relating to Self Assessment.

Find out about call charges

Opening times:

8am to 8pm, Monday to Friday
8am to 4pm Saturday
Closed Sundays, Christmas Day, Boxing Day and New Year’s Day

National Insurance

• Telephone: 0300 200 3500

Call to complain about the service HMRC has provided relating to National Insurance.

Find out about call charges

Opening times:

8am to 5pm, Monday to Friday
Closed weekends and bank holidays

Best time to call:

Phone lines are less busy after 1pm.

Child Benefit

• Telephone: 0300 200 3100

Call to complain about the service HMRC has provided relating to Child Benefit.

Find out about call charges

Opening times:

8am to 8pm, Monday to Friday
8am to 4pm Saturday
Closed Sundays, Christmas Day, Boxing Day, and New Year’s Day

Best time to call:

Phone lines are less busy between 8am and 11am, Wednesday to Friday.

VAT

• Telephone: 0300 200 3700

Call to complain about the service HMRC has provided relating to VAT.

Find out about call charges

Opening times:

8am to 6pm, Monday to Friday
Closed weekends and bank holidays

Best time to call:

Phone lines are less busy between 8am and 11am, Monday to Friday.

Employers

• Telephone: 0300 200 3200

Call to complain about the service HMRC has provided relating to support for employers.

Find out about call charges

Opening times:

8am to 8pm, Monday to Friday
8am to 4pm Saturday
Closed Sundays, Christmas Day, Boxing Day and New Year’s Day

Best time to call:

Phone lines are less busy between 2pm and 4pm.

There are different contact points if you want to complain about HMRC online services or complain about serious misconduct by HMRC staff.
If the area of HMRC you wish to complain about is not on this page then contact the relevant helpline from the Contact HMRC page.

Post

Write to HMRC if your complaint is about Income Tax or Self Assessment.

PAYE and Self Assessment Complaints

HM Revenue and Customs

BX9 1AB

United Kingdom

Write to HMRC if your complaint is about National Insurance or employers.

NIC and EO Complaints

HM Revenue and Customs

BX9 1AA

United Kingdom

You don’t need to include a street name, city name or PO box when writing to these addresses.
If your complaint is about another subject send a letter to the address shown on any papers HMRC have sent you. Mark the envelope “Complaint”.
Couriers should use a different address.

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.

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 Overloaded?

HMRC no longer provide PAYE payment schedules, this practice stopped some years ago.

As per Accountingweb, HMRC said:

"Routine provision of PAYE payment schedules stopped several years ago, bringing PAYE into line with other taxes, because it was not sustainable to continue due to an increasing number of requests.

This change in approach was introduced in April 2011 and announced through Employer Bulletin Issue 38 (page 21) and subsequently incorporated into our guidance (DMBM520287), which can be accessed on the HMRC website at which is available to customers at DMBM520287, which can be accessed at: debt and return pursuit: PAYE: payment schedule requests: background." 

Guidance provided by HMRC included:

• Customers are required to maintain their own records from which relevant information can be extracted
• Additionally, the Business Tax Dashboard was introduced for the use of customers and presented another means for them to find what payments had been received and how these were allocated
• Using these two sources resolves the majority of issues, but where exceptionally this doesn’t and a customer needs help with locating a limited number of payments, then the Revenue will provide assistance.

Now this may be all very well and dandy, if HMRC do honour the third bullet point and help when things get in a muddle. Except that, according to Nichola Ross Martin, HMRC does not help out under such circumstances.

Ross Martin made an error when paying HMRC through online banking. She accidentally left out part of a PAYE reference where amounts were allocated to the previous year and to ‘suspense’.

HMRC’s debt management and banking team then contacted her about alleged underpayments, but refused to provide a list of payments received. She was unable to see which payments were lost and work out why that had happened.

On attempting to get in touch with both the debt management and banking team, and the PAYE team, she was passed back and forth.

The debt and banking team "would not admit" that she had overpaid 2013/14 because they tried to allocate her month one payment back to 2012/13. They then asked for the money for 2013/14.

"Why will HMRC not provide a schedule of the payments that they receive?" 

Methinks that the number of queries being received by HMRC along these lines have overwhelmed the system; ie it cannot cope.

Have any loyal readers had similar experiences?

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"

Complain To Your MP

The ICAEW Tax Faculty has urged people not to be afraid to complain to HMRC about problems, and goes on to advise that people should also raise issues concerning HMRC with their MP as well.

I fully concur, and have been advising loyal readers who write to me with their problems to raise them with their MPs; as it is the politicians who are ultimately responsible for the complexity of this country's tax system and the disaster that is HMRC.

Specifically the Faculty states that it has had reports from its volunteers and members that incorrect liabilities on HMRC employer PAYE accounts are an increasingly common problem, and many of these cannot be solved by software suppliers.

Some of these have arisen because:

• RTI returns or other notifications or payments to HMRC have not been processed correctly, or indeed at all 

• Employee records have been duplicated 

•  Amounts have been reallocated without reference to employer or agent.

There are also difficulties interpreting what is shown on HMRC’s Business Tax Dashboard (alias Liabilities and Payments Viewer – available only to employers, not their agents). Hours have been wasted on the phone to HMRC trying to sort things out or even negotiate with bailiffs collecting apparent PAYE debts that are not due.

The Faculty states that if you recognise any of this, you will be aware that this takes time, and time is money. Interestingly, and ironically in the light of events, the impact assessment published alongside Budget 2012, which has not been updated, estimated that RTI was supposed to save employers more than £300M per year.

"ICAEW and other representatives of employers, pension payers, payroll agents, bureaux and software developers and HMRC are working hard to try to resolve PAYE RTI difficulties by way of a joint task force. HMRC is publicising updates on its What’s New webpage.

Given the current problems surrounding RTI, it seems timely to remind employers and their agents at the coal-face about how to complain to HMRC and seek financial redress.

Please see the Tax Faculty’s TAXTools 4 - Making complaints to HMRC for more details and help on how to make a complaint.

When reclaiming additional professional fees, the employer/client should supply HMRC with a receipted fee note. To help clients’ cash flow, we suggest that agents bill separately for such additional costs and the client pays by cheque, which is then banked by the agent once the employer/client receives reimbursement from HMRC.

For PAYE RTI problems, write to HMRC at the following address:

Customer Operations Employer Office
BP4102 
Chillingham House 
Benton Park View 
Newcastle Upon Tyne 
NE98 1ZZ

Complaining to HMRC does not stop you writing also to your MP, should you wish. Your MP can draw the fact that all is not well with RTI to the attention of the relevant Minister.

As a general point, agents can register with an HMRC Agent Account Manager (AAM) to pass through comments and get a helping hand. For details of what AAMs can do and how to register see HMRC’s guidance Agent Account Managers (AAMs) in HM Revenue & Customs. 

However, while AAMs will work with agents to resolve client-specific problems, the Agents' Issue Resolution Service does not replace HMRC’s process for formal complaints, which agents should use first." 

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.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

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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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Increase In Complaints About HMRC

It seems that over the past year, complaints made by taxpayers (or is it "customers"?;)) to HMRC have increased dramatically.

One of the reasons for the “unprecedented” increase appears to be a surge in complaints about Pay As You Earn (PAYE); mainly relating to errors in tax codes issued between 2008 and 2010 that caused a large number of underpaid/overpaid taxes.

The Annual Report (year ended March 2013) by the Adjudicator’s Office (which handles complaints from dissatisfied "customers" who have already tried to complain to HMRC, the Valuation Office Agency or The Insolvency Service), when referring to HMRC, said (page 12):

"During 2012-13 we received 1331 new complaints about a range of taxation issues. This was an increase of 107% on 2011-12 and accounted for 52% of the total number of complaints received. We resolved 525, upholding 55% either partially or substantially. Our investigators mediated 15% of cases directly with customers and the department. A large number of the taxation cases reviewed related to PAYE and were considered under the provisions of HMRC’s Extra Statutory Concession A19 (ESC A19)."

In the summary the reports notes the following increases in complaints:

"The increase has all been from HM Revenue & Customs (HMRC) customers; including PAYE complaints up by 347% and Tax Credit complaints up by 59% on the numbers received in 2010-11."

Judy Clements, the adjudicator, said it has identified a number of areas at HMRC where there are “systemic failures”, resulting in poor complaints handling.

“Most notably it is disappointing that for the third year running I have seen a range of cases where specific customer needs have not been recognised or addressed. I am unable to establish whether complaint handlers are not recognising the customer need or feel they are not empowered to step outside of procedures and provide alternative support.”

She notes:

"I am disappointed at the number of complaints HMRC customers feel they need to refer to me in order to get resolution. My role should be to consider the difficult exceptions, not handle routine matters that are well within the capability of departmental staff to resolve successfully. At a time of austerity it is also important to note that the cost of dealing with customer dissatisfaction increases exponentially with every additional level of handling."

Wise words indeed!

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"

How To Complain To HMRC

How to complain to HM Revenue & Customs

• Make a complaint to HM Revenue & Customs
• Tax credits - how to complain
• How to complain to the Child Benefit office

What to do if you disagree with an HMRC decision

• Appealing against a tax credit decision
• Appealing against a Child Benefit decision
• How to appeal against a direct tax decision
• How to ask HMRC to review an indirect tax decision
• Appealing a decision where Customs have seized something from you

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 Taxwise.

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 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"

PAYE Complaints Rise

It seems that the PAYE problems of 2008-10 continue to give HMRC a headache.

Accounting Web reports that complaints to the Adjudicator about HMRC payment claims have more than doubled in 2011-12.

Overall, the number of complaints about HMRC rose 32%, but HMRC's intransigence in blocking requests for underpayments to be written off under Extra Statutory Concession A19 contributed to a 114% increase in PAYE complaints in the latter half of the year.

“We expected an increase in complaints following the introduction of the new PAYE computer system due to the high level of customer interest,” wrote Judy Clements, in the forward to her Adjudicator’s annual report. 

	Cases awaiting investigation	New cases for investigation	Cases resolved
April 2012	992	1,606	1,133
April 2011	2,041	1,235	2,284

The Adjudicator also noted a significant rise in the percentage of complaints upheld against HMRC during the year. Out of 494 taxation-related complaints received, 197 were partially or substantially upheld - a success rate of just under 40% compared to 23% in 2010-12.

As I noted in July HMRC is now consulting on watering down the A19 concession.

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"

Complaints Up 113%

It seems that, according to UHY Hacker Young, complaints upheld against HMRC have risen by 113% in the last 2 years.

The Adjudicator's Office upheld 446 cases in 2010, 229 in 2009 and 108 in 2008.

Roy Maugham, tax partner at UHY Hacker Young, is quoted by the FT that the increase was a result of "deteriorating levels of service at the Revenue..The level of service is a huge concern..Even getting a response to a simple letter of inquiry can now take months."

Phil Berwick, director of tax investigations at law firm McGrigors, believes that this is but "the tip of the iceberg...

There are many more people who feel aggrieved but who don't want to take matters up with the Revenue".

He added:

"There have been significant cuts at HMRC over the last few years.

And it's not just a numbers problem – the people they are losing are also the most-experienced people. This is a recipe for disaster."

Patrick O'Brien, a spokesman for the Revenue, said that only "a tiny fraction of a per cent of those customers find it necessary to go to the Adjudicator".

So that's alright then:)

Tax does have to be taxing.

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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"

Debt Collection

My thanks to a loyal reader who pointed me to Accounting Web, which published a query submitted by a tax agent on behalf of a client who had received a visit from a "very aggressive" HMRC debt collector.

One of the responses to the query gives step by step advice on what to do if faced with this situation, and I have published it unedited as it may be helpful to others:

Query:

"In May of this year a client submitted their P35 to HMRC, but missed off the box 28 figure, CIS deductions suffered. They then realised their mistake and asked us what to do. We sent in an amended P35 and covering letter for them, explaining what had happened and showing the CIS deductions correctly (this was in July).

A few weeks ago, they received a demand from HMRC for the amounts owing. They rang HMRC and explained the situation and we also rang them and was told "we are 3-4 months behind with the post".

On Friday, they received a visit from a very aggressive debt collector demanding assets or a cheque for the amount thye think is owed. It was explained to them that an amended P35 had been submitted and we were awaiting processing of this.

She claimed that to be "nonsense" and that she "wanted their money now". In the end she has given 7 days "grace" to get the revised return processed. We faxed a copy to the employers unit on Friday afternoon and have called them this morning. They cannot promise that it will be processed in time at all.

Where does this leave us? We have the PAYE team way behind with their work and the debt collectors threatening to seize assets if their own people don't process by the end of this week!

Is there anything we can do to either call off the debt collection or push through the amended P35 more quickly?"

One of the responses from an AA reader:

"1) File an immediate formal complaint. Make the complaint by telephone and confirm in writing.

2) Contact the relevant Debt Management Office and file a complaint regarding the disgraceful and utterly unacceptable attitude displayed by the officer who called.

3) Instruct your client NOT to open the door to these clowns - without a court order they have no powers to force entry or to seize goods, and if they refuse to leave when told to they are open to arrest.

4) Point out that by demanding monies which they know, or ought to know, are not due they are committing offences under s40 of The Administration of Justice Act 1970, and, under s2 of the Protection from Harassment Act 1997.

5) For a small fee your local County Court given proof that these monies are not owed, and that HMRC are acting without even opening their post and processing mail before acting, will grant an ex parte emergency injunction against HMRC forbidding them from continuing with collection until the returns etc have been properly processed.

6) Once HMRC confirm that no tax is actually owed, file proceedings on behalf of the client for damages and compensation for distress caused, and for your own costs in the case, keeping the total claim to less than £5,000 as this keeps it in the small claims court (fast track)."

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"

No Longer Fit For Purpose

The Institute of Chartered Accountants of Scotland (ICAS) have just published a survey (conducted in August and September 2010) of ICAS members that shows a drastic deterioration in the facilities for contacting HMRC. These findings are also reflected in a new National Audit Office (NAO) report entitled 'Engaging with Tax Agents'.

"Poor communications account for 43% of HMRC's systemic errors and shortcomings reported by the survey respondents (compared with only 13% in a similar survey in March 2009), and 71% of these are considered 'more serious than a year ago'.

Derek Allen, Director of Tax at ICAS, said:

'Facilities for contacting HMRC have deteriorated drastically in the past year. Phone calls to HMRC help lines go unanswered.Letters sent to HMRC lie unopened for weeks – sometimes months. Many HMRC staff seem ill-equipped to perform their allotted roles, and technical tax questions are commonly passed from pillar to post. Urgent action is needed to simplify the tax regime and give more help to those trying to comply with their fiscal obligations.'

The administration of PAYE also attracts criticism, accounting for 15% of the matters reported (up from 11% in 2009), and 72% of these are considered more serious than a year ago.Many other concerns are raised by respondents, including difficulties with online filing and unreasonable delays in obtaining tax repayments.

Welcoming the NAO report's recommendations on how HMRC and tax agents could work together more closely to improve tax systems and services, ICAS notes the NAO's conclusion that the proportion of tax understated in returns submitted by agents was broadly one third of that where there was no agent involvement – finding it paradoxical that this has been used to suggest that returns for represented taxpayers are more likely to have under-declarations of tax than returns filed by non-represented taxpayers.

Derek Allen summed up:

'The problems raised by our member survey cover a wide range of issues and demonstrate that the over-complicated tax system we have is no longer fit for purpose. We hope our survey report can be used by HMRC to supplement the NAO report, helping identify weaknesses in HMRC's processes for administering the tax system and encouraging them to remedy these.

We also hope that, in looking to maximise value for money, HMRC will implement the NAO's recommendations on extending tax agents' involvement to provide further support to HMRC's tax compliance processes, whilst achieving cost reductions for HMRC and increased efficiencies for agents.

In considering the important role played by tax agents, we are disappointed that the NAO has drawn no distinction between members of professional bodies such as ICAS and those without qualifications. Unlike those that are unqualified, our members in practice adhere to a strict code of professional conduct, undertake continuing professional development, and are subject to stringent quality assurance reviews – all designed to maintain the highest professional standards among our membership.'"

The ICAS report can be downloaded here Systemic errors in tax administration.

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"

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.

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"

Meltdown III

The Telegraph reports that up to 100,000 people may have paid too much tax, as a result of the ongoing tax coding problems arising from the new HMRC computer system.

The newspaper quotes a memo sent to tax organisations by David Ellis, from HMRC's Business Customer Unit:

"Our contact centre has received roughly 50,000 calls about this matter and has estimated that there could be up to 100,000 people affected in total.

If you receive any enquiries from your employees or pensioners about this please ask them to contact us in the usual way."

Good luck to those who are trying to get through to a call centre to correct their codes.

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"

Meltdown II

Yesterday's article about the meltdown going on at HMRC seems to have stirred up a few loyal readers, as there have been a number of "heated" comments posted.

One comment that did catch my eye, in particular, was this one from an anonymous (I assume) member of HMRC.

"Muppets? If the people employed by private companies ie accnt asd book keepers knew what they were doing the "Customer Service" contact centres wouldnt be so inundated with other calls and we could deal with this mess ... caused by our PRIVATE SECTOR IT supplier. But people on here would rather blame the civil servants who have a very limited right to complain back due to impartiality etc."

Disregarding the blame being laid at the door of the taxpayer for not knowing how the tax system works, the very interesting/relevant point being raised is that the blame should be laid at the door of the IT supplier (I will also disregard the anti private sector invective, given that if there were no private sector there would be no taxes to support the public sector).

HMRC have publicly stated that the problem has occurred because the old systems contained several data sets that were not compatible when merged in the new system, and that this is a one off problem that will work its way through.

That does not sound like it to be the IT supplier's fault, but more of a case of lack of testing (which I would assume was the responsibility of HMRC who should have been driving the systems upgrade process)?

However, on the assumption that it is the IT supplier's fault my question is this:

What are HMRC going to do about it?

I assume that the contract with the particular IT supplier has penalty clauses for such issues, on this basis will HMRC be making a claim for restitution?

Were the contract not to have such a clause, then one could argue that HMRC did not negotiate a very good deal on behalf of the taxpayer.

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

Dispute Resolution II

As per HMRC:

"HMRC looks back at the first nine months of the new review process

On 1 April 2009 HM Revenue & Customs (HMRC) introduced a new optional internal review process. Although the new system is still in its infancy, this seems a good time to take stock and to update people on progress.

HMRC worked closely with external stakeholders in the development of internal review and this publication reflects our continuing commitment to openness."

"Outcomes excluding penalty cases 3,443 cases out of 18,526
Upheld: review complete – 2,603 (76 per cent)
Deemed Upheld: time limit expired – 20 (1 per cent)
Varied – 349 (10 per cent)
HMRC decision cancelled - 471 (14 per cent)

Outcomes penalty cases 15,083 cases out of 18,526
Upheld: review complete – 6,281 (42 per cent)
Deemed upheld: time limit expired – 48 (0 per cent)
Varied – 793 (5 per cent)
HMRC notice cancelled – 7,961 (53 per cent)"

For clarity:

- 24% of non penalty cases were varied or cancelled
- 58% of penalty cases were varied or cancelled

The results clearly show that it is in the interests of the taxpayer (where there is reason to doubt HMRC's assessment) to complain.

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"

HMRC's Coding Enigma

It seems that HMRC's shiny new NIC & PAYE system (NPS), heralded as a major step forward by HMRC, isn't working terribly well.

What government managed IT project ever works "terribly well"? (Delete the word "well" from the previous phrase and you have the reality).

For reasons that only a computer would know, the HMRC database has "misplaced/lost" the information it is meant to contain about people leaving jobs.

The result?

The system is combining taxpayers' current employment records with old data, thus creating additional wealth and income which doesn't exist. This causes the system to calculate incorrect personal allowances and thus issue incorrect tax codes (which are of course used by employers to deduct tax).

How many people is this screw up affecting?

HMRC is issuing approximately 25 million tax coding notices this year, that is double the amount issued in the previous year. Therefore, it is not unreasonable to assume that several million taxpayers may be adversely affected by this.

Taxpayers need to be more than vigilant this year, when they receive their coding notices, and ensure that where there is an error that they notify HMRC immediately.

Quite how long it will take HMRC to rectify these errors remains to be seen.

Enigma - Sadeness

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"

HMRC's Definition of ASAP

HMRC's recently launched charter promises to "put mistakes right as soon as we can".

What does "as soon as we can" actually mean?

One month?

No!

Two months?

No!

Six months?

No!

HMRC in fact seem to regard "as soon as we can" as being a "paltry" 13 months!

The figures come from the adjudicator's office, which handles complaints against HMRC.

That is the average time (some hapless self employed taxpayers are in fact having to wait up to 18 months) it now takes HMRC/the adjudicator to communicate to taxpayers the outcome of complaints against HMRC.

The appalling lag in communication appears to be down to a rise in complaints about tax credit awards, and staff shortages.

There is a solution for taxpayers, caught in the bureaucratic mire of HMRC and the adjudicator's orifice, build a Tardis and travel to the future to find out the result of the case.

Would the cost of such a capital investment be tax deductible I wonder?

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 - PC Seizure

Source Accounting Web:

"We are currently acting for a client who had her computer, mobile phone and fax machine removed by officers of HMRC in February 2009 during a 'routine' visit. This is contrary to HMRC powers which states that they are allowed to download material from the computer but not physically remove it. The computer was returned after our representation albeit in a damaged state. HMRC, of course, deny responsibility. HMRC also uplifted our client's records which have not been returned nor have copies been received despite our request for copies which was made in March 2009.

We made a formal complaint to HMRC Complaints Unit in May 2009 and received an acknowledgement to say we would have a reply within 15 days.

We have just received a further letter, 23 June 2009, from the HMRC Complaints Team which states 'unfortunately I am unable to give you a date by which you can expect a response as we have a number of cases awaiting investigation at the moment and it is difficult to say how long it will be before a caseworker will be allocated your case'.

I don't think I need to say any more about HMRC powers!

Malcolm McFarlin"

HMRC have a forum to monitor the implementation of their new powers. However, it is chaired by Dave Hartnett and has on it members of HMRC (albeit not in the majority).

How can this forum act independently, and objectively, if it is populated with members of HMRC?

Tax does have to be taxing.

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"

Judge Judy

Congratulations to Judy Clements OBE, who has recently been appointed by Mike Clasper Chairman of HMRC to take over from Dame Barbara Mills as Adjudicator from 20th April.

The role of the Adjudicator is to provide an "independent investigation of complaints that HMRC are unable to resolve".

How can the Adjudicator fulfil that independent role if the Adjudicator is selected and appointed by HMRC themselves?

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"