HMRC Data Breach - “They Are, at Present, Utterly Useless on Every Level on Every Tax.”

 

Last week, AccountingWEB user Cholmes first reported receiving five late penalty notices from HMRC – with only one of the five regarding their clients. The remaining notices were addressed to two other firms.

The AWEB community has been reporting these incidents for the past week, with many unsure of what to do with the notices received. Some were hesitant to forward the notices to the correct agents in fear of potential data breaches.

When Cholmes got through to HMRC after being put on hold for 40 minutes, the helpline operator seemed “disinterested” and surprised that this member had even called: 

“The only suggestion given was to return the penalty notices to HMRC.

When I asked why I had received them, I was told she didn't know and couldn't comment. No other suggestions offered nor any apologies offered.”

AccountingWEB member Blazefan also reportedly received six late filing penalty notices in a single envelope, only two of which were for their clients. The notices contained the name and address of the practices, the name of their clients, and the clients’ UTR.

Blazefan copied the incorrect notices and returned them to HMRC with a covering letter, and forwarded the copies to the correct accountancy practices: 

“I have not as yet received a response from HMRC, however the other practice has thanked me for forwarding them on.”

HMRC's agent forum has seen further complaints; Catherine Newman received a report from a member of the community who was sent six late filing penalty notices, five of which were sent in error.

HMRC’s response

AccountingWEB approached HMRC about the stories shared on Any Answers and the agent forum and was told: 

“HMRC takes its responsibilities under UK GDPR very seriously. The vast majority of privacy notices will be issued and received correctly, but if any agents receive notices or any correspondence for wrong clients, we would ask that they notify HMRC to enable us to investigate why it happened and take appropriate action.”

It was then highlighted to HMRC that many agents are unable to get through to them or are not getting a sufficient response. The spokesperson could offer no additional information but confirmed that HMRC is aware and would be looking to contact the agents.

VAT director Jason Croke summed HMRC up perfectly: 

“They are, at present, utterly useless on every level on every tax.”

Tax does have to be taxing.

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No Record of 10,000 Lost Counter Avoidance Files

At the beginning of March I raised an FOI with HMRC over the loss of 10,000 counter avoidance files in 2014.

They have responded thusly:

"Following a review of our records, I have established that HMRC does not hold the
information you requested. 

There is no record of any data losses in Counter-Avoidance Directorate reported to the scale referenced in your request."

A well worded response ;).

Tax does have to be taxing.

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NAO Response Re Lost 10,000 Counter Avoidance Files

I have just received this response from the NAO's Director HMRC Value for Money, wrt my email to them concerning the lost 10,000 counter avoidance files.

 "Thank you for your email of 6March, in which you asked whether the National Audit Office was aware of the loss of 10,000 counter-avoidance files of high net worth individuals by HMRC in 2014. You provided a link to your Freedom of Information request to HMRC on the topic, in which you asked HMRC for further details on the nature of the alleged incident. I am replying to your message as the NAO Director with responsibility for the audit of HMRC’s performance.....

As was the case in 2014, there is currently no formal requirement for HMRC to inform the NAO of data breaches, such as the one you refer to in your email.In 2014 HMRC would have had to comply with the requirements of the Data Protection Act 1998 which specifies roles and responsibilities and any reporting requirements. The Act did not require Departments to report breaches to the NAO.....

Although there is no formal requirement to notify the NAO of data breaches, we do, however, expect to be made aware of any breaches that have occurred through our annual financial audit of HMRC. As part of our financial audit, we review papers and minutes from HMRC's Board, Executive Committee and Audit Committee. We also review the disclosures in HMRC's Annual Report.3The data-related incidents which HMRC reported in its Annual Reports in 2013-14 and 2014-15 are outlined in the table below.4HMRC did not make reference to the alleged incident which you have raised, and our review of minutes for the 2013-14 and 2014-15 financial years did not identify any information which was inconsistent with the incidents as reported...."

Tax does have to be taxing.

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Missing Counter Avoidance Files - DataGate II ?

Rumours appear to swirling on the net that back in 2014 there was a "mini" DataGate (DataGate II) in HMRC relating to lost counter avoidance files.

In the public interest I have submitted an FOI, which you may read here.

Tax does have to be taxing.

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HMRC Challenged Over Data Sharing

An EU national is challenging HMRC over new rules that require tax authorities around the world to automatically exchange information on millions of their citizens who live abroad. In a complaint to the UK’s data protection regulator, the EU citizen said the common reporting standard — a key measure against tax evasion developed by international experts that is now being gradually introduced by more than 100 countries — made her personal information vulnerable to cyber hacking or an accidental leak.

In her complaint against the common reporting standard to the UK Information Commissioner’s Office, the EU citizen said the exchange of information required by the rules will expose her to “a disproportionate risk of data loss and potentially hacking”.

She is quoted by the FT:

“This risk has crystallised recently in light of incidents in which HMRC has lost data concerning UK taxpayers and recent data breaches concerning UK banks.” 

Her complaint cited how HMRC had lost the personal records of 25m taxpayers in 2007, as well as a media report in 2017 outlining how the tax authority’s website was vulnerable to cyber attacks. HMRC subsequently took action to fix the weaknesses.

HMRC declined to discuss the case but added:

“HMRC shares some personal data with overseas tax authorities to ensure that the right tax is being paid. HMRC only ever shares information when it’s entirely lawful to do so. This includes complying with applicable GDPR requirements.” 

The fact is data is vulnerable to hacking, even when the data is stored by "reputable/professional" organisations!

Tax does have to be taxing.

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HMRC Published Confidential Details On Web Without Permission

Oh dear it seems that private details of a number of childminders, including home addresses, have been published in error on HMRC’s Childcare Service website.

The details, which have since been removed from the website (which providers and parents must access for Tax-Free Childcare and the 30 hours) appeared on its 'Search for a Childcare Provider' page, despite the fact childminders had not given their permission for the data to be published.

HMRC removed the facility from their website to correct the error, following complaints from affected childminders.

A spokesperson for HMRC is quoted by NurseryWorld:

"We have temporarily closed the childcare provider checker, as there was an issue with the system. Our suppliers – NS&I and Atos – are working to rectify this and will re-open the childcare provider checker once it is working as it should. Parents and providers can continue to apply through the service."

Neil Leitch, chief executive of the Pre-School Learning Alliance, was unimpressed:

"It is completely unacceptable that confidential childminder data, including details of home addresses, was published on the Childcare Service website, and those affected are absolutely right to be angry at this breach of privacy.

While we recognise that HMRC is now working to resolve this issue, it never should have happened in the first place, and it certainly shouldn’t have taken so long for HMRC to finally acknowledge that something had gone seriously wrong.

With Tax-Free Childcare already in effect, and just two months until the roll-out of the 30-hour offer, we are still receiving regular reports of problems with the Childcare Service website from both parents and providers. This simply isn’t good enough. Government needs to get a grip on this policy and fast, and so we hope HMRC will be looking to review and address these ongoing issues as a matter of priority."

I thought HMRC always claimed that it zealously protected taxpayers' privacy??

Tax does have to be taxing.

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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.

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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.

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Datagate Returns - HMRC leaks Applicants' Details

Those of you with long memories will know that HMRC has form wrt breaches in data security (eg Datagate).

It should therefore come as no surprise to learn that there has been yet another data breach, this time affecting those who have applied for jobs within HMRC.

The Register reports that HMRC is spewing job applicants' email addresses to potential rivals in mass circular responses.

Apparently there has been "a technical glitch"!

A reader got in touch to report their email address had been circulated to all other applicants in three instances.

In an email seen by The Reg, the reader's address was included in a list which included nearly 500 other addresses.

Responding to the applicant's complaint, HMRC recruitment said:

"Please accept my sincere apologies for my previous email, sent today. Unfortunately, there was a technical glitch resulting in a confusing email.

This is not how we would have wished to communicate the outcome of the process and we will obviously like to rectify this moving forwards.

If you would like to discuss your application further, please do not hesitate to contact me."

An HMRC spokesman said:

“This email was sent out by a third party acting on our behalf. No other personal data was displayed and we have told the agency to ensure that the technical problems that they experienced do not recur."

Lame!

Please let me know if you know of other instances where HMRC data has been leaked.

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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HMRC Trawls The Net

As I have noted several times before on this site, HMRC are keen to identify people who are trading (goods and services) on the internet but not declaring their profits.

As such it should come as no surprise to learn that HMRC intend to up their game wrt collecting data on who is trading but not declaring that they are trading. HMRC are of the view that the hidden economy of internet trading could be worth £5.9BN in uncollected tax each year.

HMRC has launched a consultation on extending its powers to collect extra data from firms and individuals.

"Data can be particularly powerful when it is collected from third parties who facilitate trade, either between businesses, or between businesses and consumers.

This is because they can provide information in bulk about the activity of large numbers of traders, and because third party data can be used as an independent check against the data that taxpayers themselves report to HMRC."

The extended powers would affect businesses acting as intermediaries or providing electronic payment services.

"It is important that the data - gathering powers are proportionate. This means that the administrative burden placed on the intermediary business when preparing and providing the data must be commensurate with the benefit from using the information obtained. HMRC expect that in the scenarios described in this consultation document the administrative burden will be relatively small. HMRC would provide guidance and give support to ease the process."

In theory whatever happens in the future, wrt new payment methods will be covered by the legislation:

"HMRC propose s that the legislation is “future - proofed” so similar data can be requested from new business models as they emerge."

Theoretically HMRC will not target individuals who sell personal possessions, only businesses that fail to pay tax owed.

Those who were tax compliant "should see little or no impact".

The consultation runs until 14 October.

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?

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To find out more, please use this link Solar Tax Investigation Insurance



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HMRC Loses Tax Records

Those of you with long memories will recall datagate 2007, when HMRC lost data records of around 25 million people.

Stepping forward to 2015 and HMRC have managed to lose some more data (not of 25 million people, but data of one person). Unfortunately for HMRC the data they lost is that relating to David Savil who is an accountant and head of Bishop Fleming a business services firm.

Mr Savil (who has not moved home for 17 years) received a letter from HMRC telling him that HMRC was "unable to trace" his records.


He is quoted by Accountancy Age:

"Having paid considerable sums in tax every year for three decades, and not having moved home for 17 years, I could not believe that HMRC has managed to lose my tax record.

Despite the millions of tax assessments that they get wrong each year, HMRC has been seeking the power to grab funds from our bank accounts. I'm an accountant, so I've been ardent in providing HMRC with my tax submissions every year. But, somehow, they've managed to lose track of me on their radar screen.

If they can make so simple an error in my case, it underlines my belief that they should not be permitted to have their proposed power to grab money from the bank accounts of tax-payers that they decide have under-paid."

HMRC has been asked for comment.

Does anyone have any viable theories as to how long standing tax records can simply vanish like this?

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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Mike Potter - The Perfect Fit For HMRC

My thanks to a loyal reader who posted the following about Mike Potter (HMRC's new Digital Transformation Director):

"This would not be the same Mike Potter who was programmes and projects director at the Rural Payments Agency from 2007 to 2009.

Readers may be interested to know that in his time there the Agency was involved in a Farm payment fiasco could cost the taxpayer £620 million

Farm Payment

Under his watch the IT department also apparently managed to lose CDs and tapes containing the personal information of around 100, 000 farmers including bank details, addresses and security passwords

Lost Records

Should fit in perfectly with Homer's term of all the talents."

It does indeed seem that Potter will fit right in!

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 Heads For The Clouds

As part of HMRC's strive to reduce its overheads, it will transfer its print and servers to a centralised storage solution provided by Skyscape and head for the "clouds".

Andrew Bull, director of delivery and operations in information services at HMRC, speaking at the Cloud World Forum held in London Olympia is quoted by Computing:

"We've got a lot of physical offices in the UK and each one of those has a print or file server, providing local print services. A lot of the time printers start acquiring other services as well - like being used for distribution purposes and file sharing. The file and printer servers were last refreshed in 2006 and they are now coming to the end of life, and the back-ups are becoming more problematic as the hardware fails."  

The issue of lost office hours due to file and print server failures also had a bearing on HMRC's decision to head for the clouds:

"We could see [the amount of failures] going up, even in proportion to other areas such as network connectivity.

One surprise was the amount of power consumed in local communications rooms, largely because of file and print servers. The tape drives overheating meant that we needed air conditioning, which is inefficient and costs a lot to run." 

HMRC is moving the servers to a centralised storage solution. It has put in a local infrastructure server but it is no longer mission critical, as if it fails, HMRC can still access the printers as it is connected directly to the Public Services Network (PSN).

In theory the savings in energy consumption alone will come to £750K per annum, plus there will be no need to transport back-up tapes offsite, enabling HMRC to save costs on a secure courier service and eliminating the risk of another datagate.

Well then, this all appears to be under control and is being well managed and implemented.

However, as per this quote from Barry Murphy technology partner at PwC, that I referred to in September 2012:

“Getting the technology in place is just the first leg of the process.  The biggest challenge is the behavioural change that needs to follow.

Too often the failure of new systems is blamed on the technology when more often it’s because people haven’t adapted to them.”

We shall see!

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 Database Management

My thanks to a loyal reader who dropped me a note over the weekend concerning HMRC changing her address details (without her permission), and sending her ex husband her tax credit summary for 2012/2013.

She has given me permission to post her email, where she asks for advice.

I have suggested that she writes to her MP and considers contacting the mainstream media.

Please feel free to offer advice, or offer suggestions as to how this could have happened.

"I am absolutely livid with HMRC's incompetent service. Today I received notification from my ex husband that he had received my Tax Credit award summary for April 2012 - April 2013. I separated/divorced him nearly 7 years ago. Up until this point in time I have always received the tax credit awards (and related documents) to my home address. The address at which my ex husband now lives is not one I have ever been associated with. Likewise my ex husband has never been associated with my current address either.

I phoned the HRMC to find an explanation for the clear administration error. The ironic thing is, that in order to speak to someone I had to go through a series of security checks, which included providing 'my' address - however I failed this part of the checks because somehow it now had my ex husbands address! Thankfully the call centre operator changed the address back to mine. She spoke to a manager but neither of them have been able to provide me with an explanation as to why or when the address change was made. They cannot see any record of the change ever being made. Also, why was I not notified of an address change?

I do not want my ex husband knowing what I get paid and how much tax credit I get as it's none of his business. I'm mortified No amount of apology can undo this breech of confidentiality and the fact that he now has that information. 

I'm writing a letter of complaint to HMRC but is there any more I can do? 

Anyone else I can go to?"

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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Out of The Box - HMRC's 7,000 Tablets

As HMRC moves towards its paperless dream, it will hand out 7,000 tablets and laptops to employees in an effort to improve their mobility.

CIO Mark Hall wants the workforce to be more mobile.

Hall told Computer Weekly that HMRC wants to introduce "out of the box" consumer devices.

"The ultimate number will be about 7,000 – but we don’t at the moment know how many of that will be iPads, laptops etc.

We are doing a piece with HR at the moment about mobile working, and how we can make our VAT inspectors more mobile, for example.”

An initial iPad pilot is taking place with a dozen HMRC executives.

“Then we will pause and reflect and look at user cases for the next tranche. Once we are ready, we will move quite quickly.” 

Those of you who are worried about another Datagate occurring should sleep peacefully. Seemingly the devices will work on non-restricted information, classified at Impact Level 2 security levels and below. HMRC will also work closely with the government security arm CESG, to ensure that security will not be compromised.

No worries 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



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"

The Road To Privatisation?

I am aware that many loyal readers have regularly posted comments on this site expressing their views that the government intends to privatise HMRC.

Up until now I have been of the view that privatisation was unlikely:

1 The issue of confidentiality of taxpayer's tax affairs would be very difficult to entrust to a third party (although, as loyal readers will point out, to some extent their parties do have some access to this eg the datagate fiasco was blame on a third party).

2 The political cost of privatising HMRC would be too high, ie there is insufficient support for such a move.

However, based on a recent announcement about a pilot for the outsourcing of text credits debt, it may be that I am wrong and that there is a "plan" (albeit a very "woolly" one) for step by step outsourcing.

The Low Incomes Tax Reform Group (LITRG) issued a press release last week noting that people with tax credit overpayments may in future be dealing with third party debt collectors:

"The Government announced yesterday that they are to conduct a payment-by-results pilot on outsourcing the collection of tax credits debt. This could mean that people with overpayments of tax credits will be dealing not with HMRC directly, but with debt collectors who will be paid by results, and who may therefore be tempted to be less than scrupulous in the methods they use.

Robin Williamson, Technical Director of the Low Incomes Tax Reform Group, commented:
“Tax credits overpayments are not due to claimant error and fraud alone. They arise also from official error, and a certain amount of claimant error is generated by wrong information from government sources.

“Also, because tax credits are a system in which payment is made on a provisional basis while entitlement is decided at the end of the year and adjustments then made, overpayments and underpayments often arise naturally as an integral part of the system. They are an inevitable feature of the design of tax credits. We must seriously question whether dealing with tax credit overpayments just like any other debt, by outsourcing recovery to commercial debt collectors, is an appropriate or proportionate response to the problem.

“If HMRC persist in this course of action, they must take great care to impose the same standards and safeguards as they would themselves when recovering these highly sensitive and untypical debts. The debt recovery arm of HMRC has published specific guidance on tax credits debt which has been developed over the last couple of years. It ensures that people’s circumstances are taken into account in order to set realistic time-to-pay arrangements and that those without the means to pay are able to have their debts suspended or written off in accordance with their needs.”

Notes to editors

1. The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes."

Views and comments are always welcome, do you think that the government wants to privatise HMRC, if so will it be privatised?

Tax does have to be taxing.

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The Robots Are Coming

The Guardian reports that HMRC are going to use robots (internet bots) to hunt down tax evaders.

The bots will scour the net to find people who are trading without telling HMRC that they are trading/earning an income.

Used in conjunction with HMRC's Connect IT system, HMRC will be able to identify anomalies between such elements as bank interest, property income and lifestyle indicators.

Apparently, before launching the bots, HMRC is seeking input from interested parties.

Well all of this sounds very "nice", if it works and is not used as an excuse to "stiff" people with overinflated tax bills on the pretext of an erroneous red flag from a bot.

My questions to those who work for HMRC;

- Will this actually work as it is claimed "on the tin"?

- What will HMRC do with all the data it collects on innocent people etc, that is not relevant to a specific tax evasion case?

Tax does have to be taxing.

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Datagate III - An Ongoing HMRC Farce

HMRC seems to be developing an addiction to sharing people's private financial details with the wider world.

Not content with the Datagate fiasco of 2007, when a database containing 25 million child benefit records went missing, HMRC have sent by the post the private financial details of up to 50,000 people who claim tax credits to other claimants.

Claimants were sent their annual tax credit award notice, coupled with personal details of other claimants (eg earnings, bank sort codes and the last four digits of the bank account number of other claimants).

HMRC claim that this was a printing error.

By "printing error" do they actually mean IT error?

HMRC also claim that the details mistakenly sent out cannot be used to commit id theft.

This of course is bollocks, any extra details about a person's bank or financial status can make a fraudster's task just a little bit easier.

It seems that, despite numerous warnings and cock ups, HMRC still don't "get" the concept of data security.

I guarantee that the HMRC "investigation" into this will finger some junior member of staff as the official scapegoat.

Does anyone actually trust HMRC anymore with their private data?

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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Spies 'R Us

Public Service reports that the Secret Intelligence Service (SIS) and GCHQ are working on a new network to collaborate with other agencies.

It seems that a recent initiative (SCOPE phase two), which was designed to deliver intelligence to law enforcement, government departments and agencies, has failed.

However, the government is never afraid to have another go at improving its spying capabilities. As such a new initiative has been launched.

Collaboration in the Intelligence Community (CLiC) is intended to be a "low-risk, inexpensive approach".

Former chief of SIS, Sir John Scarlett, is quoted:

"CLiC is designed to shore up... some of the capability that SCOPE 2 would have given us... We are doing really quite well on this more modest CLiC programme, which is not being run out of the Cabinet Office, it is being run out of SIS and GCHQ... and it will be of community-wide value when it is delivered."

What has this got to do with HMRC? I hear you ask.

Well, guess which agency will be the first to benefit from CLiC?

Yes, that's right, HMRC!

On the assumption that all things go according to plan, HMRC will be able to receive Top Secret intelligence and communicate securely via email.

Seemingly the improbably named secure messaging system STRAP3A (do a Google of images for this, and you come up with some quite unusual pictures) will let GCHQ, SIS, MI5, the Ministry of Defence, the Foreign Office (FCO), the Cabinet Office, the Home Office et al exchange Top Secret information by April.

Needless to say, this being secret, the costs and contractor involved are all "hush hush". However, it seems that HMRC are footing part of the bill.

Let us trust that the information shared is better handled than other information that government agencies are prone to lose.

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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Handling Stolen Data

Here's an interesting "little" story about some stolen data files, no not the "datagate" files of 25 million British citizens, but some stolen data files from HSBC Switzerland.

HSBC stated yesterday that a former IT employee had stolen information concerning 24,000 clients and former customers.

The Times reports that the French authorities have now acquired the data, and are examining data on the 3,000 French account holders on the list.

The question hanging in the air is whether HMRC will seek to acquire this ill gotten data (or at least the portion that covers British citizens who may, or may not, have been evading tax).

Switzerland has categorically stated that it will not co-operate with any attempt by foreign tax authorities to use the data. HSBC have also stated:

"We will not support any authorities seeking to use stolen data in pursuit of tax inquiries."

However, HMRC have "form" in this area as they acquired stolen data relating to Liechtenstein bank accounts three years ago.

Whilst the Swiss may not offer up any details, the French authorities who now have the data may well be less fussy.

Tax evasion is illegal.

However, should a government organ be using illegally acquired data to pursue suspected tax evaders?

Do two wrongs really make a right in this case?

In some countries, evidence acquired without due process (eg a warrant) is deemed inadmissible.

Doubtless there may be many who argue that tax evaders (remember it has to be proven first that they are evaders) don't deserve the protection of the law. Cut down one law and others will be exposed to an overzealous state seeking to prosecute those that it deems to have acted "illegally".

Would you be happy with state organs, eg the police, bursting into your homes without due process having been followed?

Will HMRC start to pay people to commit theft on its behalf?

That is where this may well lead.

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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Training Matters

Following the datagate scandal in 2007, when HMRC lost the personal details of around 25 million people, HMRC have launched an extensive retraining exercise for its 85,000 employees in order to avoid future such incidents.

Jeff Brooker, HMRC's man in charge of security and business continuity issues, announced details of the retraining last week at the Human Factors in Information Security Conference.

Security will now be placed at the heart of HMRC's business strategy, and in the performance objectives of every employee, via "12 golden rules".

In addition, a data security rulebook has been introduced by HRMC and workshops will be provided for staff.

Progress indeed!

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"