HMRC Reneges On A Promise

HMRC staff at Sidlaw House in Dundee Technology Park had been told by HMRC that they would move over to the DWP to undertake Universal Credit work over the next three years.

However, HMRC has changed its plans and staff have now been told that no positions can be guaranteed with the DWP once the HMRC’s Tax Credits work in Dundee ends in three years’ time.

Dundee West MP Chris Law is quoted by The Courier:

“This is a devastating betrayal for the highly-skilled staff at Sidlaw House, many of whom have dedicated years of loyal service to HMRC, and I share their anger and disappointment in this Tory U-Turn following our campaign in 2015 that had secured work at the offices.

The UK Government gave me written assurances then that the staff at Sidlaw House would definitely be transferred to Universal Credit Services in the DWP, assurances that they have now ripped up.

This disgraceful decision by the Tories proves once again that they are more interested in needless cuts than protecting the jobs and livelihoods of the people of Dundee, and cannot be trusted to lead our city or our country.”

An HMRC spokesman said:

“In 2016, we announced that tax credits customer services advisers would be transferring to the Department for Work and Pensions (DWP).

DWP will now be able to deliver as planned without the level of additional resource it originally expected, and so the managed moves of HMRC staff to DWP will not be going ahead as planned.

We will be doing everything we can to keep their skills, knowledge and experience, either in HMRC or elsewhere in the civil service, as the tax credits work they do reduces in the years ahead.”

No apology, simply a "promise" to do "everything..to keep their skills".

Well I don't think that "promise" is worth the paper it is printed on.

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"

Meet Wankie - £8M of Taxpayers' Money Well Spent!

Something BIG is here! Meet Workie the #workplacepension. Find out more at https://t.co/ogibxassKv #DontIgnoreIt pic.twitter.com/zivbJG3ABV

— #DontIgnoreIt (@DWP) October 21, 2015

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"

The Bugger's Muddle of Complexity

It is self evident that the tax and benefits system in the UK is a "bugger's muddle" of complex rules and regulations, that confuse all who try to understand them.

An example of the confusion and misery that the rules cause is that of Lee Owen, whose family business (Jubilee Engineering) closed down in January.

Mr Owen, who was a partner in the firm with his father, has subsequently tried to claim jobseeker's allowance. Unfortunately, because he paid class 1 and class 2 national insurance (as opposed to class 1) for the last 3 years, he has been told by the Department for Work and Pensions (DWP) that he is not eligible for the allowance.

Mr Owen claims that HMRC told him to pay class 2 and 3 national insurance and not class 1.
It should be noted that from the age of 16 until 3 years ago Mr Owen did pay class 1 national insurance.

He is quoted by the Gloucestershire Echo:

“I haven’t been able to claim a penny from the state.
After all the tears and upset of losing the business and then this with the benefit claim, the two things sent me over the edge.

I just think it’s appalling - I paid my national insurance since I left school at 16.
I just think the whole system is totally mixed up. I’ve worked in this country all my life and yet I can’t claim anything.” 

Jobseeker's allowance is administered by the DWP, and because the civil service does not do "joined up" thinking one department will naturally pass the buck to another. Hence Lisa Billard, for HMRC, said:

“The payment of Jobseeker’s Allowance is a matter for the DWP. HMRC is unable to comment on the tax affairs of individual people, however I have referred this to the appropriate team who handle national insurance matters.

Further information about national insurance can be found at hmrc.gov.uk/NI.” 

It is interesting to note from the comment above that despite passing the buck to DWP, HMRC still appears to be reviewing the issue in house.

Meanwhile Steve Milne, for the DWP, said:

“Eligibility for contribution-based Jobseeker’s Allowance (JSA) is only for those paying class 1 national insurance.

People who were self-employed may still be eligible for income-based JSA but that depends on their household income and savings.”

This of course is all very well for those who like to tick boxes, but Mr Owen and his family need practical help now not in the medium/long term when the issue has been passed around various in house teams and administrators.

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"

Inglese Retires

My thanks to a loyal reader who pointed me to an article in The Lawyer that notes that HMRC have appointed a new general counsel to replace the retiring Anthony Inglese. Gill Aitken from the Department of Work & Pensions’ (DWP) where she is director general of legal services, will take up the role at the end of January 2014.

As an aside, in 2010 she topped the DWP bonus league by earning a £10K bonus on top of her £125K salary.

Loyal readers with long memories will recall that in November 2011 the Commons Public Accounts Committee took the unusual step of making Anthony Inglese CB, General Counsel and Solicitor HMRC, swear an oath at a PAC hearing into HMRC Accounts and Tax Disputes.

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"

Is RTI The Panacea That HMRC Claim It Will Be?

My thanks to a loyal reader, who has posted the following comment concerning HMRC's inability to deal with matters "real time".

The reader makes the valid point that the system is incapable of transmitting realt time data between DWP and HMRC.

This clearly has implications for RTI and Universal Credits.

My question to those of you have intimate knowledge of the RTI flagship is, will RTI satisfactorily deal with, resolve and be able to cope with the issues raised by this loyal reader?

"An individual (me) has 2 forms of "income" which consists of a pension following 40yrs employment and a DWP minimum ESA payment of the taxable kind.

A succession of tax codings ends up with notification of 2013/14 to include an "underpayment restriction" amount of -£X, cue rapid query via endless wait on phone!

Pray tell me HMRC says I, what does this amount relate to and how did you arrive at the figure?
HMRC - We don't know what your income is going to be and we have to estimate it.

But says I (and herein lies the RTI scenario bit)

my pension is paid from you as my ex employer through the realms of MyCSP (my civil service pension) and your closest partner agency DWP pay me the reduced ESA, what gives?

HMRC states we don't know what DWP pay you (ESA taxed by HMRC via instructions to MyCSP as DWP can't collect the tax due for whatever reason) until the end of the tax year! Cue incredulity on my part at this stage as besides the fact that HMRC are estimating that which it is possible to calculate, by my calculations I am due to receive an inflation busting increase in my ESA of 14.65%.

So what does all this mean for the taxpayers of the UK?

I don't know what an incorrect tax code costs to put right but multiply it by the number of time my tax code has been "adjusted" in 6 months (7) and you begin to get the picture.

Then there is the "underpayment restriction" which unchallenged would result in a tax-free loan by the taxpayer - me, to HMRC, prior to the subsequent adjustment the following year.

Now, call me a cynic, but do you suppose that the vast majority of these adjustments are one-way and unethical?

So, what does it all mean?

Think carefully with RTI looming.

There is the archaic system of ESA taxed via pension provider - a system of taxation via third party involvement, with all the opportunities for mistakes along the line...

The system is incapable of transmitting real time information from DWP to HMRC.

Even with all the correct information to hand (i.e. its own and DWP data, HMRC is incapable of calculating "the right amount of tax at the right time".

HMRC obtains a positive balance in this area at the expense of the taxpayer, not creative accounting but certainly unethical especially during a reccesion.

What does that mean for the Universal Credit and RTI systems?

Over to you Ken."

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"

Debt Collection - HMRC Hires Bounty Hunters

HMRC and the Department for Work and Pensions (DWP) have signed a deal with Experian (the credit reference agency) to use its data to detect fraud and error in the tax credits and benefits systems.

The Guardian reports that a recent HMRC pilot protected more than £16M of potential losses in tax credits, and projected savings over the 12 months of the contract are around £700M.

David Gauke, the exchequer secretary to the Treasury, is quoted:

"The government will not tolerate people who dishonestly divert money away from those who are genuinely entitled to it. Working with Experian will allow HMRC to escalate the fight against tax credit fraudsters, helping to ensure that they are caught and punished."

HMRC has released a number of case studies illustrating where savings have been made in the pilot. One involved a woman claiming as a single parent with four children, where a search of Experian's information on financial applications showed that she had a partner living at the same address. This led to her awards being stopped.

HMRC won't say how much Experian are earning (either from direct fees or performance fees) for this work.

The Telegraph reports that Experian will identify cheats by trawling through their household bills, credit card applications and employment records and will be paid “by results".

Let us trust that this all works out well for everyone then!

I just have two small observations:

1 The results from pilot schemes run by HMRC are not always what they appear to be.

2 Not everyone is as enamoured of Experian as HMRC are.

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

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"

Universal Credits Delayed

It should come as no surprise to anyone that the government's plans for an all "singing and dancing" universal credit system, scheduled to be up and running by 2013, may in fact be a tad delayed.

The Guardian reports that the new IT systems, that will link Department for Work and Pensions (DWP) and HMRC, necessary for universal credits will not be ready on time.

Quel surprise!

Politicians don't do IT!

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

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"

A Disaster Waiting To Happen

David Gauke, the Exchequer secretary, has given an answer to a written parliamentary question that confirms that HMRC will proceed with the Real Time Information scheme for tax payment.

"I expect HMRC to be in a position to pilot the Real Time Information system with employers, pension providers and payroll bureaux from the spring of 2012."

Really?

Real world experience shows that just because a politician gives a fantasy deadline, the actuality is far removed from fantasy.

Regarding Gauke's fantasy project, tax professionals are not convinced that the deadline is realistic or that HMRC are actually up to the job of implementing this system.

HMRC have given guarantees to the DWP that the system will be in place before the October 2013 deadline for Universal Credits.

This is all very well. However, basic trials of the system will not begin until April 2102; more detailed live trials will not start until January 2013.

What happens if the trials throw up faults that take longer than the October 2013 deadline to address?

Capgemini are being paid to pull this rabbit from the hat.

TechEye quote Matthew Brown, Technical Officer at the Chartered Institute of Taxation:

"This is less of a tax decision and more to do with government department's wishes as this is all based around universal credit proposals.

We are certainly concerned that there is not enough time to prepare for such a project, as most projects would need at least 18 months to prepare the software according to developers, while only one year is being given to get it right before live tests begin."

He added:

"It is a tall order and it means that there is absolutely no room for errors in the system."

HMRC are not known for being "error free".

Online tax forms took five years to be thoroughly tested and put in place.

Any bets as to whether this project will come in on time, on budget and error free?

As noted, politicians tend to avoid reality. Sadly for HMRC this project is being driven by politics and David Gauke is a politician/lawyer not a finance/IT professional.

Tax does have to be taxing.
UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.
Quote ID code "ABC" when contacting a QROPS specialist.
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"