HMRC's £12M Erroneous Overpayments: A Decade of Mismanagement

 

In an astonishing revelation, it has been reported that His Majesty's Revenue and Customs (HMRC) has mistakenly overpaid its own staff by millions of pounds³. This shocking mismanagement of public funds raises serious questions about the financial controls within the organisation.

A Decade of Overpayments

Over the past decade, HMRC employees have pocketed a staggering £12.6 million in erroneous overpayments. In the last year alone, some 250 employees were mistakenly overpaid by more than £1,000. These figures, obtained by The Telegraph, show a total of £12.3 million has been paid back by staff, leaving a £300,000 shortfall.

The Impact on Public Trust

The news of these overpayments is likely to erode public trust in the HMRC. Jonathan Eida, a researcher at the TaxPayers’ Alliance, rightly pointed out that taxpayers will be fuming that tax officials have been filling their pockets with more than they’re entitled to, even if it’s by accident. The fact that a significant portion of the overpaid cash hasn’t been clawed back is even more concerning.

HMRC's Response

In response to these revelations, an HMRC spokesman stated that they operate at a monthly payroll average accuracy rate of 99.54%, which exceeds the corporate benchmark of 98%. However, this still means that 0.05% of the total paybill in the 2022-23 financial year was incorrectly paid. This equates to over £1.2 million, of which only 84% has been recovered.

Conclusion

These revelations highlight the need for improved financial controls within HMRC. It is unacceptable for public funds to be mismanaged in this way. HMRC must take immediate action to rectify these errors and ensure that every last penny of the overpaid money is reclaimed. Only then can public trust in the organization be restored.

The HMRC's erroneous overpayments are a stark reminder of the importance of financial accountability in public institutions. It is crucial that such institutions maintain the highest standards of financial management to ensure the responsible use of taxpayer money.


Tax does have to be taxing.

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HMRC Repayment Glitch

Due to a technical issue with HMRC's PAYE repayment system, taxpayers have been unable to claim refunds for tax overpayments and they now face delays in getting their refunds.

The Sun reports that the issues are now said to be fixed, but taxpayers are having to wait up to three weeks for their cash - a ten-day delay.

A spokesperson for HMRC told The Sun a backend glitch on its website meant it had to take down the service on Tuesday night, June 23, to fix it.

It then reopened the online tool on Saturday morning, June 27.

If you'd already submitted your request before the tool was taken down, you'll have the money in your bank account by July 2.

Tax does have to be taxing.

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HMRC Pays Back £27M of Overtaxed Pension Withdrawals

More than 10,000 counts of tax overpayment relating to pension freedoms have led to a £27m bill for HMRC.

From 1 April to 30 June 2017 HMRC processed:

• P55 = 6,070 forms
• P53Z = 3,408 forms
• P50Z = 1,098 forms

Total value repaid: £26,835,357.

The significant overpayment is due to savers being given emergency tax codes when using the flexibilities for the first time, with HMRC assuming that the same amount will be withdrawn monthly.

Royal London director of policy Sir Steve Webb is quoted by Professional Pensions:

"It is outrageous that in just three months HMRC has over-taxed people by more than £26m.

It cannot be acceptable to take thousands of pounds per person in excess taxes and then expect people to have to claim that money back.  

The rules need to be changed so that only basic rate tax is deducted and any extra tax due is collected through the normal tax return process. This would be a far fairer system."

 An HMRC spokesperson doesn't see the problem: 

"Claimants presenting their 2017/18 P45 to their pension provider will pay the correct tax. In the event that they don't, any discrepancy will be settled within 30 days of HMRC being notified."

All very well and dandy IF:

1 The taxpayer knows that he/she has been over taxed

2 The taxpayer knows what form to fill in, and

3 HMRC really do pay the money back within 30 days.

The reality is that the above conditions are not always being met!

By way of example, AJ Bell in April noted that last year only 11,000 claims per quarter were made, despite 139,000 pots being accessed over the time, potentially meaning thousands of users may have failed to reclaim the overpaid tax.

Tom McPhail, head of policy at Hargreaves Lansdown, nailed it and said the government has designed its tax system for pension withdrawals around what works best for its tax inspectors rather than putting the consumer first.

He said the result of this is a system which causes confusion for pension investors, cash-flow problems and the risk they end up paying too much tax.

“You wouldn’t let a private company get away with this so why is it OK for HMRC?”

Well said!

Fiona Tait, technical director of Intelligent Pensions, said the figures demonstrate the unsuitability of using the emergency tax rules for payments made under pension freedoms.

“When pension funds are withdrawn as an income the emergency tax rules do not have much impact however the idea that the proceeds of an entire pension fund are treated as if they will be paid each month is ridiculous and it should not be beyond the wit of HMRC to devise a way for consumers to indicate up front whether a pension payment is an income or one-off lump sum. 

HMRC’s own quarterly statistics, released this week, show that the number of withdrawals made under pension freedoms is increasing while the value of individual payments is decreasing. This means that increasing numbers of consumers are likely to face having to reclaim their income tax for cashing in relatively small pension amounts.”

I guarantee that HMRC will not lift a finger, as this gives them quite a cashflow advantage.

Tax does have to be taxing.

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Release The Hounds - HMRC Target The Elderly

On the subject of debt collectors, it seems that (according to This is Money) HMRC have been a wee bit quick off the mark to send in debt collectors to collect small amounts of tax credits etc overpaid many years ago.

Apparently, HMRC is setting debt collectors on unsuspecting taxpayers without any prior warning. Pensioners and families are receiving threatening letters out of the blue from debt recovery agents demanding immediate payment. Elderly people are being hounded for debts that are more than a decade old, and other diligent taxpayers are being wrongly harassed after the tax office botched some of its calculations.

The amounts are usually small, and those affected often have no idea that they owe a penny. However, instead of a letter advising taxpayers they need to make a payment, officials are calling in debt collectors.

My Twitter chum Elaine Clark, managing director of CheapAccounting, hits the nail firmly on the head:

"HMRC should be going after big firms who have failed to pay their tax, not pensioners over £200 dating back from years ago that they didn’t realise they owed."

Unfortunately, low hanging fruit are always the easiest and most tempting to pick!

Tax does have to be taxing.

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

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HMRC Overpaid Its Staff

I see that somehow or other, HMRC managed to overpay 134 of its staff last year by a total of £1.2M. Not, it would seem, a one off event.

A spokesperson for HMRC said that most overpaid salaries over the last financial year have now been repaid.

Quoted by economia:

“We take recovery of any overpaid salaries extremely seriously. The percentage overpaid is around 0.5% of our total salary costs.

We are continuously seeking to improve the accuracy of our payment and over the last five years the amount overpaid to employees has reduced over 20%.”

This appears to be an ongoing issue.

Does anyone know why HMRC can't get its payroll right?


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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WTF Is Going On in HMRC?

A loyal reader has posted this comment yesterday summarising an ongoing clusterfuck that they are enduring with HMRC, wrt tax repayments owed:

"HMRC have officially ruined my life, I did as I was told on my first tax return for my new business and it had made a loss as I had expected, HMRC checks stated I was owed money back from them, brilliant I did the online claim and was told 2-6 weeks , gave them a call to make sure and all was above board I waited two weeks then knowing it would be soon dug out all my savings from this year and paid back the start of business loans knowing this money would be in soon and I could finally relax after a stressful and penny pinching start off!!! 

After two months I became a bit concerned, called them as the online was telling me to claim again and no status or anything in it, I called them to be told they had no info, then a couple more months of chasing via pointless phone calls, ignored emails,mignonette letters, being sent irrelevant replies ie do next years tax return, local MP has not replied! 

And I have asked my insolvency practitioner to write them a letter at there request for whatever reason!! I have extreme bad depression that's returns due to this I'm about too loose my business and my home and praying too loose the one thing I do have left!! They are aware of all of this and don't seem to care a piece!!! 

Welcome UK people to hard work, if I owed them money I bet they would take it more serious!"

I appreciate that there are always two sides to every story. However, this does seem to indicate issues wrt online filing and record keeping within HMRC.

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"

HMRC's RTI Not Fit For Purpose Clusterfuck!

My thanks to Elaine Clark for pointing me to an article in the Telegraph about leaked emails from HMRC, that indicate 5 million taxpayers may have had their tax bills incorrectly calculated last year.

HMRC has privately admitted, to itself I assume, that those who underpaid or overpaid income tax last year may still have paid the wrong amount.

Aside from already having been sent new demands or repayments, it seems that the hapless 5 million now face the prospect of having their tax bills recalculated one again.

HMRC has stopped sending repayments until the crisis is resolved, a very neat way of improving its short term cashflow!

Elaine Clark of the Cheapaccounting tax practice is quoted:

"This is extraordinary, a disaster, and heads need to roll at HMRC."

HMRC it currently has no idea about the scale of problem.

The recipients of HMRC's leaked email were advised to tell taxpayers who questioned their bills "not to repay any underpayment" of tax, and those who overpaid tax should not cash any cheques they had received.

Ladies and gentlemen there is only one word that can describe this:

CLUSTERFUCK!

One of the whislteblowers who leaked the email said:

"HMRC refuses to admit the system doesn't work, and it's scandalous that there is no politician holding them to account as the whole programme of welfare reform could be put at risk because of this.

The system is not fit for purpose, it's inherently flawed and routinely produces errors that cause a huge mess for families and employers."

In the leaked email, HMRC admitted that duplicate entries for workers was a major factor behind its latest errors. It also blamed employers for failing to provide the correct salary information in submissions about staff.

"We are urgently investigating these cases and will look to resolve the matter in the next six to eight weeks. 

We currently do not know the scale of the issue but some large employers are involved, so several thousand of employees may be affected."

Elaine Clark said that taxpayers were being forced to wait more than half an hour to get through to HMRC to discuss tax demands. She said many then faced months in limbo before letters arrived, which might now be incorrect.

"The Revenue's flagship new reporting system was supposed to fix these types of problem but it appears to have failed completely.

The pressure put on individuals who face demands for tax is enormous, so it's extraordinary that HMRC should again have made such basic errors."

Is anyone surprised by this?

I doubt it, based on the comment made by a loyal reader yesterday, about HMRC's new death rules, everyone knows the system is fucked up, but no one has the balls to admit it to their political masters:

"As far as I know, no-one actually working on the front line in Personal Tax was asked about this change - the first we knew was when the big announcement about it was made to us a few weeks ago.

We know that this is going to be another balls-up. Even if the RTI data could be relied upon (and it can't - tens of thousands of people have recently had tax calculations for last year which are way out because either their employers or pension companies have supplied the wrong data, or the system has failed to handle it properly), then what about non-PAYE income which doesn't fall into Self Assessment, like savings interest or dividends? 

 

Not taken account of at all as far as we can see. The bereaved are likely to be ripped off all over the place through this. 

 

And why? 

 

So that Excom can cut more front-line staff, save their OBE's and go to the next prayer meeting?"

It was but a short time ago that Homer and her cronies were receiving the blessing of God for their "successes".

 

Where's God now Homer, when you need him/her?

 

Oh wait, he retired some years ago!

Sadly heads won't roll, Homer will simply be promoted to her next level of incompetence and doubtless will be made a Dame. Such a career of incompetence, how does she sleep at night?

Now is the time for the taxpayers to learn the real truth about how bad things are in HMRC. Step forward and tell it how it is!

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"

Corporation Tax Refund Delays

Figures obtained by UHY Hacker Young show that HMRC paid out £4.6BN to businesses in refunds for corporation tax last year. However, there appear to be delays in making these payments.

Approximately 286,000 businesses received a corporation tax rebate in the year to 31 March 2013, equivalent to an average refund in overpaid tax of more than £16,000 each. The norm for repayments to be received is around 2 to 3 months. However, some can take between 12 to 24 months.

Roy Maugham, tax partner at UHY Hacker Young, is quoted by Accountancy Live:

"UK businesses are still finding that they are overpaying their corporation tax in the billions of pounds. It shows how important it is for companies to regularly review any overpayment of tax as HMRC will not be looking to see if it owes them money."

Referring to the delays, he said:

"This can make the burden for companies struggling with unexpected losses or lower than anticipated revenues even heavier. It’s not unheard of for some to simply fold under the pressure in the meantime, as cashflow dries up.

Given that the number of rebates has been falling in the last few years, HMRC should be getting quicker but this doesn’t seem to be happening in reality."

I would be interested to hear from people about their experiences of obtaining a refund of overpaid corporation tax.

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"

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"

HMRC Is Infallible

My thanks to Paul Reeves (a loyal reader) who has directed me to case notes published on his site, concerning a five year dispute that one of his clients had with HMRC regarding tax credit overpayments amounting to £5K which HMRC wanted to be repaid immediately.

A satisfactory resolution (stage payments of the overpayment and restitution by HMRC of professional charges) was only found after the case was submitted to the Adjudicator's Office. During the protracted dispute Paul notes that HMRC stuck to the mantra that HMRC does not make mistakes:

"The Tax Credits Office refused at any time, until forced to admit this when the matter went to the Adjudicator’s Office, that they had, or indeed could have, made an error."

He goes on to note:

"Query everything and do not take “no” for an answer. 

Persistence pays!" 

However, he warns:

"Please be advised that when you have received a decision from the Adjudicator’s Office in your favour, if  HMRC do not act in accordance with that decision, there is not much that you can do except make a nuisance of yourself until they finally implement the decision, just to get rid of you."

Has anyone else experienced similar problems with HMRC?

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"

Coding Errors and HMRC's Resistance To ESC A19

The Telegraph has highlighted the ongoing attempts by HMRC to resist claims by taxpayers for application of the ESC A19 concession. The concession allows tax arrears to be written off if three conditions are met:

1 HMRC failed to make “proper and timely” use of information provided to it.

2 The taxpayer “could reasonably have believed their tax affairs were in order”.

3 No notification was sent to the taxpayer within 12 months of the end of the tax year in question.

Unsurprisingly, given the regular coding errors, many taxpayers (pensioners are particularly prone to erroneous coding notices if they have more than one pension source) find themselves in a position of owing or being owed tax.

As per a letter to the Telegraph:

"I read with great interest your account of the case of RD, South of England. My case covers unpaid tax to the tune of £10,457 for the tax years 2002-03 to 2007-08 as advised to me in an HMRC letter dated July 3, 2008. Even though this was received with shock and concern this sum was paid in full to HMRC because I was informed by them in reality that I had no option but to pay up. 

However, in October 2011 I became aware, through reading your column, of the A19 concession and wrote to HMRC seeking it to apply it to my case retrospectively. Eventually I was told that it would not apply. However, my case seems so similar to that described in your column recently it once more raised my concern about the way HMRC has dealt with mine. It had all the necessary information."

Only after the Telegraph intervened did HMRC back down, apply the concession and pay back the tax.

HMRC said:

“We apologise for the way that we have handled matters for Mr P. This is not the level of service we aim to provide. We are sorry for any worry and distress that he has experienced. We are sending a payment for £150 to him to apologise for our poor handling.” 

Elaine Clark, director of the accountants Cheap Accounting, is quoted by the Telegraph:

“Taxpayers who suffer errors are being forced to be more tenacious.

In our experience HMRC has toughened its stance. It’s almost as if officials don’t read the case file, they just send out a letter demanding payment even if the taxpayer would have legitimately qualified for ESC A19.”

In some cases, she said, taxpayers were left totally unaware of their rights. Others were frightened to take on the authorities.

Theoretically, RTI will eliminate these coding errors.

Time will tell!

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"

Repayment Matters

In the run up to Christmas Accounting WEB published this (see below) from a tax professional, who highlighted an issue wrt delaying tactics apparently being used by HMRC wrt refunding overpayments:

"This isn't so much a question as a warning to practitioners and I feel something that warrants national press attention, though I could do with some opinion on what to do next.

We all know about P35 overpayments from 2012/13 and HMRC's new stance on not revealing them on the phone unless you specifically ask about them, or refusing to repay them until you come up with a reason that satisfies them etc, but this one takes the biscuit and in my opinion, may be illegal.

A client overpaid PAYE/NI for 2012/13 because the old accountant advised the wrong amount of PAYE for a couple of months. We wrote back to their standard letter in August and explained this very thing, and confirmed that the figures were correct in all respects.

Because we'd had lord knows how many letters like this from HMRC asking for "reasons" and then prevaricating and delaying such repayments, in that letter we stated that having fully explained ourselves, we would not enter into protracted correspondence such as other cases and told them to reallocate the overpayment against 13/14 and that we had told our client to reduce their next payment accordingly.

We heard nothing further from HMRC (though they say they wrote in September asking for more info but that "we may not have received the letter"). We didn't which is suspicious.

However here's the crux - it turns out HMRC deliberately removed the overpayment from 12/13 by filing a proforma P35 which increased the tax and NI. I believe they didn't issue any notification to that effect.

As a result, my client began to get harassed by Debt Management units who despite us explaining what had happened, actually said to us on the telephone that they would continue chasing our client regardless. This has upset her considerably.

A formal complaint went in and here's the shocker - they've come back to me and I quote directly:
"As a temporary measure to protect the unjustified overpayment from being reallocated...by another HMRC department...we captured a pro-forma P35 on 5th August 2013 whilst issuing final further information letter to you".

At this point I challenge this as I'm, fairly sure that no letter went out, though they themselves said only "a request for further information" went out - not notice of alteration of figures. Either way, we didn't receive it.

They continue:
"Please note there is no statutory authority that permits HMRC to prepare a pro-forma P35, this is our internal procedure to protect the unjustified overpayment and a pro-forma P35 does not permanently remove the overpayment".

Given the P35 went in during April, and they still had removed the overpayment at 16th December when they capitulated and processed my complaint, I would say it was very much permanently removed - especially as they admit that the final information letter says "if you don't respond then we'll leave the payment on the record". I would also say that "there is no statutory authority that permits HMRC to prepare a pro-forma P35" means "we have acted illegally and beyond our powers".

What do people make of this? We're well used to overpayment reticence with HMRC, but I feel this oversteps the mark and I'm not sure what to do next. 

Can I file a Money laundering report against HMRC, as I feel this is very much proceeds of crime! 

Either way, if HMRC are openly removing overpayments and clients are not receiving letters saying so, this to me implies that HMRC internal procedure is basically covering up and preventing the repayment of taxpayer's money."

Comments and views are, as always, welcome.

Have any loyal readers experienced similar problems?

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



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Hartnett's £50K Holiday Bank

Richard Brooks has just tweeted the following:

"What would your boss say if you asked to cash in 70 days unused leave? Have £50k? So said HMRC to retiring D Hartnett"

Seemingly, being able to cash in such a large holiday bank is not within the rules for less elevated civil servants (I understand that the norm is about a week or so).

Comments and views welcome!

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 Turn of The Seasons

Christmas may come early for some 3.5 million people, who have overpaid their tax in 2012/13 and are now owed refunds by HMRC averaging between £350 and £500.

However, another 2 million people will not be so happy; as they owe HMRC between £400 and £500, because of tax underpayments.

Thus we find ourselves in "year end reconciliation" season again, as HMRC balances its books (so to speak). The reconciliation process returns without fail each year with the depressing inevitability of an unloved season. The reconciliation process is expected to last until October.

The Guardian reports that HMRC has said it is sympathetic to cases of genuine hardship, and those who cannot afford to pay should get in touch. These people may be able to pay what they owe over two or three years.

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 Phantom Menace

It seems that there are "phantoms" within the machine, or rather that HMRC are issuing P800T forms showing overpayments of tax after taxpayers have already claimed and received repayments.

AccountingWEB have received a number of reports of "phantom P800T" forms being issued.

HMRC said that it had isolated the issue behind the mis-issued refund notices and was working to resolve it:

“Most customers’ tax affairs are automatically and correctly worked out by our systems. A minority of customers who are in both SA and PAYE get their affairs worked out by both systems, incorrectly, and we regret the inconvenience this causes them and their agents.” 

According to Tax faculty member Shirley Martin, the issue goes back to 2010:

“One of the processes is where NPS should be notified automatically when an SA record is set up/closed down (SAM100090). The process is supposed to set the SA indicator on the NPS record. The purpose of the indicator is to tell NPS that a P800T is not required because the tax will be settled  through SA (PAYE 93032).

The first cases of SA taxpayers getting refunds from NPS were attributed to a reported broken link between SA and NPS.”

HMRC has been aware of the problem for more than two years. Indeed it was reported by a loyal reader on this site in 2011:

"OK what we are experiencing is HMRC issuing unsolicitored P800T tax calculations for 10-11 when a 10-11 SATR has already been lodged! Clients are getting two repayments and some getting refunds when they owe tax "computer says PAYE and SA records not linked". FFS!"

However, the issue has yet to be fixed.

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"

Good News! - HMRC Destined To Fail

Good news everyone, HMRC is now in the process of settling outstanding discrepancies (some going back to 2001).

Seemingly, over this period, HMRC has taken excess tax of £2.5BN and under collected £720M.

The result of the above discrepancies will mean that over 6M will receive a refund in the next few weeks of around £400.

Hoozah!

However, around 1.2M people will receive a bill for £600.

The discrepancies have come to light following HMRC's reconciliations of PAYE, as a result of the introduction of a new IT system.

HMRC note that these discrepancies that are now being highlighted are merely the end product of them clearing a backlog that had built up.

HMRC also note that things will now improve as the new system "beds in".

So are we to assume, and believe, that everything from now on will be fine?

Errmmm....sadly no!

For why?

Well, many reasons actually. However, to keep things simple, here are just two:

1 The new universal credit system is allegedly meant to be up and running by 2013. However, as already noted on this site, it will miss the deadline.

2 The HMRC capability review is now hitting the mass of managers below SCS. We can expect the upheavals emanating from that to cause a significant decline in TAXPAYER (I refuse to use the"C" word) service levels next year.

All in all, expect things to get worse rather than better.

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"

Sauce For The Goose

The FT reports that taxpayers, who have overpaid tax (as a result of PAYE coding errors) are now having to wait months for tax refunds due to them from HMRC.

It seems that the problems originally caused by computer systems being unable to match individuals with multiple sources of income have been exacerbated by stringent security checks.

Richard Mannion, national tax director at Smith & Williamson, is quoted:

"While there is clearly a need to carry out such checks, a delay of 10 weeks or more is excessive."

In one example, a taxpayer has been waiting over ten weeks for his repayment, even though he has paid tax since 1965, lived at the same address since 1995 and has submitted self-assessment returns since 1996.

'In this particular example HMRC ought to find it very easy to check its records to verify his claim,' says Mr Mannion. 'What I don't understand is why it takes ten weeks or more to do this.'"

Maybe, when taxpayers are asked by HMRC to pay overdue tax they should delay the payment so that they can carry out stringent security checks on HMRC?

With HMRC, sauce for the goose is evidently not sauce for the gander!

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"

Debt Collection - The HMRC Way

The Mail highlights another example of HMRC debt collection gone "rogue".

This time HMRC debt collectors wrote a letter that threatened to visit the home of a 95-year-old widow, and confiscate her possessions.

Quote:

"We are arranging a visit to your house.

We will view your possessions and list those that we will sell at auction.

We strongly advise you to avoid this as it will cost you much more to pay this way and can be embarrassing."

HMRC alleged that tax of £3,946.27 was owed. It transpired that in fact HMRC owed her £380 in overpaid tax.

An HMRC spokesman is quoted by the Mail:

"We apologise to Mrs Frew for the distress caused. The letter was issued in error and we are urgently looking into how this happened.

We will be contacting Mrs Frew to apologise and put her mind at rest."

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"

HMRC's "Secret" Write Off

The Telegraph reports that up to 250,000 pensioner who, because of errors on their tax codes, have unwittingly underpaid tax will have their underpaid tax debt written off.

For why?

Seemingly they would have an excellent claim against any demand sent out by HMRC, because the tax on their pensions should have automatically been deducted at the correct level, and there was no way for individuals to check for mistakes.

Interestingly the individual write offs will be made in "secret", ie the affected pensioners won't know anyhting about it, as the tax demands have not actually yet been sent out.

The intriguing question that has not yet been answered is, if those who underpaid had no way of knowing that their tax affairs were in error, what about those who have overpaid?

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 Are Not Psychic

Quite rightly HMRC are more than fed up with having to chase up tax credit claimants who do not update them with changes in their circumstances.

The government claims that approximately £400M a year is being overpaid in tax credits, because parents don't tell HMRC about changes in their childcare costs. Approximately 345,000 tax credits paid in 2008/09 (4.5% of the total) contained errors relating to childcare.

Aside from the loss of tax revenue, there are additional costs incurred by HMRC in chasing up and correcting these errors.

Tax credits is just one example of the many of Gordon Brown's ever so complex and unwieldy "tweaks" that he was addicted to making to the tax system.

It is high time that the tax system be radically overhauled and simplified. A good staring point would be to abolish tax credits and raise personal allowances to a decent level, eg £15K.

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"