HMRC's Child Benefit Cock-Up: 23,500 Families Falsely Branded as Fraudsters in Anti-Fraud Fiasco – The Reassessment Sham Unravels

 

Buckle up, fellow tax warriors – if "HMRC child benefit error 2025" or "HMRC fraud initiative blunder" has you spitting feathers at your screen, you're in the right corner of the ring. I'm Ken Frost, the battle-scarred FCA firebrand who's spent 19 gruelling years eviscerating HMRC's parade of pratfalls right here on HMRC Is Shite (and across my Living Brand empire at kenfrost.com). And today? Oh boy, we've got a fresh steaming pile of bureaucratic bollocks that's got 23,500 hardworking British families – that's right, 23,500 – clawing back what was rightfully theirs after HMRC's so-called "experimental anti-fraud programme" decided to play fast and loose with their livelihoods.

Picture this: You're a graft-in-the-trenches parent in Birmingham or Bristol, juggling a full-time job, school runs, and the endless grind of bills that never bloody stop. Your child benefit – that modest lifeline propping up the school uniforms, the packed lunches, the odd treat that keeps the wolf from the door – gets yanked without warning. Why? Because HMRC's boffins, in their infinite wisdom, peered into a crystal ball of "international travel patterns" (read: dodgy data scraps from the Home Office) and proclaimed you a permanent émigré to sunnier climes. A weekend jaunt to Dublin for Nan's funeral? Permanent fraud. A stag do in Benidorm that went tits-up with a delayed flight? Overseas scrounger. Even a family holiday to Majorca that got scrubbed by Storm Whatever-It-Was? Poof – you're painted as a benefit bandit, payments frozen, and your kids' future dipped in red ink.

This isn't some abstract Whitehall whitepaper wankery; it's a gut-punch to real lives. HMRC's grand gesture? A "full review" of the bollocksed cases, now cross-checking against employment records to prove you're still slogging it out in rainy old Blighty. Jolly good show, eh? But let's not kid ourselves – this reassessment circus is damage control dressed as diligence, and it's coming months too late for families who've already borrowed from mates, skipped meals, or pawned the PlayStation just to keep the lights on. As the National Audit Office (NAO) has hammered home time and again, HMRC's tech toys are about as reliable as a drunk uncle at a wedding: flashy on paper, fiasco in practice.

The Eye-Watering Stats: HMRC's Fraud-Fighting Farce in Black and White

To peel back the layers on this shambolic saga, here's a no-nonsense table distilling the data disaster (sourced from HMRC's own mea culpa leaks and PAC grillings). Brace yourselves – it's grim reading for anyone who believes "tax does have to be taxing" shouldn't extend to terrorising tots.

HMRC's Blunder Breakdown	Affected Families	Root Cause Cock-Up	Financial Fallout (Est.)	Reassessment Timeline	Taxpayer Cost (Hidden)
Wrongful Withdrawals	23,500	Incomplete Home Office travel data (e.g., missing Dublin returns, cancelled Eurostar legs)	£150m+ in frozen payments (avg. £500/family/month)	3-6 months per case	£20m+ in appeals/admin sludge
Fraud Initiative "Successes"	12,000 flagged as "permanent leavers"	Algorithm ignoring work ties (PAYE stubs, NI records)	40% family debt spikes; 25% food bank reliance	Ongoing "priority review" (ha!)	£10m in wrongful debt chases
Broader Child Benefit Errors	50,000+ since 2023	Data-sharing glitches with DWP/Home Office	£300m total over/underpayments	N/A – systemic review promised (again)	£50m+ in NAO/PAC probes
Helpline Hell Add-On	15,000+ distress calls	18-min avg. waits; 40% drop-offs	Mental health toll: 30% reported anxiety surges	"Fast-track" lines (if you can find 'em)	£5m in unstaffed advisor black hole

These aren't just numbers on a spreadsheet, muckers – they're nightmares etched in Excel. HMRC's "experimental programme," launched with all the fanfare of a damp squib, was meant to sniff out the real chancers: expats double-dipping on UK perks while sipping sangria in Spain. Noble aim? Aye. Execution? A goddamn disgrace. As the Treasury Committee roasted them last month, this isn't innovation; it's idiocy wrapped in AI hype, leaving legitimate claimants in the lurch while the actual fraudsters – those slick operators with fake addresses and phantom flights – slip through the net like ghosts in the machine.

Real Lives Ruined: The Human Cost of HMRC's High-Tech Hysteria

Spool back to Mrs. J in Leeds, a nurse pulling 12-hour shifts at the NHS while her hubby clocks overtime in a warehouse. One family trip to Poland to visit rellies in 2024, return via budget airline glitch, and bam: Child benefit for their two lads, aged 7 and 9, vanishes. Bills pile up, the fridge echoes, and Mum's skipping dinners to cover the mortgage. Or take the single dad in Glasgow, fostering his niece after a tragedy: His "suspicious" pattern? A work conference in Amsterdam that got extended by fog. HMRC's letter arrives like a red rag: "Overseas residency detected. Payments ceased." Cue panic borrowing at 40% APR from Wonga wannabes, all because some algorithm couldn't tell a conference from a con.

And don't get me started on the Northern Ireland families, for whom a hop across the Irish Sea is as routine as a cuppa. Dublin Airport data? Vanished into the ether. Warsaw layovers? Erased. This isn't oversight; it's outright oppression, disproportionately hammering working-class clans who can't afford the luxury of a paper trail. As one anonymous victim vented in the comments last week: "HMRC treated us like criminals for living our lives. My kids went without because your 'system' is shite." Spot on, mate. Spot. Bloody. On.

Eviscerating the Excuse Factory: Why HMRC's "Review" is Pure Piffle

Officials bleat about "lessons learned" and "enhanced checks," but let's call this what it is: a PR plaster on a gaping wound. That "analysis of international travel patterns"? Built on Home Office scraps that are notoriously patchy – think GDPR blind spots, post-Brexit border bollocks, and underfunded IT that's creaking like a 1980s ZX Spectrum. Employment records as the silver bullet? Laudable, but why wasn't that step one, not the remedial afterthought? HMRC's track record screams complacency: Remember the 2023 Universal Credit debacle that left 40,000 pensioners penniless? Or the £1bn refund fraud bonanza earlier this year? This child benefit clanger is just the latest in a litany of cock-ups that cost taxpayers £500m+ annually in fixes and fines.

The real scandal? While families fester in fear, HMRC's top brass pocket six-figure salaries and splash on "consultancy" fluff. That £450k video interview platform for recruitment? Aye, because nothing says "priority" like fancy tech for hiring more incompetents while helplines ring out to 6 million ghosts. It's a taxpayer mugging, plain and simple – and we're all footing the bill.

Fight Back, Tax Warriors: Your Action Arsenal

Enough wallowing; time to wield the pitchforks. Here's your battle plan to hold these clowns accountable:

• Bombard Your MP: Template email ready? "Demand HMRC halt all suspensions pending full audits. Cite the 23,500 victims and NAO's fraud-waste warnings." CC the Treasury Committee for extra sting.
• Share the Rage: Flood X (that's Twitter for the dinosaurs) with #HMRCChildBenefitBlunder and #TaxDoesHaveToBeTaxing. Tag @HMRCcustomers and @Exchequer – make it viral.
• Claim What's Yours: If you're hit, log into your Personal Tax Account pronto. Appeal via the helpline (good luck) or free advice lines like TaxAid. Document everything – it's your ammo.
• Support the Survivors: Donate to family food banks via Trussell Trust, or back campaigns from Gingerbread for single parents in the firing line.
• Wise Up Long-Term: Arm yourself with knowledge. Grab a copy of Tolley's Tax Planning 2025-26 (via Amazon) to navigate this minefield like a pro. Or dip into Your Rights as a Taxpayer by the CIT (here) for the lowdown on benefit appeals. Knowledge is power, and power is payback.

There you have it – HMRC's child benefit catastrophe laid bare, a festering reminder that when the taxman plays God with data, it's the little guy who bleeds. Got your own horror story? Spill it in the comments below; let's build the chorus. And remember, tax does have to be taxing – but it shouldn't be torturous. Stay savage, stay solvent.

Ken Frost, November 11, 2025

Tax does have to be taxing.



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC’s New PAYE Portal: A Recipe for Disaster?

In a recent speech to the Chartered Institute of Taxation, Exchequer Secretary to the Treasury James Murray unveiled HMRC’s ambitious plan to launch a new public portal for PAYE (Pay As You Earn) taxpayers, set to go live next month. The portal promises to serve 34 million taxpayers by allowing them to check employment and pension data held by HM Revenue and Customs (HMRC), update their details, and understand changes to their tax codes. On paper, it’s a bold step toward modernising tax administration and empowering taxpayers. In reality, however, HMRC’s track record and its reliance on outdated, creaky legacy systems make this venture a disaster waiting to happen.

 

A Noble Idea, But a Shaky Foundation

The concept of a user-friendly digital portal is appealing. Taxpayers deserve transparency and easy access to their records, especially in an era where online banking and government services are increasingly streamlined. For a workforce of 34 million, a functional PAYE portal could reduce confusion around tax codes, cut down on administrative errors, and save time for both citizens and HMRC staff. But the devil is in the delivery—and HMRC’s history suggests it’s ill-equipped to pull this off without significant hiccups.

 

The department’s core issue lies in its sprawling, antiquated IT infrastructure. HMRC operates a patchwork of legacy systems, some of which date back decades. These systems were never designed to handle the scale, speed, or security demands of a modern digital portal serving millions. Integrating them with a shiny new front-end interface is akin to bolting a sleek electric engine onto a horse-drawn carriage—it might look impressive, but it’s unlikely to run smoothly.

 

Legacy Systems: The Achilles’ Heel

HMRC’s reliance on old technology isn’t a secret. Over the years, reports from the National Audit Office (NAO) and other watchdogs have highlighted the department’s struggles with outdated IT. Systems like the National Insurance Recording System (NIRS2) and the PAYE Online Service are clunky, fragmented, and prone to failure. These platforms weren’t built for real-time data updates or user-driven interactions—they’re relics of a bygone era, designed for back-office processing rather than customer-facing functionality.

 

Take the PAYE system itself: it’s a labyrinth of interconnected databases that often fail to sync properly. Taxpayers frequently report discrepancies between what employers submit and what HMRC records, leading to incorrect tax codes and over- or under-payments. A new portal layered on top of this mess won’t fix the underlying flaws—it’ll merely expose them to millions of users. Imagine 34 million people logging in to check their data, only to find outdated records, missing pension details, or inexplicable tax code changes. The potential for chaos is immense.

 

A History of Digital Missteps

HMRC’s track record with tech projects doesn’t inspire confidence. The department has faced criticism for botched initiatives like the Real Time Information (RTI) rollout, which aimed to modernise PAYE reporting but left small businesses scrambling to comply. More recently, the Making Tax Digital (MTD) program—intended to digitise tax returns—has been plagued by delays, cost overruns, and complaints from users about its complexity. These projects stumbled despite years of planning and significant investment. Now, HMRC wants to launch a public-facing portal in a matter of weeks? It’s hard to see this ending well.

 

The rushed timeline only amplifies the risk. Building a secure, reliable portal for 34 million users requires rigorous testing, data migration, and staff training—none of which can be adequately accomplished in a month. HMRC’s legacy systems will need to feed accurate, up-to-date information into the portal, but their history of glitches and data mismatches suggests this is a tall order. A single failure—say, a corrupted database or a security breach—could grind the system to a halt, leaving taxpayers frustrated and HMRC scrambling to respond.

 

The Human Cost of a Digital Disaster

Beyond the technical challenges, there’s a human element to consider. HMRC’s workforce is already stretched thin, with staff cuts and office closures reducing its capacity to handle queries. A new portal will inevitably generate a flood of calls and complaints as users encounter bugs, struggle to navigate the interface, or dispute inaccurate data. Yet the department’s helplines are notoriously understaffed, with wait times often measured in hours. If the portal flops, taxpayers will bear the brunt—facing delayed refunds, incorrect tax bills, or simply being unable to access their own information.

 

And then there’s security. Legacy systems are notoriously vulnerable to cyberattacks, and HMRC holds a treasure trove of sensitive data: names, addresses, National Insurance numbers, and income details for millions. A hastily launched portal could become a prime target for hackers, especially if it’s bolted onto old infrastructure with known weaknesses. A data breach would not only undermine public trust but also expose HMRC to legal and financial fallout.

 

Too Big, Too Soon

HMRC’s new PAYE portal is a classic case of ambition outpacing capability. The idea of giving taxpayers more control is laudable, but the department’s creaky legacy systems and history of digital stumbles make it painfully clear that this project is doomed to falter. Without a complete overhaul of its backend infrastructure—something that would take years, not weeks—HMRC cannot hope to deliver a portal that’s functional, secure, and user-friendly for 34 million people.

 

The Treasury may see this as a shiny new toy to flaunt, but taxpayers and HMRC staff will be left picking up the pieces when it inevitably breaks. Unless the department delays the launch, invests in modernising its systems, and prepares for the onslaught of demand, this portal risks becoming yet another chapter in HMRC’s long saga of technological woe. For now, it’s not a question of if this will be a disaster, but how big the disaster will be.

Tax does have to be taxing.

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PAYE Crash Workaround

My thanks to loyal reader Paul Gibson (he has given me permission to publish his details) a 75 year old ex IT Director. He currently develops business applications in Visual Basic for several charities, for one of which he also runs the payroll.

He encountered a problem when dealing with HMRC online PAYE, and has provided a workaround for it.

Please note: this may not work for everyone, always take back ups before trying it.

PROBLEM: After running the latest update, Basic PAYE Tools crashes with the error: “Basic PAYE Tools could not access the database”


SOLUTION:

1. Using File Explorer, navigate to directory OS[C:]\Users\User_Name
2. With the View Tab, check “Hidden Items” – the Folder “AppData” should now be displayed
3. Navigate to \AppData\Roaming\HMRC\payetools-rti
4. Take a back-up copy of the complete contents of folder “payetools-rti” as a precaution
5. Click on the “payetools-rti” folder and rename Data Base File “sqlite3” to “sqlite3x” (or sqlite3xx if sqlite3x already exists)
6. Click the “backups” folder
7. Select the latest back up folder with the format:
RTI-9999_YYYY-MM-DD_EXIT and Copy & Paste it to your Desktop
8. Now run Basic PAYE Tools – this may take up to 10 minutes to load as it rebuilds “sqlite3”
9. Under Menu, click “Restore your data”
10. Browse to the directory This PC\Desktop and click the back up folder pasted to the Desktop at Step 6.
11.Click “Next” to restore your data – this will also take up to 10 minutes
12. You should now be able to run updated PAYE Tools with your latest data.
13. If you still have problems, restore the backup “payetools-rti” folder and contact HMRC support.

Tax does have to be taxing.

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HMRC's Dash For Cash - Beware Dynamic Coding!

The bane of all of our lives (HMRC and taxpayers alike) PAYE codes are set to cause yet more problems.

The FT reports that some taxpayers face the risk of “significant and aggressive deductions” from their pay packets as a result of a new approach to calculating pay-as-you-earn (PAYE) codes.

Taxpayers are being urged to check their tax codes after HMRC introduced a “dynamic coding” system in July.

The words "dynamic" and "HMRC" are generally not used in the same sentence. Anyhoo, by all accounts the automated system is able to adjust PAYE codes which determine exactly how much tax an individual must pay as soon as there is a change in their income. The new system is designed to help about 6m people who either end up paying too much or get an unexpected tax bill at the end of the year.

However, and when it comes to HMRC there is always a "however, experts say it is already showing signs of struggling to deal with data glitches, bonuses and employees on foreign assignments.

To make matters worse, in accordance with HMRC's new undisclosed mantra of "dash for cash", it is also aiming to collect tax debts far more rapidly than in the past, resulting in some taxpayers facing big and unexpected fluctuations in their take-home pay.

Kate Upcraft, a payroll consultant, said there were already signs of problems with the system. She said HMRC had recently reported an increase in postal PAYE queries, suggesting “significant and aggressive deductions that people are querying, but not through the digital channels”.

She went on:

“The biggest issue that will cause problems is HMRC’s misinterpretation of taxpayer data.

Those of us who know the standard of the data and some of the triggers it is using to amend codes are very concerned.” 

Problems have also arisen in cases where people have been paid bonuses or worked abroad for part of the tax year. Steve Wade of EY, the professional services firm, said:

“Any new system is likely to have teething problems and not surprisingly some globally mobile employees who have complicated affairs have been affected. 

In particular, the new process appears to ignore credit for foreign taxes paid, resulting in overestimating the tax due. In general, individuals returning from overseas assignments are liable to UK taxation from the date of their return. Unfortunately, some employees are finding that this new system attempts to charge UK tax from the start of the tax year.” 

Sharron West, technical officer of the Low Incomes Tax Reform Group, said she feared the adjustments could lead to a great deal of stress and anxiety.

“We are very concerned that there may be significant ramifications for those on low incomes who have their tax codes altered so their net pay reduces significantly unexpectedly, as they are often on tight budgets.” 

She said one of the biggest changes concerned underpayments which used to be collected over 12-36 months and now will be automatically “coded out” over the remainder of the tax year in which they come to light. These adjustments, which could be particularly large if made towards the end of the tax year, would be compounded for taxpayers who had underpayments from previous years that were already being collected via their tax code.

Be warned, under rules introduced in 2015, HMRC is able to collect up to £17,000 a year of tax debts directly from pay packets, subject to a limit preventing deductions of more than 50 per cent of an employee’s pay. The maximum deduction varies according to income, with a limit of £3,000 for those with incomes of up to £30,000.

HMRC claims that the changes meant that millions more taxpayers (HMRC said "customers" but I refuse to use the word!) were paying the right tax at the right time — meaning they would not face unexpected bills at the end of the year. It also said there had been a temporary issue affecting one specific customer group based abroad, adding that it was automatically updating their tax codes and refunding any additional tax paid. HMRC said individuals faced with an unexpected tax bill could ask for extra time to pay.

“If customers are faced with a tax bill they can request to spread their payment over time.” 

But the adjustments will still come as a surprise to many. FT Money is aware of one case where an executive’s total net income dropped sharply after a new tax code was applied, shortly after he was posted abroad by his full-time employer.

“When I got through to HMRC’s self-assessment department, I was told that an incorrect tax code had been automatically applied by a new ‘dynamic coding’ process which had wrongly decided that I owed more than £53,000 in tax.

I owe no tax. The man in the call centre noted that the system had been ‘a bit too dynamic’.” 

Ms West said:

“Although coding notices will be sent via online personal tax accounts or by post every time there is a change of tax code, most taxpayers do not check their tax codes — or even understand them properly to be able to check them — and so in many cases taxpayers will not be anticipating any change to their net pay or pension before it happens. 

People are being told to look at their personal tax accounts. But it does not show the history of the tax code, so unless a note is made of what was there before, it will be difficult for people to work out what has happened and they have to be comfortable with the digital channel which many aren’t, or don’t even know about.”

In other words this is another cock up waiting to impact the log suffering taxpayers, courtesy of HMRC's "dash for cash" and it inadequate digital strategy and implementation!

BEWARE DYNAMIC CODING!

Tax does have to be taxing.

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HMRC Contradicts Itself

AccountancyAge reports that HMRC has had to back down in its fight to reclaim unpaid PAYE contributions in a first-tier tribunal, after already writing to the appellant that it had no tax to pay.

HMRC argued that Walkers’ Baggage Transfer, a company that transports luggage of holidaymakers exploring Hadrian’s Wall, had not accounted for the £727.80 in PAYE contributions properly due for one of its drivers.

The driver was present in the court and swiftly countered HMRC claims with a letter sent by HMRC.

“I believe that your employer operated Pay As You Earn (PAYE) correctly using the information they had at the time. This means that I will not be asking your employer to pay the £727.80 tax due.”

The judge quickly came to his conclusion and found that there was an “obvious conflict between the terms of this letter and the stance of HMRC”, ruling in favour of the driver.

What a shambles!

Tax does have to be taxing.

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The Quality of Service to Personal Taxpayers Inquiry

Without any sense of irony, in light of yesterday's damning NAO report into the chaos at HMRC costing taxpayers £97M in phone calls and possibly giving rise to over 3 million incorrect tax payments, PAC will be holding an inquiry into the quality of service to personal taxpayers.

I am glad to see the word "taxpayers" not "customers" has been used!

The deadline for written submissions is 7 June.

The Public Accounts Committee holds a session on the quality of service to personal taxpayers on Monday 13 June 2016 at 4.00pm

Scope of the inquiry

HM Revenue & Customs' (HMRC) mission is to collect the money that pays for the UK's public services and help families and individuals with targeted financial support. It aims to administer the tax system in the most simple, customer focused and efficient way, helping the honest majority to get their tax right.

Taxpayers pay around £270 billion a year in income tax and national insurance, around half of all tax revenue. Many people who pay income tax do not need to engage with HMRC on a regular basis. Most income tax (86%) is collected from employees under Pay-As-You-Earn (PAYE) and administered by employers. The remaining 14% of taxpayers who are self-employed or have other income sources are required to assess their own tax liabilities.

During the last five years, the National Audit Office and the Committee of Public Accounts have reported several times on HMRC's customer service. In 2013, the Committee of Public Accounts expressed concern that the prospects of fewer staff and more calls were a real risk to HMRC achieving acceptable standards of service. The NAO report will look at what HMRC has done to improve performance since the NAO last reported in 2012, and how HMRC plans to improve customer service and seek to understand whether the quality of HMRC's customer service might affect tax revenue.

If you wish to submit evidence to this inquiry, please do so through the page linked below. The deadline for written submissions is midday on Tuesday 7 June 2016.

Send a written submission


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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Taxpayers' £97M HMRC Phone Bill

As loyal readers know, getting through to HMRC on the phone is something of an endurance test. As such, it should come as no surprise to anyone to learn that the National Audit office (NAO) is none too impressed with caller wait times either.

The NAO reports that a decision to cut jobs in HMRC meant that call waiting times tripled to 47 minutes last October just as paper tax returns were due. Bizarrely more than 5,000 HMRC staff were moved away from its call centres at a time when telephone calls were not falling.

“HMRC’s overall strategy of using digitally enabled information to improve efficiency and deliver service in new ways make sense to the NAO. This does not change the fact that they got their timing badly wrong in 2014, letting significant numbers of call handling staff go before their new approach was working reliably. This led to a collapse in service quality and forced a rapid expansion of headcount. HMRC needs to move forward carefully and get their strategy back on track while maintaining, and hopefully improving, service standards”.

Amyas Morse, head of the National Audit Office, 25 May 2016

The cost to the economy of leaving millions of callers hanging on the line (which as per the Telegraph is officially priced at £17 an hour) was £97million, up by 50% in three years.

The chaos prompted HMRC belatedly to send 2,400 staff to man the phones at its call centres, which in turn meant they had to “defer essential work to maintain PAYE records”.

The consequences of moving the deckchairs in this manner was a doubling of discrepancies between PAYE and self-assessment returns, leaving a risk that 3.2million people had “paid the wrong amount of tax”.

HMRC will be quizzed by PAC next month about this clusterfuck.

How ironic that just as this chaos is being exposed to the cold light of day, Dame Homer retired last month. The timing of her retirement couldn't be better, and is the only thing that she has got right in her civil service career!

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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RTI Scuttlebutt - Update

My thanks to the loyal reader who has updated me on the RTI cock up, that I wrote about a couple of days ago, involving the doubling of some employees' RTI salary records.

Seemingly the RTI year end has been processed twice by HMRC, thus doubling a large number of taxpayers' year end salary. HMRC have, apparently, realised that there has been a cock up and have stopped sending out the incorrect tax demands.

The loyal reader who told me about this says that HMRC have told him over the phone that it will take between 6-8 weeks to resolve cases, and that thousands of people (and many companies) have been affected.

I would be grateful to hear from anyone who has been affected by this cock up.

Additionally, I am at a loss to understand how a "real time" system can process the same data twice and double it up? This sounds to me more akin to a batch processing system, where the same data is fed through twice without being checked.

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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Death and Taxes - HMRC's Bespoke Approach

Irrespective of the fact that people pay taxes during their lifetimes, the state still requires its pound of flesh when they die.

However, although it won't cut the taxes due, HMRC is going to cut down on the amount of information it requires for the bereaved to reclaim tax or pay tax when someone dies.

In 2012, HMRC gave a commitment to improve its service for bereaved taxpayers. 

One of the main changes will make relates to form R27, which is for reclaiming tax or paying tax when someone dies. The FT Adviser notes that of the bereavement calls received by HMRC, 34% were about filling in the form and 15% were to get an update on the progress of the form.

HMRC, in an effort to free up its phone lines, will now use real time information to obtain all the pay and tax information it needs from bereaved taxpayers, making the form R27 unnecessary and ready for removal on 13 October.

For PAYE taxpayers, there will be an automated process, and for self assessment taxpayers there will be what HMRC calls “a tailored service,” which includes letters that match the individual’s circumstances.

According to HMRC, removing the form means taxpayers will get their tax affairs sorted quickly and need to contact it less. That of course is only true if the data used by HMRC is accurate.

As the old saying goes, there are two certainties in life death and taxes!

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 Delays SME Late Filing Penalties

In theory, as from 6 October, HMRC were to have introduced late RTI filing penalties for PAYE for all companies.

However, the great laid plans of mice, men and HMRC are prone to fall apart. As such, it should come as no surprise top learn that the late filing penalty regime for businesses with less than 50 employees has been delayed until 6 March 2015.

HMRC have put a gloss on this, by saying that it will ensure a "smooth transition" etc.

"Employers with fewer than 50 employees will face automated in-year penalties for late real-time PAYE returns from 6 March next year. 

Those who employ 50 or more people will face penalties from 6 October 2014. 

HM Revenue and Customs (HMRC) will send electronic messages to all employers shortly to let them know when the penalties will apply to them, based on the number of employees shown in the department’s records. 

Ruth Owen, HMRC Director-General for Personal Tax, said:

”Real Time Information is working well. Our most recent figures show that over 95% of PAYE schemes making payments to individuals are successfully reporting in real time, and 70% say that it is easy to do.

“We know from our experience of rolling out of RTI that to ensure a smooth transition for our customers it’s best to introduce changes in stages. This will allow us to update our systems and enhance our guidance and customer support as needed. We know that those who have had most difficulty adjusting to real-time reporting have been small businesses, so this staged approach means they have a little more time to comply with the new arrangements before facing a penalty. 

“We believe this is the best approach for HMRC and our customers, as we all get used to the new in-year penalties.” 

Where employers believe they have a reasonable excuse for sending a return late, they will be able to appeal using HMRC’s new, online appeals process for automated penalties. This should speed up the appeal process for businesses and HMRC. 

In the run up to March 2015, HMRC will examine other ways to encourage employers to comply with the rules, in addition to financial penalties."

The reality is that this is the third delay. As Elaine Clark says, this is great news for SME's.

However, what the fark is really going on in the HMRC bunker?

Smells of cock up to me!


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"