HMRC's Private Digital Company

HMRC is apparently on the cusp of creating a new organisation which will take over responsibility for IT work previously outsourced to private companies (ie that work currently denoted as Aspire)

According to Government Computing, from November 2015, developments around case management, Customs and International as well as third-party supplier contracts may be delivered by what some have described as an "HMRC digital company".

The organisation is understood to be a limited company wholly owned by HMRC.

HMRC is also expected to announce that Capgemini will be providing 'test and release' services until 2020 during the digital transformation process. It is understood that up to 250 Capgemini jobs may be transferring to the new company.

Tax does have to be taxing.

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HMRC Joins The Private Sector

HMRC are setting up a company in order to run some of its services...hope it will pay the maximum tax possible so as to avoid criticism...

— John Andrews (@jmalitrg) August 5, 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.

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Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

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The Road To Privatisation?

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

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

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

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

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

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

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

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

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

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

Notes to editors

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

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

Tax does have to be taxing.

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"

HMRC's Head In The Clouds

HMRC have announced that it will be moving data currently stored in local offices to G-Cloud Services (a cloud based storage system), between now and Spring 2013.

A somewhat "challenging" timeframe I would have thought!

The contract has been signed with Skyscape Cloud Services.

As per the company website:

"The Skyscape Cloud Alliance partners; QinetiQ ,VMware, Cisco, EMC, and Ark Continuity bring together an end to end cloud solution which is Skyscape. This Alliance also provides a collaborative resource which drives innovation and our technical product development programme.....

QinetiQ is a FTSE250 company and one of the top 10 largest UK employers of science and engineering graduates. QinetiQ is at the heart of Skyscape and uses its domain knowledge to provide technical advice to clients in the global aerospace, defence and security markets. QinetiQ’s unique position enables it to be a trusted partner to government organisations, predominantly in the UK and the US, including defence departments, intelligence services and security agencies, where its world leading cyber security capabilities raise awareness of and deliver solutions for hacking and malware."

As per Wikipedia:

"In 2007 the National Audit Office conducted an inquiry into the privatisation of Qinetiq to determine whether UK taxpayers got good value for money from the sale. The NAO inquiry looked at the following issues:

• choice of privatisation strategy;
• management of the process (the split of the Defence Evaluation and Research Agency into two, the sale to Carlyle and the flotation);
• costs incurred and the proceeds achieved; and,
• whether the deal met its objectives.

In November 2007, the NAO reported that taxpayers could have gained "tens of millions" more and was critical of the incentive scheme given to Qinetiq managers, the 10 most senior of whom gained £107.5m on a total investment of £540,000 in the company's shares. The return of 19,990% on their investment was described as "excessive" by the NAO. The role of Qinetiq's management in negotiating terms with the Carlyle Group, while the private equity company was bidding for the business, was also criticised by the NAO. Carlyle bought a third of the business for £42m which grew in value to £372m in less than four years."

Here is the HMRC press release in full:

"HM Revenue and Customs (HMRC) has become the first Government department to sign a contract for the delivery of G-Cloud Services over the Public Services Network.

The department has signed a contract with Skyscape Cloud Services for centralised data storage in the G-Cloud. Moving to cloud storage will provide cheaper, more secure and greener data storage for HMRC. It will also enable the department to move forward with its deployment of the Government End User Device Strategy, designed to increase the efficiency of the public sector and improve front-line services.

The contract was awarded via the UK Government G-Cloud framework, which enables the rapid sourcing and deployment of secure, low-cost utility services to the UK public sector. This is the first major service contract to be awarded via the G-Cloud by an organisation as large as HMRC.

For HMRC the change will mean moving data currently stored in local offices to cloud storage between Autumn 2012 and early Spring 2013. This will be the first deployment of G-Cloud services over the Public Service Network, established to improve Government communication links and cut costs.

HMRC's Chief Information Officer, Phil Pavitt, said:

“This change will save over £1 million a year in running costs and will increase reliability and security of HMRC’s internal IT services. The Skyscape contract is a major step for HMRC in moving away from traditional ways of working with large service providers. And it’s a great example of how we’re exploring smarter, more innovative solutions that make life simpler for us and help us provide a better deal for our customers.”

Notes for editors
1. For more about the G-Cloud programme - http://gcloud.civilservice.gov.uk/"

As Barry Murphy, technology partner at PwC, warns in TechWeek:

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

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

We shall see!

Tax does have to be taxing.



Professional Cover Against the Threat of Costly TAX and VAT Investigations

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

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

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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

HMRC Strike

Cameron and the anti avoidance zealots will be most distressed to learn that approximately 55,000 HMRC staff are going on strike over job cuts and "creeping privatisation". Sky Tyne and Wear are of the view that the strike has been inspired by Jimmy Carr (a rather daft idea, given that the vote was taken sometime before Carrgate).

Anyhoo, the Public and Commercial Services (PCS) union members are protesting about plans to cut 10,000 HMRC posts by 2014/2015.

Ironically, according to the union, the strike is also being used as a warning against cutting resources futher; as PCS is of the view that the cuts increase the loss of tax via illegal tax evasion and via legal tax avoidance schemes.

The former point has validity, the second doesn't as tax avoidance is (by definiton) legal and legislation as to what is legal/illegal is the domain of the politicians not HMRC or PCS.

HMRC are quoted by the BBC:

"We are seeking dialogue with the PCS to address their concerns and will work to minimise any disruption to our customers.

In our 2010 spending review the government made £917m available to us to tackle avoidance, evasion and fraud. This is being used to increase our tax take from compliance work by £7bn a year in 2014/15 which we are on target to do."

The strike means that phone calls in affected offices may well go unanswered ('cough'), it will be followed by other forms of action such as a ban on overtime.

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 Walkouts

There will be "lightening (or is it lightning?;)) walkouts" (lasting 30 minutes) by 20,000 tax officers today in protest against plans to use private companies to perform certain HMRC tasks.

Two private companies will run year long call handling trials at tax credit contact centres in Lillyhall in Cumbria, and Bathgate in Scotland.

PCS are of the view that this is the backdoor to privatisation.

HMRC claim that they are using the trials to see the costs and benefits of using additional capacity from the private sector, not as a basis for replacing HMRC staff.

Tax does have to be taxing.

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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"

Security Petition

Those of you who believe that HMRC security should remain "in house", and not privatised, may find the following online petition to be of interest.

We the undersigned petition the Prime Minister to Stop plans for the Privatisation of Security within HMRC.

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"