HMRC Policy Illegal

BAT has won its challenge to HMRC over its policy of taxing dividend payments from foreign subsidiaries. The policy is illegal under European law, because the UK does not tax similar payments from domestic companies.

HMRC may well appeal against this verdict, as this ruling might cost it £5BN.

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"

Cost Control?

Poor old Stephen Timms (Treasury minister) is having a rather rough week this week, having first signed off on the secret VAT increase he now has been forced to admit to parliament that HMRC has no accurate cost estimates over the 25 major IT projects that they are running.

Best guess estimates are that these projects are costing the taxpayer at least £197M, small money compared with the billions that the government has risked on bailing out various banks etc.

In a parliamentary written answer Timms said:

"Many of our IT projects are at an early stage in their development lifecycle, and detailed technical solutions and IT supplier costs are yet to be established.

The figures shown below are therefore estimates and remain subject to revision, finalisation and formal investment approval."

That's all very well, but other departments have managed to provide more accurate estimates for their IT projects, and the private sector obtains cost estimates and project specifications before going ahead with projects.

Why can't 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"

The Secret VAT Increase - Darling Tells a Porky?

In an emergency Commons debate on the pre-Budget today, Chancellor Alistair Darling said that Stephen Timms', the financial secretary to the Treasury, name had ended up on the web document outlining the 18.5% VAT rate by mistake.

Darling claimed Timms had not seen it, or authorised it.

Ahem!

The Guardian says that the web document contained Timms' signature.

Is Darling saying that Timms signs documents that he doesn't read?

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"

The Secret VAT Increase

Gordon "Smiler" Brown and his Darling Chancellor were somewhat humiliated yesterday, when it emerged that they had been planning to increase VAT to 18.5% in 2011.

This embarrassing plan was revealed when a document signed by Stephen Timms, a junior Treasury Minister, was published on a government website. The hard copy version, also signed by Timms, shows no VAT rate of 18.5%.

The web version has now been removed.

Now here is where the politicians seek to cover their shame. Treasury minister Angela Eagle said that the publication had been:

"..a pure administrative error on the part of HM Revenue and Customs.

For anyone to think it is anything else is complete scaremongering and opportunism of the worst sort."

HMRC stated (as per the Guardian) that the VAT increase had been a fully worked-up option, that had been ditched at the last moment in favour of the 45% tax rate on those earning more than £150,000.

I am of the view that the buck should stop with the people who claim to be in charge of HMRC. Given that these plans were discussed at Treasury level, and signed off by a Treasury Minister, then the responsibility for the dissemination of the "correct" plans lies with the Treasury.

This is not an HMRC cock up, but a Treasury cock up; for Eagle and her colleagues to "rat out" HMRC in this way is a pretty lousy trick. However, many politicians are pretty lousy anyway.

Doubtless some poor sap in HMRC will be ritually sacrificed to protect the "honour" of the Treasury.

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"

Breach of Confidentiality?

HMRC have caused a wee upset amongst the accountancy profession, when it was revealed that names of some taxpayers who failed to declare offshore banks accounts have been passed on to an independent research agency.

What happened to the concept of confidentiality and data protection?

HMRC have sent letters to some of those who came forward during last year's partial amnesty on undeclared offshore accounts. The letters say that names and telephone numbers will be passed on, unless the recipients opt out.

Would it not have been better to ask people to opt in instead?

That being said, the idea behind the research is laudable enough in that it aims to gain an understanding of customers' experience of the offshore disclosure facility.

Sadly the opt out method used by HMRC to "understand the customer's experience" is crass, and may also be a criminal offence under the 2005 Commissioners for Revenue and Customs Act. HMRC guidance says information can be passed on with consent, the Data Protection Act says consent should be "a positive indication of the wishes of the data subject".

HMRC deny it breaches the act and notes that there are strict safeguards, as the research company has been subject to rigorous security checks.

However, I would say, as a general rule of thumb that people like to be asked first before being "volunteered" for eg surveys, organ donor schemes etc.

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"

Poverty

"Tax Credit Casualties"
MEDIA RELEASE FOR IMMEDIATE USE

19 November 2008
Tax Credit Casualties Addressing Child Poverty
The Joseph Rowntree Foundation recently published a report stating that child poverty costs at least £25billion each year in losses to the Exchequer and in reduced GDP.

Thanks to the intervention of Tax Credit Casualties, just the last 33 cases they have progressed to write-off have saved those claimants £152,900 – which in turn has saved the Exchequer, as every pound saved for claimants by Tax Credit Casualties helps to reduce child poverty.

Paula Dean, Tax Credit Casualties' award-winning case worker, said: 'We will continue to help claimants fight cases where they believe overpayments were caused by HMRC's errors and we will continue to fight for an amnesty on all such overpayments. It is not in the best interest of our society to seek to recover these overpayments when recovery means children will suffer poverty. And from the work of the Joseph Rowntree Foundation it is clearly not in the interest of the public purse to push these families back into poverty.'

Tax Credit Casualties work to address child poverty by helping the victims of tax credit overpayments know their rights, and fight recovery of overpayments which are not the claimants' fault. The errors are often caused by software problems, HMRC operator error and faults inherent to the tax credit system itself. Our work helps families on low incomes having to choose between putting food on the table or shoes on their children’s feet, by repaying a debt they didn’t cause and are not responsible for.

Paula also said: "We encourage anyone else who finds themselves in this or a similar situation with tax credits to contact us via our website address which is www.TaxCC.org"

For further information contact:
Sarah McCall
National Coordinator
07947439959 (out of hours included)

Note to editors: Full details of the Joseph Rowntree Foundation's report can be found at http://www.jrf.org.uk/pressroom/releases/231008.asp
Tax Credit Casualties
www.TaxCC.org

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"