Datagate III - An Ongoing HMRC Farce

HMRC seems to be developing an addiction to sharing people's private financial details with the wider world.

Not content with the Datagate fiasco of 2007, when a database containing 25 million child benefit records went missing, HMRC have sent by the post the private financial details of up to 50,000 people who claim tax credits to other claimants.

Claimants were sent their annual tax credit award notice, coupled with personal details of other claimants (eg earnings, bank sort codes and the last four digits of the bank account number of other claimants).

HMRC claim that this was a printing error.

By "printing error" do they actually mean IT error?

HMRC also claim that the details mistakenly sent out cannot be used to commit id theft.

This of course is bollocks, any extra details about a person's bank or financial status can make a fraudster's task just a little bit easier.

It seems that, despite numerous warnings and cock ups, HMRC still don't "get" the concept of data security.

I guarantee that the HMRC "investigation" into this will finger some junior member of staff as the official scapegoat.

Does anyone actually trust HMRC anymore with their private data?

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"

Power Corrupts - More Powers On The Way

The formation of a coalition government, one party of which is wedded to the idea of a moral crusade against tax avoidance, coupled with the fact that Britain is broke indicates that instead of cutting back on the powers granted by the last administration to HMRC there is a certainty that more powers will in fact be granted.

Accountancy Age quote Anne Redston, visiting professor at Kings College London:

"There are more powers on the way.

But we should really be putting a cap on powers for the next five years."

You have been warned.

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"

Meltdown II

Yesterday's article about the meltdown going on at HMRC seems to have stirred up a few loyal readers, as there have been a number of "heated" comments posted.

One comment that did catch my eye, in particular, was this one from an anonymous (I assume) member of HMRC.

"Muppets? If the people employed by private companies ie accnt asd book keepers knew what they were doing the "Customer Service" contact centres wouldnt be so inundated with other calls and we could deal with this mess ... caused by our PRIVATE SECTOR IT supplier. But people on here would rather blame the civil servants who have a very limited right to complain back due to impartiality etc."

Disregarding the blame being laid at the door of the taxpayer for not knowing how the tax system works, the very interesting/relevant point being raised is that the blame should be laid at the door of the IT supplier (I will also disregard the anti private sector invective, given that if there were no private sector there would be no taxes to support the public sector).

HMRC have publicly stated that the problem has occurred because the old systems contained several data sets that were not compatible when merged in the new system, and that this is a one off problem that will work its way through.

That does not sound like it to be the IT supplier's fault, but more of a case of lack of testing (which I would assume was the responsibility of HMRC who should have been driving the systems upgrade process)?

However, on the assumption that it is the IT supplier's fault my question is this:

What are HMRC going to do about it?

I assume that the contract with the particular IT supplier has penalty clauses for such issues, on this basis will HMRC be making a claim for restitution?

Were the contract not to have such a clause, then one could argue that HMRC did not negotiate a very good deal on behalf of the taxpayer.

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

Meltdown

The Independent reports that, predictably, the tax coding cock up has led to a surge of phone calls to HMRC which HMRC are simply not able to handle.

"Time after time readers report the frustration of trying to speak to someone at HMRC to put things right about their tax code.

'I spent three weeks trying to get through, beginning at 8 o'clock each morning and then at various times during the day,' says Robert Oliver of Essex. 'I finally managed to get through at 7:50 am on a Friday morning – 10 minutes before the line is officially open.'

'The system seems to be in meltdown with too many tax offices apparently dealing with people's tax affairs at random. resulting in a true cock-up and a lot of worry for people like myself,' says R J Patterson of Cumbria."

The problems will become worse.

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"

Left Hand Right Hand

The FT reports that HMRC has apologised to business owners, after incorrectly issuing demands for immediate repayment of taxes that had been deferred under the government's "time to pay" scheme.

Baker Tilly spotted the error, after some of its clients received automated letters from HMRC threatening distraint.

HMRC admitted that several letters had been sent out in error, and that anyone affected should ignore the notices.

Mike Down, who runs the tax investigation group at Baker Tilly, said:

"I guess it was a case of the left hand not knowing what the right hand was doing. But it was particularly frightening for the poor taxpayer when the letter came through."

Anyone else had this problem?

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"

Breaking Point

AccountingWeb argues, quite rightly, that HMRC is close to breaking point.

The question is do we pump more resources in to the current moribund and decaying structure, or do we let it break (as one comment states) and start again?

My view, for what it is worth, is that tax should most certainly be simplified (with a heavy emphasis on shifting revenues from income/cgt etc to VAT).

As to what to do about the structure of HMRC, that requires the appointment at the very least of good quality managers who really can manage change whilst at the same time motivating staff.

Should HMRC be demerged, and the old CE and IR departments be recreated?

Views from people actually working in HMRC would be very welcome.

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"