HMRC Is Shite

Friday, 13 July 2012

Homer To Take The Stand

Lin Homer will be giving evidence on Monday wrt off payroll deals, as per Exaro News:

"Witnesses to give evidence on Mon on ‘off payroll’ contracts include HMRC chief exec Lin Homer + Treasury perm sec Sir Nicholas MacPherson."

Tax does have to be taxing.

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How To Contact HMRC

I often receive emails from people asking how to contact HMRC.

Therefore, as a helpful reference, please see below the recent guide produced by the ICAEW Tax Faculty for contacting HMRC:

"Our new “ICAEW TAXtools 1” gives useful HMRC phone numbers, addresses, website links, and more

The ICAEW Tax Faculty has produced a useful guide on how to contact HMRC. The guide is designed to help agents quickly find the part of HMRC they need. It includes lists of useful HMRC telephone numbers, postal addresses, electronic forms and website links. It also provides information and tips on the best way to contact HMRC.

Our new guide is called ICAEW TAXtools1.

It is freely available (and not just restricted to Tax Faculty members). You can save it as a pdf or print it to keep on your desk.

ICAEW TAXtools 1 aims to help you understand how best to contact HMRC and what services are available for agents. We have prepared it in response to an increasing number of requests for help from ICAEW members who were unsure how best to resolve issues with HMRC. We also know, from our own feedback and from HMRC’s visits to agents (as part of the Action on HMRC service issues initiative), that many were unaware of the Agent dedicated lines (ADLs)and the Agent Account manager(AAM) service which were set up specifically to help agents."

Tax does have to be taxing.

Thursday, 12 July 2012

No To Retro Tax

My thanks to the good people of NoToRetroTax for their amusing video.

NoToRetroTax are campaigning against the retrospective tax legislation introduced in Section 58 of the UK Finance Act 2008.

"Section 58 targeted a legal and transparent tax planning scheme involving double taxation treaties which HMRC had known about for years. It retrospectively amended an Act of Parliament from 1987, making it appear as though the scheme had never been lawful. As a result, some 3,000 individuals are facing bankruptcy as a result of retrospective tax demands going back many years.

The No To Retro Tax campaign has been created by a group of victims of Section 58. Its members comprise professionals from a wide range of backgrounds including freelance IT engineers, property developers, and healthcare workers.

The campaign is lobbying for an amendment to Section 58(4) of the Finance Act 2008 to remove the retrospective elements of the legislation, bringing it in line with the Rees rules and HMRC protocol and meaning that retrospective tax liabilities would only accrue from the moment the intention was announced to close the affected scheme, and not for the period in which they were operating legally."

Tax does have to be taxing.

Wednesday, 11 July 2012

Good News Everyone - RTI Is Brilliant!

Following yesterday's HMRC Tweetalong about RTI, I am sure that those who took part will be pleased to know that in the view of HMRC RTI is "going very well".

Hoozah!

This is the view of Stephen Barnyard (or is it Banyard?) Acting Director of Personal Tax set out in an HMRC press release entitled "RTI pilot goes from strength to strength" issued 9 July 2012.

Seemingly, by the end of September, there will be up to 1,300 employer schemes reporting PAYE in real time.

Loyal readers know that I (and indeed many loyal readers) have a somewhat cynical view about the likelihood of RTI working on budget, on time and without cocks ups:

"There are over 4 million employers in the UK. The RTI Pilot is running with just a handful. I gather even by October 2012 the number will have only been increased to a couple of thousand. This is still only about 0.05% of the total. The plans seem to suggest that over 99% of employers are going to be brought into the scheme from April-October 2013. This is a challenging timetable to put it mildly..."

Here is Barnyard's press release in full, as ever comments and views are always welcome:

"Over 1,300 employers will join the Real Time Information (RTI) pilot between now and September 2012 HMRC announced today.

Stephen Banyard, Acting Director General for Personal Tax, said:

“RTI is on track and the pilot is going very well. We started in April with just 10 employers and now we’ve successfully received over 1.7 million individual records from 338 PAYE schemes.

“Following the success of the first pilot stage, more PAYE schemes will join the RTI pilot, as planned, and by the end of September up to 1,300 employer schemes will be reporting PAYE in real time.

“We are also seeing external confidence in the pilot and we’ve responded to that by offering more large employers, payroll bureaux, new employers and software developers the opportunity to join the RTI pilot or to expand existing involvement in advance of the launch date in April 2013.”

Most employers will begin reporting PAYE in real time in April 2013. All employers will be routinely reporting PAYE in real time by October 2013, in time for the introduction of Universal Credit.

Notes to editors
1. RTI was launched in April 2012. It was expanded from 8th May as scheduled, when the first of a further 310 PAYE schemes started reporting PAYE information in real time. HMRC is on track for a further expansion in November.

2. The pilot includes a wide range of employers based on size, industry type, location, software use to ensure the pilot represents a wide employer base.

3. More information can be found here.

4. Two free webinars are also available:

"Real Time Information – an overview” – a 15 minute look at the RTI timetable, main day-to-day changes employers will see, and help and support available.

“Accurate Employee Information Matters – it can save time and money” - an 11 minute look at examples and the implications of inaccurate employee information, plus tips on how to avoid this and make sure that employee information is recorded accurately.

5. RTI will support the operation of Universal Credit – the Government’s flagship welfare programme - which brings together means-tested in and out-of-work benefits, Tax Credits and support for housing, and will improve work incentives and make work pay.

6. Follow HMRC on Twitter @HMRCgovuk"

Tax does have to be taxing.

Tuesday, 10 July 2012

RTI Q&A #RTIqa

HMRC are currently conducting a live Q&A session on Twitter about RTI, it can be followed here #RTIqa

Tax does have to be taxing.

The Secrets of The Taxman II - #Taxman

Those of you who missed the Channel 4 Dispatches documentary about HMRC's tax avoidance hypocrisy can watch it via this link "The Secrets of The Taxman".

Antony Barnett, the reporter who featured in the programme, has written an article to accompany it. I reproduce it in full below (you will see a few familiar names mentioned):

"It's a perfectly legal activity. Frowned upon by some and actively encouraged by others. Tax avoidance is now a subject that has taken centre stage of the political debate. The Chancellor has described some tax avoidance as 'morally repugnant' and The Prime Minister has called it 'morally unacceptable'.

Nobody likes paying taxes but with nation's finances in such a desperate state the job of collecting tax revenue has become vital to fund public services. And that jobs falls to Her Majesty's Revenue and Customs.

Recently HMRC has been criticised for doing 'sweetheart' deals with companies like Goldman Sachs and appearing not to care enough about avoidance schemes like the one used by comedian Jimmy Carr to avoid paying income tax. To some, it has appeared that when it comes to paying tax there is one rule for the rich and big business and another for everybody else.

We at Dispatches decided to take a closer look at those who are running The Revenue. At the top, is a board with non-executive directors who have the job of holding the HMRC to account. These directors are appointed to ensure the highest standards of governance and advise on the Revenue's strategy.

The first board director we looked at was Phil Hodkinson, a former finance director at banking group HBOS plc. Hodkinson has a very important role at the Revenue as he is the chair of the HMRC's ethics and responsibilities committee.

On the HMRC website it states that as well as being a trustee of the BBC's Children in Need he was a director of a FTSE 100 company called Resolution Ltd, where he earns more than £125,000 a year for a few days work a year. Following a few inquiries about this company, it quickly emerged that Resolution Ltd was not structured like a typical FTSE 100 company.

Resolution Ltd is in the business of buying - and within a few years - selling life insurance firms for a large profit. Although its main operating business, like Friends Provident, are all in the UK, the listed firm is actually incorporated in Guernsey for tax purposes. This means the company's board, of which Hodkinson is part of, has to fly to Guernsey to make key strategic decisions.

Why would a company go to this length? Resolution Ltd and Mr Hodkinson insists the company is not in Guernsey for tax purposes but other financial reasons. Yet that appeared to contradict a statement in Resolution Ltd's own company documents. Tax experts we spoke to explained that one tax Resolution Ltd will not have to worry about is a tax on any capital gain they make from selling a life insurance firm.

If they were resident in the UK for tax purposes, then they might potentially face a large tax bill when they dispose of parts of their business. There are some exemptions that might apply but the taxation of life assurance funds is very complex and being offshore in Guernsey means Resolution Ltd does not have to worry about any future corporate taxes on the sale of UK businesses.

Mr Hodkinson told us that as a board member of HMRC it was important to him that tax avoidance wasn't a motivation for being in Guernsey and that the Revenue was aware of his role with Resolution Ltd.

Dispatches also examined the outside interests of other board directors. Until a few days ago, John Spence chaired the HMRC's audit and risk committee. Mr Spence is also non-executive chairman of SpicerHaart - an estate agent and financial services group.

One of the most controversial areas of tax avoidance is schemes to enable the wealthy to avoid paying stamp duy when they buy a property. We were surprised to discover a manager at one of SpicerHaart's branches advertising that he could help buyers avoid up to 50% stamp duty, which he confirmed through a series of emails and a phone call.

We decided to ring a few more branches up to see how widespread this was. We called a number of branches of Fine, SpicerHaart's top-end agency, and one of their associate directors said he'd be able to help us avoid stamp duty using a perfectly legal scheme. As a prospective buyer, we arranged to view a £2.6m property he was selling and when we met him the SpicerHaart employee claimed if we used the scheme we could avoid paying more than £50,000 in stamp duty.

He told us he'd already helped tycoons from China and India avoid large stamp duty bills.
Mr Spence told us that SpicerHaart does not condone any schemes that avoid stamp duty and the two managers Dispatches had spoken to had broken company rules.

During the course of our investigation we also discovered that the outgoing chairman of HMRC, Mike Clasper, was a director of subsidiary company of Which? Ltd, which uses the offshore tax haven of Mauritius to invest in its publishing venture in India. Tax campaigners claim companies use Mauritius in this way to avoid paying certain taxes in India.

Clasper told us the company was not avoiding taxes either in India or the UK.

The man who will be replacing Clasper is Ian Barlow, who was a senior partner of accountancy firm KPMG. When we looked at his track record we discovered that during the time he headed up KPMG's tax department the firm was involved in a number of controversial tax avoidance schemes that ended up in court. One was aimed at helping a corporate client avoid some £4m in VAT.

The HMRC told us they were aware of Barlow's past and had hired him for his extensive knowledge of tax.

In its attempts to bring in more tax revenue, the HMRC has recently awarded contracts to a number of debt collecting agencies to chase upto £1.5bn in unpaid taxes. As part of our investigation, Dispatches decided to look at some of these firm. One company that won a contract to collect £100m in unpaid taxes was Apex Credit Management Ltd, which is based in Stratford-upon-Avon.

But once again, inquiries quickly began to reveal it was not as simple as that. A corporate ownership structure emerged that revealed Apex Credit Management Ltd was ultimately controlled by a firm based offshore in Guernsey. While this is all perfectly legal, tax campaigners might ask if it's appropriate for HMRC to award a contract to collect UK takes to company whose main corporate owner is located in a tax haven.

HMRC told us that Apex was registered in the UK and won its contract through a proper tender process. It added there was no legal reasons to exclude them."

Tax does have to be taxing.