Oversight of HMRC

Their Lordships on the economic affairs committee have mounted the anti avoidance bandwagon, and have said that tax avoidance by multinational companies was too easily carried out and ‘this damages the economy and undermines trust in the tax system’.

As noted before, HMRC and the "evil" companies that seek to avoid tax have to operate within the legal framework created by Parliament. However, the committee have ignored that point and instead have opted to blame HMRC in a report entitled "Tackling Corporate Tax Avoidance in a Global Economy: Is A New Approach Needed?"

Public Finance quotes from the report:

"There needs to be better parliamentary oversight of HMRC, so that the public can be confident that tax deals it agrees with multinational companies are appropriate.

The committee is concerned that HMRC may not be assertive enough in these negotiations."

The solution proposed by the committee is for the formation of a joint committee of MPs and peers which could, if necessary, take evidence in private to avoid claims by HMRC that it could not be held to account over individual deals because of the confidentiality of companies’ tax negotiations.

That's all very well, if the evidence taken could be guaranteed not to leak. However, given that the committee would be made up of politicians, there is every likelihood that it would leak.

Committee chair Lord MacGregor also wants large firms to publish a summary of their tax returns ‘so the public and media and ensure they are paying their fair share’.

Define "fair share" in the context of our massively complex tax system which very few people (HMRC and tax professionals outwith HMRC) actually understand ?

The committee also urged HMRC to end its practice of using staff seconded from leading accountancy firms to help design taxes.

"The risks are two-fold: that those on secondment will not have any incentive to design robust, hard-to-avoid taxes, and that when they return to private practice they will be better placed to advise how to exploit loopholes.

We recommend that the Treasury and HMRC should be better resourced to design and implement taxes, without undue dependence on short-term professional advisers."

In other words the committee wants HMRC to operate within a bubble, avoiding any contact with the real world!

Regarding oversight, the most effective oversight is that of creating a Cabinet post with specific responsibility for HMRC (ie one where the buck truly stops) outwith the Treasury.

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"

Increase In Complaints About HMRC

It seems that over the past year, complaints made by taxpayers (or is it "customers"?;)) to HMRC have increased dramatically.

One of the reasons for the “unprecedented” increase appears to be a surge in complaints about Pay As You Earn (PAYE); mainly relating to errors in tax codes issued between 2008 and 2010 that caused a large number of underpaid/overpaid taxes.

The Annual Report (year ended March 2013) by the Adjudicator’s Office (which handles complaints from dissatisfied "customers" who have already tried to complain to HMRC, the Valuation Office Agency or The Insolvency Service), when referring to HMRC, said (page 12):

"During 2012-13 we received 1331 new complaints about a range of taxation issues. This was an increase of 107% on 2011-12 and accounted for 52% of the total number of complaints received. We resolved 525, upholding 55% either partially or substantially. Our investigators mediated 15% of cases directly with customers and the department. A large number of the taxation cases reviewed related to PAYE and were considered under the provisions of HMRC’s Extra Statutory Concession A19 (ESC A19)."

In the summary the reports notes the following increases in complaints:

"The increase has all been from HM Revenue & Customs (HMRC) customers; including PAYE complaints up by 347% and Tax Credit complaints up by 59% on the numbers received in 2010-11."

Judy Clements, the adjudicator, said it has identified a number of areas at HMRC where there are “systemic failures”, resulting in poor complaints handling.

“Most notably it is disappointing that for the third year running I have seen a range of cases where specific customer needs have not been recognised or addressed. I am unable to establish whether complaint handlers are not recognising the customer need or feel they are not empowered to step outside of procedures and provide alternative support.”

She notes:

"I am disappointed at the number of complaints HMRC customers feel they need to refer to me in order to get resolution. My role should be to consider the difficult exceptions, not handle routine matters that are well within the capability of departmental staff to resolve successfully. At a time of austerity it is also important to note that the cost of dealing with customer dissatisfaction increases exponentially with every additional level of handling."

Wise words indeed!

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"

Real Time Monitoring

AccountancyAge reports that HMRC is considering daily checks on firms offering aggressive tax avoidance schemes.

At the moment anyone establishing an avoidance scheme must notify HMRC under the Disclosure of Tax Avoidance Schemes (DOTAS) facility within five days of starting to market it to clients.

HMRC can combat schemes in tribunals, but until a verdict is reached advisers can continue to market their avoidance arrangements.

HMRC's plans to monitor accountants in real time will enable it to see the schemes as they are devised, and be blocked before they reach market should they be deemed too aggressive.

The proposals will go under consultation this week.

I wonder how that will work in practice, given HMRC's lack of resources?

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"

East Kilbride Fairy Liquid Ban

I would welcome comments from HMRC staff from East Kilbride wrt the ban on Fairy Liquid in the office there.

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"

The Ongoing Clusterfuck

Loyal readers with good memories may recall that I have written a couple of times before about a loyal reader who dropped me a note concerning HMRC changing her address details (without her permission), and sending her ex husband her tax credit summary for 2012/2013.

The saga continues, and she has sent me a chronological summation of the last 6 months for publication:

"For 6 months I have been battling with HMRC/DWP - here is the chronology of everything that has happened.
----------------------------------
9^thFebruary – XXXX District Council notified me that they had suspended my Housing Benefit Claim as they were notified I no longer lived at my current address. After further investigation they informed me that they had my ex husbands address on file. They were given this information by DWP apparently. I had to 'prove' I still lived at my current address.

17^thMay – Ex husband received my tax credit annual review to his address. I phoned HMRC who were unable to explain to me how this had happened. I wrote a letter of complaint and also put in a Subject Access Request.

22^ndMay – I receive a response from HRMC, with regards to my subject access request and acknowledgement of receipt of my letter.

4^thJune – Ex husband received my NHS Exemption Card to his address

19^thJune – I received a voicemail from XXXX District Council notifying me that they wished to speak to me about my Housing Benefit Claim. When I managed to get hold of them it turns out that they had been notified of an address change again (it turned out to be my ex's new address as he had recently moved again).

23^rdJune – Still no response from HMRC to my original letter (sent on25^th May) so I send a further letter of complaint detailing the further issues.

4^thJuly – Phoned to notify HMRC that my ex husband had yet again received my documents. It turns out his new address was on my file. I updated the address details back to mine and also notified them that my son would remain in full time education from September (thus they would need to update my Tax Credit claim and need to issue a new award notice). I also informed them that I have not yet received a tax credit award for the year.

I took the opportunity to phone Child Benefit to see what address they had on record for me and it turns out that they too had my ex husbands address.

08^thJuly – My ex husband received two more letters from HMRC, addressed to me

10^thJuly – Received documents related to my 'Subject Access Request'

15^thJuly – Received 2 separate copies of the HMRC response to my complaint letter (letters originally dated 28^th June). Letter apologised, gave a brief & generic response to my complaint and informed me that I would receive £100 compensation plus £10 expenses within 21 days.

16^thJuly – Received another (third copy) of HMRC response to my complaint letter

22^ndJuly – 21 days since the date of issue on the response to my complaint letter and as of yet no compensation money has been received.

25^thJuly – 4pm phoned the number provided by HMRC, regarding my complaint response and lack of compensation payment – the phone is answered but hangs up. I phone again, the call is answered by a gentleman who tells me he will transfer me to the right person....'the right' person answers but can't hear me so hangs up. Eventually they then ring me back and apologise as there is a problem with their phone!!

I enquire as to whether there is any further details as to why the address changes keep happening. The lady informs that it is connected to CSA. Seeing as I get no child support from my ex (and NEVER have) this does not add up and I don't feel this makes sense?

The lady looked on my records and can't see why the compensation has not yet reached my account either, they also do not have an answer as to why I have not yet received my tax credit award. The lady could see an award dated 1^st July, but she also notes that on 4^thJuly I called to update the fact my son was continuing in further education and for some reason an updated award notice has not yet been issued.

The lady later phoned me back and informed me that she was having to put through the changes again, as for some reason they had got 'stuck' on the system and wouldn't issue an award.

A further phonecall from the same lady some 10 minutes later revealed that the reason an award notice wasn't issued, was because the information was about a future change, so that would not take effect until 1^st September – then a new award notice would go out!"

Have other loyal readers experienced similar problems, or is this just a one off cock up?

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"

Hartnett's £50K Holiday Bank

Richard Brooks has just tweeted the following:

"What would your boss say if you asked to cash in 70 days unused leave? Have £50k? So said HMRC to retiring D Hartnett"

Seemingly, being able to cash in such a large holiday bank is not within the rules for less elevated civil servants (I understand that the norm is about a week or so).

Comments and views welcome!

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"