Sprit of 1905

I've just posted this on accountingWEB, I'm not going to hold my breath!

Is it time to stand up and be counted?

"We all know that HMRC are getting more and more power and we all know that they don’t always use that power in the most responsible way, but what can be done? Accountants and tax advisors are not known for rolling up their sleeves and painting banners, but perhaps now the time has now come to get away from the desk and make your views known. Anybody interested? Anybody got ideas to make a better tax system? Nick

www.tax-hell.co.uk "

The good people at TaxationWeb have run the first of three extracts from the e-book today, you can read it here and the book, Tax Investigation for Dummies: Everything you wanted to know about a tax investigation but were too afraid (or skint) to ask, can be bought here. If you needed more convincing an eight page sampler can be downloaded by going here and then clicking on my right eye - I kid you not!

Tax Investigation for Dummies: everything you wanted to know about a tax investigation but were two afraid (or skint) to ask

The e-book is out! Now the work starts promoting and looking for affiliates! So far www.hmrcisshite.com has run an ad and www.taxationweb.co.uk have asked to sell the book and run articles about it - should kick-off on Friday. 

Getting affiliates is the best way to promote the book, so if you are reading this and you want to earn some real money from your website, now is your chance!

Go to www.tax-hell.co.uk for more info.

Cheers Nick 

The End

At some point last month the investigation came to a conclusion. I can't say exactly when because HMRC haven't written a letter to me to say that that case has been concluded, but we came negotiated settlement before the Commissioners hearing. There have been no new closure notices.

The final figure we settled on was just over £4k - so not quite the 12k HMRC were demanding this time last year. Thanks to Chris at VennTax for putting in his skill, time and effort into negotiating the revised figure.

Robert Frost/The Road Not Taken:

"Two roads diverged in a wood, and I —
I took the 'one less traveled' by,
And that has made all the difference."

But there are times when I think: why didn't I just take the easy way! Why do I always make it so hard for myself?

This case goes to the Commissioners at the end of February, so watch this space. Results, good or bad will be posted.

QED ESC A19

Dear Dave Hartnett

Here are some get-go facts. I was on a low income. I incorrectly claimed by drawings as an expense. It was an obvious mistake - which was very clear in the return. I received a small tax rebate from my PAYE employment. HMRC now what that back.

I think ESC A19 should apply in my case. Dave Thomas, Complaint Analyst dave.p.thomas@hmrc.gsi.gov.uk said that the answer was ‘NO’ his boss Cheryl Weeks, HMRC Complaints Team Manager cheryl.weeks@hmrc.gsi.gov.uk is now reviewing the ESC A19 facts, she’s written me a letter to say that it will take her two weeks to respond. My question is this: How long does it take to read a flowchart?

Have a look above or see here for a bigger pic.

And follow the logic:

Stage one:
Do the arrears arise from HMRC’s failure to use information received per PAYE95045 – PAYE95060?

OK, I don’t know what the numbers mean but I knew what PAYE means. In 2000 I asked for a tax rebate of my PAYE tax, my file was unlogged, a technician saw that my accounts were obviously wrong and the refund was rejected, see the document here. A case like this could have been nipped in the bud with some simple remedial action - but it was not. Further notes from 2004 show that a further request for a refund was granted even though it was known to be incorrect by HMRC. That document is here.

I think we can certainly say YES to this box. HMRC had the information, they knew my accounts were incorrect, but they failed to act on that information.

OK, this takes us on to box two: Did HMRC tell the taxpayer about the arrears within the time limit at PAYE95065?

So did the then Revenue figurehead Hector give me a call or drop me a simple letter saying, “Hi, you know we say tax is simple - well it isn’t, get yourself to an accountant tute suite my son or it will be a triple serving of grief.” NO HE DID NOT!

I don’t know what the time limit is, but I think it’s safe to assume that eight years is beyond that limit!

OK, so that’s a NO taking us on to the box that reads, “Was it reasonable for the taxpayer to believe their tax affairs were in order per PAYE95080?”

Here we come to a sticking point because what is “reasonable” to one person is not reasonable to another. But I’ll bet the farm that the majority of taxpayers out there believe that their tax returns are checked before they are processed. I’ll bet that the majority who write in the “other information box” believe it will be read. Why ask for information if it’s not read?

Here is what I wrote on my tax returns: “I found the attached tax form complicated and difficult to fill out. I have done my best with it and it is correct and complete to the best of my knowledge. Given that my income is so low it should be very easy to work out my tax. For the sake of clarity I am enclosing a single column of my accounts.”

Now the question you have got to ask yourself is this: am I a master criminal trying to trick the Revenue out of cash or am I somebody who is crying out for a tax officer to double-check my figures? And when I said, “… it is correct and complete to the best of my knowledge” was that a blatant lie to hide wrongdoing or did I really think my figures were accurate?

Here’s my tip for the RIAT (Risk intelligence and analysis) team: people who are trying to slip under the tax radar don’t submit letters, which scream: “look at me, look at me!”

So I’m going to give a YES here, it was reasonable for me to assume that the figures were correct. And it was also reasonable to assume that my return was read as it was processed - as indeed it was.

And suddenly here we are! At the box that says: “Give up the arrears under ESC A19”.

In a nutshell I made small (a few hundred quid) innocent (see above) and obvious (HMRC accepts that they were obvious) mistakes. HMRC saw the mistakes but failed to act on them - indeed they refunded PAYE cash when they knew that no refund was due.

QED ESC A19

Well that’s an hour of my life gone, quite why it will take Cheryl Weeks two full weeks to use the chart is beyond me.

Nick

Happy Birthday!

Hi Dave Hartnett

Congratulations, this month my tax investigation is three years old!

Yes, I made a few mistakes with my returns, but the basics of the case are that I didn't pay much tax because I didn't earn much money - some years it was below the tax threshold!

My low earnings have been obvious for quite some time.

Why has it gone on for so long? Well HMRC would blame me for any delay (what with all that tedious complaining) but ultimately HMRC has been the one running the investigation so HMRC has to take responsibility. I think the Investigating Officer just felt that if she could dig for long enough she would eventually strike gold - she was wrong.

My case is an important one because it highlights what is in need of reform at HMRC, showing poor communication, little accountability, investigators who just won't let go because they are afraid of a 'nil' result and the running of the Tax Service like an organisation with a bottomless pit of funding. And crucially it shows the poor treatment of tax payers who are not represented they - no surprise here - are the poorest and most vulnerable.

As time passes commercial pressures will force HMRC to be more responsible and practical about investigations such as mine.

If you want to see just how bad cases are run I suggest you start by having a look at the schedule here (nice pic of you Dave) and then go to the main site here to see the horrible truth about how HMRC runs a small 'segment' enquiry.

No consultancy fee necessary - but if I could pick up £400,000 when I retire, well that would be just dandy.

Sincerely

Nick Morgan

--

Nick Morgan

The Site www.tax-hell.co.uk

The Blog http://nick-wwwtax-hellcouk.blogspot.com/

The Schedule http://web.mac.com/nickmorgan/HMRC/schedule.html

The S-Word

I’ve just been filling in the complaint form for the Parliamentary Ombudsman - one of the questions they ask is, did the department apologise when it got things wrong?

Do HMRC apologise? Oh yes. They say “Sorry seems to be the hardest word” but that’s not true for the good people at HMRC.

Compliance Officer Steve Coomber kicks us off on 24 October 2006 with, “I apologise for not returning your telephone calls.” And then we have to wait a month before, on the 24 November 2006 Complaints Officer Mrs N M Pirrie says, “I am sorry to learn of the problems you have recently experienced with our handling of your tax affairs.” And later that month we get Jacqui Lamper’s (HM Inspector of Taxes) first s-word, “I apologise if the opening paragraph of my letter… was in any way unclear.” It’s less than 30 days to her next apology on 18 December 2006, “I am sorry that you feel that the issue of £10 spent on the David Beckham book was not dealt with swiftly.”

This is the first of the unapologetic apologies, “I’m sorry that you feel…” is the playground way of squeezing in a s-word without meaning it. More on Beckham here.

On 3 January 2007 Mrs N M Pirrie returns with a new apology, “I am sorry that you are unhappy with...” A week later Jacqui Lamer is still sorry: “Sorry that I have not yet returned your documents.” Followed quickly by, “I said that it was my view that you were playing a game. If I misunderstood your intentions then I apologise.”

Note the skilful use of the unapologetic IF.

Next up is Dave Thomas of the Director's Complaints Team who delivers three quick sorries in one letter - here is a career apologiser! “I'm sorry that we have contributed to a misunderstanding here… I'm sorry if you've found the process uncomfortable… I'm sorry if we contributed to any misunderstanding on this issue.” The notes obtained through the Data Protection act show that Dave Thomas was using his position in Complaints to feed information back to the investigating officers - a common tactic.

In April its, “I apologise for not responding earlier to your letter.” Then it’s “I'm sorry that I haven't been able to listen to the audio clip…” followed by, “I apologise for the delay in replying…” and “I'm sorry but I'm still unable to listen to the audio clips on your website.” Well if you can’t listen to them then you can’t respond: top move.

On 10 October 2007 Jacqui Lamper says, “I apologise for not responding sooner.” And 14 days later she is, “sorry this is a long letter.” In December she is, “Sorry I have not been able to respond to you earlier.” In the New Year she is, “Sorry but I feel that I have already answered your question.” And later in January it’s, “I apologise for the fact that this has taken longer than I anticipated.”

It could be just me, but I am I getting the feeling that nobody at HMRC is very sorry at all.