Where T axpayers and Advisers Meet
12/11/2011, by Lee Sharpe, Tax Articles - General
Maths, a tax professional and one of TaxationWeb's most prolific contributors, criticises HM Revenue & Customs' editorials and for not treating all taxpayers fairly. I have now decided to stop wasting my time by no longer bothering to read any of the HMRC editorials published intermittently on the “Home” page. Why? Because they are typically full of platitudes and “PR” speak and seek continually to remind taxpayers of HMRC’s powers to levy interest and penalties etc., rather than being used to proffer meaningful, practical and helpful advice to innocent and often bemused taxpayers/advisors. Take the recent editorial “Keeping Business Records" Platitudes included: “Keeping up-to-date business records is a win-win practice for both businesses and HM Revenue & Customs (HMRC)”; and “Good record-keeping gives businesses a clear idea of their trading position and profitability, allowing them to make business decisions to ensure survival and success.” Then comes the threat: “We are looking at options to encourage businesses to improve their records including sanctions such as penalties. For now we will only levy record-keeping penalties in the most extreme cases…In the longerterm, we intend to issue penalties of up to £3,000 for serious inadequacies in record-keeping.” (my italics). Then, having made the threat, the attempt to convince taxpayers that in fact the checks with respect to the taxpayers’ business records are for their benefit not HMRC’s: “A key focus of the Business Record Checks programme is to support businesses and encourage good practice”. It would be funny, if it weren’t so serious, that HMRC have the nerve to talk about businesses adopting “A Business-Like Approach” and “encouraging good practice” when, as anyone who deals with HMRC knows, that perhaps if HMRC spent more of their time on sorting out their own internal appalling record keeping and internal business practices we, the taxpayers, would be better served. A classic example of HMRC’s apparent incompetence was recently mentioned on the tax discussion forum (Tax Mess Help!): “After preparing a case with a full summary, copies of pay slips, P60, bank statements I and my work colleagues wrote to the tax office in June I with an expected response time of 8-12 weeks. We sent the package via recorded delivery and it was signed for. After 14 weeks and no joy we contacted the office and were told that they had no record of receiving our package and to re-send. So we did and again used recorded delivery and the package was signed for. 10 weeks later and no contact, we call HMRC and they claim that they haven't received any correspondence at all despite us having signatures to prove each package had been signed for. They will ask the post room to check and contact us in the next 3 weeks. Guess what - no contact! Is there some mysterious black hole between the post room and the staff at HMRC?? This is so frustrating. We are at a loss over how to proceed! We are only looking to ensure our tax records are correct when we believe the company was at fault. We cannot have a face to face meeting with any HMRC office over our concerns, they will not deal with this matter on the telephone and twice they have lost our correspondence.” However, HMRC appear to be completely immune to the chaos which appears to exist within their own ranks (or are aware of it but choose to ignore it) yet continue to penalise the “average” taxpayer wherever and whenever possible whilst at the same time appearing to take a more “flexible” approach to certain “preferred” others: “ [Vince] Cable's office confirmed that his earnings had breached the threshold at which VAT became payable but said he had paid off the duty he owed to HM Revenue and Customs (HMRC) within a month of the issue coming to light. All Vince's tax affairs are above board, and he went out of his way to settle this quickly -- in fact HMRC let him off 50 percent of the usual penalty, his spokesman said in a statement”. (My italics) For an amusing read, look at the questioning of Dave Hartnett (Permanent Secretary for Tax) re the great Goldman Sachs “give-away” under which he (eventually) apologises for a mistake made by HMRC which, it is suggested, cost the taxpayer £10 million (yes, £10 million!): (Transcript of Oral Evidence HC1531-i) Q23 Chair: That sounds like a bit of gobbledegook. Was the taxpayer ripped off in the deal that you did with Goldman Sachs? Dave Hartnett : Absolutely not [outright denial; my words]. Q24 Chair: Did we lose £10 million that we should have had? Dave Hartnett : The sum is smaller than that [ah, not quite a denial; my words]. Q25 Chair: What was it? Dave Hartnett : I am sorry, but I am now in grievous difficulty of breaching taxpayer confidentiality [how convenient; my words]. Q26 Chair: Well, the figure in the public domain is £10 million. Our duty as a Committee is to ensure that you provide value for money in the work that you do in settling tax disputes. There is a lot of money at stake. There is £25 billion outstanding in tax disputes. Therefore, in the same way that we delve into the detail when we look at the development of fire stations or whatever, we will delve into the detail here. It appears that £10 million was lost to the taxpayer because of the deal that you did with Goldman Sachs [my italics and bold]. Dave Hartnett: Well, I’m sorry- [ah well then, that’s ok; my words]. Q27 Chair: We were ripped off. The taxpayer was ripped off. That is what it feels like. Dave Hartnett : No, I do not agree with that at all. A mistake was made [but only a small £10 million one; my comments and italics and bold]. Need I say more?
The example that Maths details above reminded me of my own experience with one particular tax office. I wrote to HMRC and chased the letter 4 weeks later to be told that they could not find it so to send a duplicate. This I did and on chasing the duplicate letter I received the same reply and was asked to send a third letter by registered post which I did. The post office confirmed that this letter had been signed for and when I phoned the tax office guess what, they couldn't find it. When asked to send a 4th letter I did a very good impression of a tasmanian devil and refused to send any more correspondence until a proper search had been carried out. The next day I received a call to confirm my initial letter had been found. Very frustrating!