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A COUPLE OF months on from the submission deadline and the annual tax return melee is a dimming memory. But there is something still nagging away at me. Gripes at HMRC are nothing new and hardly a week goes by without the department contributing directly or indirectly to problems for my staff and clients. However, as I take the opportunity presented by this quieter time of year to look back at the past few months, the number of new areas of complaint has been startling, and all at a time when HMRC have launched something of a charm offensive on the unknowing public. But what really concerns me is that this coincides with what I see as a very worrying and steady undermining of the appointed agent. Whilst many articles allude to this and most of the instances I am raising are hardly original, I would very much like readers to consider carefully what follows as a whole and let me know if they think I'm simply paranoid or spot on the button. If nothing else, it may be comforting for all us practitioners to know we are not alone! Maybe HMRC would care to comment?!
Opening gambits
First then, the following have been noted over the months leading up to 31 January.
1. HMRC staff are no longer giving their surnames to callers. After all why should we be able to know who may be feeding us a load of old tosh and is about to vanish into the ether without having done as agreed!
2. Then there are these quite disgraceful 'enabling letters'. If you don't find them insulting, both personally and professionally, then you should. How would you feel, upon entering the local doctors' surgery, if you were handed a letter from the Government's Department of Health letting you know that there are frequent errors in doctors' diagnoses and setting out some areas they might be missing? Ludicrous? So why should we have to put up with it? What does it say about HMRC's respect for our qualifications? Despite claims that they are just trying to help, nothing will convince me these are not a blatant attempt by HMRC to undermine accountants and panic taxpayers. For every client who has simply ignored the letter or forwarded it without comment, I have had one who has written specifically to ask what we have been doing wrong or whether they are being enquired into, or stating that they thought we had always done things correctly and wasn't that the case. Time wasted; needless concern; relationship undermined.
3. What a brilliant idea to send out 'tax return and payment reminders' on 15 December 2005 complete with red letters for maximum impact? Another example of HMRC doing all it can to help taxpayers avoid penalty? A help to us in chivvying along tardy clients? But most of our clients received theirs around 6 January, some 17 days later. In other words, every single client whose return has been submitted in the interim received a letter implying that what we had told them had been done hadn't. The result? Totally avoidable calls well into double figures from concerned, and in some cases angry, clients. Similarly, the client whose return we submitted on 2 November, who received a reminder in January. He panics, we spend time placating him and phoning HMRC to resolve. But that's another story, best left to point 4 …
4. What is it with 64-8s these days? HMRC's increasing refusal to recognise those taxpayers who have appointed agents in precisely the manner required of them is becoming a real problem. In the case of the aforementioned client, we rang the relevant tax office (remember this was to resolve a problem entirely of their making) to be told that we were not shown on their system as agents and would have to submit a 64-8. When we informed them that one had been submitted five years ago and that they had since happily copied us in on correspondence, did they apologise and run off to check their system? A little rhetorical question there! In a completely unapologetic tone that implied we were lying, the 'officer formally known as someone with a surname' said we would have to fax him a copy. The end result is an unhappy client and costs that we are going to struggle to recover. And all this after doing nothing whatsoever wrong! Finally on this matter, can it really be acceptable, if I hear correctly, that 64-8s now take 21 days to process on average?
5. The refusal to issue receipts for tax returns delivered by hand has been covered at length elsewhere, but am I alone in waiting for the first £100 penalty for a return we know to have been delivered in time and which the client refuses to pay on the basis that we must have been at fault?
6. I have no problem with the payee name on HMRC cheques changing, but the timing of the change and the virtual absence of prior notification were appalling. It was not until December that we noticed purely by chance that 'Inland Revenue Only' was a thing of the past. I know (at least I hope I know!) that cheques to 'Inland Revenue' will be cashed without comment, but did we need the 20 or more calls in late January asking whether we still needed the cheque as requested? Why on earth could this not wait until after 31 January and where was the unequivocal notice in advance? And it is not as if HMRC themselves can manage the change. I have numerous examples of clients receiving demands payable to 'Inland Revenue' after ones stating payable to 'HMRC'. We even received this week a request from an Inspector for a settlement cheque on an enquiry to be paid to 'Inland Revenue'!
7. A further bug-bear of mine is highlighted at this time of year: the near constant change over the past couple of years in tax district names and locations. Can anyone beat our record of the taxpayer moved three times in ten days? The names get longer and longer and trying to pinpoint a precise district gets harder and harder. HMRC have spun this to taxpayers as an altruistic attempt to improve quality of service. But it feels like a cost cutting exercise to maximise the realisation of property assets.
The battle royal
Maybe I'm just hyper-sensitive at this time of year. Or maybe not. Here's a taste of February and March. Can you spot the recurring themes?
Perpetual cheques
A 93-year old client received a self assessment tax calculation just before the end of January showing £1.98 due by 31 January 2006, but taking no account of anything paid on account. I've lost count of the number of clients who are panicked into a phone call to us by a liability that differs from the position we have told them to be the case. Yes, there is a paragraph further down explaining that the figures take no account of any payments made, but for non-accountants this is akin to reading something in a foreign language. The statements only work if they are read in full and with a reasonable working knowledge of self assessment. Our client panics, walks half a mile, gets on a bus, goes into her building society, is refused a cheque as she cannot give them a reference (shame on you Abbey) and eventually sends me a cheque payable to 'Post Office' for £1.98! In fact, we had calculated her liability a month previously and were holding her cheque, but one poorly worded form sends an infirm elderly lady on a pointless wild goose chase.
We told another client to pay £400 on 31 January only for him to then receive a tax calculation showing £600 more than that. The cause was our call to HMRC for the figures to go into boxes 18.1 and 18.2 on his return. It transpires that the figure for 18.2 we were given should have been nil, not £600!
Stalemates
In one week earlier this month we have had eleven tax calculations, as opposed to the usual acknowledgment slips, that report changes HMRC have needed to make. In a couple of cases prior year tax in a coding was at fault, but in the rest, the discrepancy arose because the return had been inadequately processed by HMRC. In one case, the return only included six entries, and three of those were not posted!
Next is the 96-year old client, whose form R40 was submitted in July, showing a repayment of about £40. Despite processing similar forms for the past three years without requesting original P60s, this year proved different. Furthermore, and never mind that the P60 information should be available internally to HMRC, they compounded matters by sending their letter to a previous address of ours that we have not been at for almost five years.
Then there was the pointless form CA000259 from the Contributions Office sent direct to a client requesting all the details on the P14 submitted to HMRC last May. Should not HMRC be able to check this themselves? The client has asked if we've been operating the PAYE scheme correctly.
New-look PAYE coding notices are upon us. Gone is the simple format, to be replaced by a veritable essay, packed full of detail and touchy-feely helpful prose. All good stuff in theory. In practice, we've had call after call querying the assumptions being made. If a taxpayer has total taxable income of approximately £19,000 in each of the past three tax years and no change in his circumstances has been notified to HMRC, then why do HMRC estimate income of £24,500? What about all those unrepresented taxpayers, in particular the elderly, who have no-one to check their codes?
We are finding it harder and harder to get through to HMRC offices (although, as recently reported, Benefit Offices are even worse). So much for the improved efficiency promised by the District consolidations.
Skewered
A client's payroll inspection last year resulted in a spin-off status enquiry. The Officer dealing with the matter received a letter from us last November enclosing a form 64-8 and informing her that all future contact and correspondence was to be via us. No problem there then. So why did the company's director subsequently receive four phone calls in as many days from that officer pressing for a meeting that week between her and the director at the client premises on the status matter? Upon the director informing her that we would be responding to her queries in writing on their behalf, the Officer's angry reaction was to state that this was unacceptable, that she could insist on the meeting and implying obstruction on his part. Where do you start on this one? Ignorance of the 64-8 is not an available defence this time. She also knew full well she had no statutory right to demand a meeting. At best incompetence; at worst wilful negligence.
Finally, there is the self-employed client of mine who blacked out last summer, spent two months in hospital, much of it unconscious, technically dead on a couple of occasions. When he was finally released home he found himself badgered by HMRC over an outstanding tax return (he's never been that organised) and tax they believed to be due. I was unaware that he had finally been allowed home, and like many taxpayers his automatic reaction was to ring HMRC. A couple of days later the 'Business Support Team' (this always makes me laugh, a touch hysterically, and reminds me of the fox offering the gingerbread man a lift across the stream) had him booked on a 90-minute 'Self assessment for self-employed' seminar and the 'business adviser' had him into his office to compile together the missing accounts of his business. And all this with an authorised agent on the system!
En passant
Oh well, I can always take my mind off all this and spend what little time I have left checking in all those confused clients who incorporated on a now-reneged promise of lower tax years back, then struggled to comprehend the mind-numbingly stupid NCDR rules, only to be told that we are back where we were at the outset except for the fact that, if they and their spouse are the shareholders, they have now risen to the very top of Gordon Brown's 'most wanted' list. We have 'enjoyed' all those little debates about the possible consequences of dividends dared to have been paid in accordance with shareholdings, how they should be disclosed on returns and the need to mentally plan for possible tax consequences of entirely legitimate actions taken years previously. And if they work in the IT industry, we have a little IR35 chaser to spice up matters even more.
Then we have the cheery debates about our increased fees (or reduced recovery). The basic human trait of always wanting to 'shoot the messenger' will inevitably strain our ongoing relationship with clients. But if the client mentions in passing that he needs to get to the cash-point so he can pay his gardener or that his son is doing a bit of casual work for peanuts cash in hand, I can always get him back by shopping him. Excellent.
Selfmate
It's not as if it's worth me trying to think up anything remotely 'clever'. If I did come up with something original, I'd have to flag it up for HMRC in advance. And as for the more established planning opportunities, who knows when they will be wiped away with scant regard to steps already taken, leaving a client once bitten, twice shy and that bit more wary the next time we attempt some tax planning? And anyway, I am still smarting from providing proactive inheritance tax planning and the consequent introductions I made for a number of our few wealthy clients that led to them setting up trust schemes to remove the main residence from their estates. Fees of well over £10,000 each (not mine!) were incurred, only for them to see the goalposts moved and 'retroactive' pre-owned assets legislation steam-rollered in, leaving them with another chunk of fees in getting everything unravelled. I wonder how they'll react to the next spot of proactive advice?
We did try last year when the impending A Day was at last giving us something to shout to our clients about regarding pensions. Residential properties into pensions, in these times of buy-to-lets? What a boon. Like many firms we studied the literature, spent time and money on attending training courses and investing many hours with clients discussing the opportunities available to them; only for the Government to change its mind after Royal Assent had been granted! In one moment, we had to write off thousands of pounds of client time, not to mention the internal costs of training and the like and then explain to the clients why their newfound interest in pensions was suddenly misplaced. And all this from a Government that is telling us we have a pension crisis and that we urgently need to provide more for our retirement! This being the same Government that pilfered pension funds by ending the repayment of tax credits on dividends.
Checkmate
Returning to HMRC, the simple fact I must clearly accept is that all my clients, until they prove unequivocally otherwise to me, are cheating, dishonest, tax-avoiding money launderers who should be hung, drawn and quartered if they do anything but pay every penny of tax due from them without mitigation even if permitted (or not prevented) by statute. If I accept this, then everything makes perfect sense. Ignore the example of the person I was told about with £200 million of 2004-05 income who paid tax at an effective rate of tax of under 3%. Why would the Government want to go after him and his highly paid advisers when they can have a go at the real villains looked after by firms such as ours?!
As you may have guessed from the title and subheadings, I play chess and also run a kids' chess club. In these days where everything is fed to children on a plate and made easier for them (why read a book when you can watch the film, etc.), what I love about chess is that it teaches you the consequences of your own actions. There is only skill, or your opponent's lack of it. Of course many do not like this as we tend to prefer luck to compensate for our lack of skill rather than actually working to improve it. I believe this to be a life lesson well learned.
So why is it that I spend much of my working week dealing with an organisation that flouts that most basic tenet of civilisation that all are innocent until proven guilty, and can make any number of errors without being brought to effective account?
Dealing with HMRC is like playing chess with an opponent who can at any time take a move back, add a piece he likes to the board, remove one of yours just because it helps him or go back any number of moves and simply change what happened subsequently. But they don't have to face the consequences of their own actions. If they did, maybe we wouldn't get the stream of appalling legislation, the constant need to re-interpret and add to statutes to deal with unforeseen gaps, the disgraceful trend in 'retro-active' legislation and so on. No wonder dealing with HMRC reminds me of the 'zugzwang': a situation in a chess game in which a player is forced to make an undesirable or disadvantageous move!
I have learned to live with HMRC's failings over the years, but having my qualification, professional ability and relationships with my clients undermined so persistently and wilfully is not acceptable. I have it on good authority that HMRC call their constant legal attacking of tax planning schemes 'commercial disruption', the intent being to ensure taxpayers witness the resulting furore and are discouraged from taking similar courses of action. I wonder what they call this burgeoning anti-agent stance?! Can our collective voice not be heard?
Just a thought …
Jonathan Hankinson is a partner in David Lindon & Co and can be contacted by e-mail at jonathan@davidlindon.co.uk.
Jonathan Hankinson's third point about the issue of reminders which arrive some 17 days later is no doubt familiar to all of us.
Of more concern is the fact that Royal Mail aim to deliver second class post within three working days. How do we account for the extra delay? Is the Mail failing in its duty or is the date of issue no longer to be relied upon?
HMRC are now issuing surcharge notices with thirty-day time limits for appeal. Date of receipt of one issued 20 March? 3rd April! Where they allow a period of grace for late delivery it is only five days, perhaps this should now be extended by reference to the time it takes to deliver their own letters.
We are a small firm of accountants and we can recognise all the frustrations/grievances detailed. The level of service provided by HMRC is quite dreadful and worsening. It is hard to convey this message to clients and the amount of unproductive time spent trying to rectify errors made by HMRC is increasing each year.
Have you tried using the online authorisation procedure? Great; in theory. We did this for a client who we had acted for for many years. Upon trying to file the ITR online in January, we were informed we were not noted as agents. Strange, considering we had correspondence from HMRC relating to this client from 2002 and earlier. In order to rectify matters, we submitted a paper return and went through the online authorisation procedure.
Some weeks later we received a penalty notice relating to this client. We phoned up to dispute this as we knew the return had been sent in an envelope with another form logged as received on 24 January. We were told we were not noted as agents, even though we had been sent a penalty notice that day! HMRC insisted that we should send another 64-8. Furious, I lodged a formal complaint, with the backing of the client, and am awaiting the response.
There is obviously a major problem with the online authorisation procedure. Clients appear briefly on your online list and then vanish. Easy to rectify, waste yet more time on the phone to the Online Helpdesk, go through a barrage of security questions for each missing client, obtain a case reference no. and wait. Incredible.
This is not just an isolated example. Hours and hours are wasted each year, dealing with absurd call centres and a Revenue culture where they can make as many mistakes as they like, but the taxpayer can make none.
Looking ahead, we have the delights of the new CIS rules (no doubt unworkable) and the new 'improved' shorter filing deadline. Hard to see how that benefits anyone except Gordon Brown. A very neat £100 stealth tax.
I have just read [the 'Zugzwang'] article in Taxation magazine. It's a really sad thing to say, but you are 'spot on' with every paragraph ringing true. Would the Revenue prefer to deal with taxpayers directly? In that event, I suspect the error rate would increase hugely and Revenue time involved to resolve matters would also increase. It's surely better for the Revenue to make advisers' lives easier particularly when we are trying to help taxpayers through the ever-increasing complexity of the tax legislation.
Your experience mirrors ours — I'm currently trying to chase down an NT code from HMRC where we submitted the form to the Revenue in August 2005 and they have lost the form. They originally wanted a new form signed by the client and he's now [abroad]. They wrote to him (despite the 64-8) at his
Time and time again we struggle to recover fees correcting the Revenue's mistakes and errors, but woe betide us or the client if we make a mistake — negligence lawsuits and cost bearing beckons. In essence we are increasingly doing more of their work for free at greater risk.
Given Gordon Brown's raid on our pensions we will all probably have to work until we are 78 — a comforting thought. Perhaps we should all become civil servants and be featherbedded with luxury pensions, all paid for by the taxpayer!
I have just read your article in the 30 March edition of Taxation, nodding throughout like one of those damned dogs you see in the back windows of cars. Perhaps I have not suffered all of the problems you have experienced (or did they simply flow by in the maelstrom without my noticing?) but my feelings and oft-expressed views have been very similar.
However, there are three aspects of recent HMRC developments that I am surprised you didn't mention:
1. The eagerness with which HMRC issue letters to clients advising them that they, HMRC, have decided that they do not need to complete a tax return in future, especially where the taxpayer is often entitled to a repayment.
2. HMRC's very generous offer to clients to include their higher-rate liabilities on unearned income in their notice of coding (especially for pensioners) thereby accelerating the tax take.
3. Where a tax calculation is issued and there is a small difference in the tax payable, the statement that HMRC have made a 'correction' to the return, thereby insinuating that the agent got it wrong!
I have felt for some considerable time that there appears to be an underlying intention on the part of HMRC to drive a wedge between taxpayers and their advisors by an unhealthy trickle of insinuation and an intention wherever possible to bypass the agent and go direct to the client.
Fab article — reflects this firm's sentiments well. We are getting 'fed up' with the cynical plundering of our tax system, the systematic incompetence and, frankly, the arrogance that has developed.
Thank you for taking the time to put this to paper.
Just very briefly to say how much I have enjoyed reading your article in Taxation and to say how your experiences match those of our firm. The saddest thing is that actually I am not convinced it is deliberate — just ill thought out and unplanned!
I read your article in Taxation with interest, having come across quite a few of the points myself.
On the R40 issue, we have reported the problem with P60s to 'Working Together' who would not take this issue on board, on the basis that it was not sufficiently important to discuss; we have also taken this to local tax offices who have confirmed that the tax offices are uniformly and consistently ignoring their own procedures. What I have therefore done since about July last year is to staple the original P60s/P45s to each R40 sent.
My concern with doing this is that as it has to be an original that is sent; what happens if the Revenue loses the R40 (they seem to do this fairly regularly)?
What is causing the problem of course is the delay with processing P35s this year — an unforeseen way in which a failure at one part of the Revenue systems causes chaos at another part.
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Returns for amendment being returned to our clients rather than to ourselves, even though they were originally submitted by ourselves.
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Informing HMRC of the death of a client in November of 2005, and explaining that the 2005 Return would be not be submitted on time. Acknowledgement received, but widow still issued with penalty notice in February of 2006.
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2005 tax returns hand delivered to local office by due date, but penalty notices still issued on February of 2006. Receipts not given for hand-delivered items.
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Case under distraint procedure. Outstanding tax return — very clearly marked to be a distraint case — hand delivered to local office. This was not logged by that office and was simply placed into their internal mail system, turning up at the appropriate tax office one month later.
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Client telephoned HMRC to complain he had not received tax refund, to be told his return had not been submitted by ourselves, even though we had hand-delivered it! Several telephone calls later HMRC admitted that they did have the form, but this has caused a considerable lack of client confidence in ourselves.
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Hand-delivered returns to local office have not been logged as received, but all put into the internal mail system, turning up several weeks later in some cases, and not at all in other cases. A complaint to the Area Director assures us that matters will improve, although we are yet to be convinced.
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Postal mail with enclosures to HMRC offices being detached from its enclosures, and HMRC then informing us that we have not attached the enclosures.
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Requests from HMRC being sent directly to our clients requesting P60s, etc., despite our being registered as agents. HMRC appears to be attempting to keep us out of the loop at every opportunity.
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HMRC correspondence no longer includes a direct dial telephone number, by which to speak to the officer concerned with a particular case. HMRC, of course, have the benefit of being able to speak to us whenever the need arises.
I am a sole practitioner and I have just read your excellent article in Taxation.
My experience with HMRC is the same as yours and I hear exactly the same sort of grumbles when I attend at my local society of Chartered Accountants.
I hope someone in the Revenue takes notice of what you have said, but I'm not holding my breath!
I could not have put it better myself. I think that I have encountered all your points; it is a plot to deter clients from taking professional advice. Today: only to my client (64-8 lost) a request for outstanding tax plus first payment on account for a trade that ceased in November 2004 and for which a refund of £500 is due.
No, I don't think you are paranoid and empathise with most of the issues that you raised in your article. I, for one, will be interested to see if the Revenue — I'm sorry HMRC — respond. You could also have added the withdrawal of ELS, allegedly on maintenance cost grounds.
I was angry about the way Gordon Brown blamed professional advisors for what he regards as abuse of the nil rate corporation tax band, so depriving the country of roads and hospitals, etc, etc. Did none of his highly paid (and highly-pensioned) advisors work out that if they dangled the carrot of £10,000 tax free per annum, individuals would queue up to take advantage of this. Hello — is anybody there?! And then, rather than having the courage to come clean and say it was a bit of a mistake, he introduces the disproportionately complicated NCDR rules to which you refer.
There are also a couple of further points to consider.
1. The retrospective — no I'm sorry, 'retroactive' — legislation on pre-owned assets that is sufficiently complex that HMRC have had several stabs at the guidance notes.
2. The proposed changes to the trust regime, again retrospective in their effect, made without any consultation, notwithstanding the consultative process on trusts that has been taking place which together with the proposed advance to the self assessment deadline he did not consider to be sufficiently important to warrant a mention to Parliament in his Budget speech.
Many thanks for a brilliant article in Taxation of 30 March, I could not agree more with what you say, though to be fair I have not come across, yet, the 'rude aggressive type' that you describe, though I do know they are about.
I only have a small practice and agree entirely that the Revenue have failed to get to grips with self assessment and are now making more mistakes than ever. For me it has got so bad that for the first time I have opened a new time costing file called 'HMRC — Wasted time!', and for the year to 31 March 2007 I am going to monitor, with documentary evidence all the time I spend sorting out HMRC errors or inefficiencies and at the end of the year I shall send the details to Dawn Primarolo, with whom I regularly have correspondence about Revenue inefficiencies. I do not seem to get very far but it makes me feel better, and also it keeps my MP informed of the chaos within HMRC.
You did not mention in your article the Contributions Office. Last July I sent off an application for a client to start paying Class 3 NIC by direct debit. I now have a file about 1/2 inch thick in letters including two letters of complaint, which went unanswered, and it was not until I finally got a telephone number through my local tax office for the director's office that I believe it is now going to be sorted out with the first contributions being taken by direct debit this April, leaving the whole of 2005-06 to swept up later when they carry out their annual review in about 18 months time. Wonderful for my client's cashflow, but a bit of a disaster for HMRC!
I must admit I did not know about the 'HMRC payee' bit. Do they really know what they are doing, I could provide you with documentary to show that the PAYE payslips sent out from Shipley for Month 12 verification, which quite clearly state on the back if paying by cheque make your cheque payable to 'INLAND REVENUE ONLY'. Now there is a thing!
I am just so relieved that at 66 I only now work part time and hope to give up completely in about two years from now as my practice 'dwindles away'. It is all such jolly hard work these days I am afraid, and as for the amount of legislation now spewing out it seems that things can only get worse. As for this new attack on trusts I do not think Brown has thought it through, what about life assurance policies, are they going to be caught?
I shall be interested for you to print the reply you get from HMRC about your article, if you ever hear from them. I am not holding my breath!
[The] sooner HMRC recognise they are burning goodwill with medium-sized and smaller practices daily, the sooner we get some practical sense out of them.
Only today I received a letter confirming that HMRC (Customs) will not meet with taxpayers and their advisers outside of the HMRC offices, they will not even send the papers for the local HMRC to meet with us. The bureaucratic arrogance is breathtaking. They are happy to send bailiffs, but not to discuss with the taxpayer themselves in the adviser's office.
I also note that where HMRC hold money owing to taxpayers and there is no outstanding tax to pay they resolutely refuse to accept court orders to pay the money to third party debtors. Currently, HMRC hide behind a small piece of legislation allowing this. So HMRC are against tax avoiders, use our money to pay for expensive TV adverts, but when it comes to showing responsibility to the rest of the community they turn away.
I've just read your interesting article in Taxation, 30 March 2006 and felt I had to comment. All the situations you mention are very familiar to me and as an ex-Revenue employee (from the days when a requested copy notice of coding would be popped in the post box on the way home) it makes me weep.
All my returns were submitted online, except one which — surprise — was not posted correctly and is still being sorted. There is no means of 'standing over' the additional tax, so the client continues to receive incorrect demands.
Also this week, following difficulties with a new client's records, I rang the call centre number she gave me to find out which district they were, so that I can proceed. I did not ask for confidential information, merely the address of the district to write there. I was refused several times as there was no 64-8 in place. Eventually I wore the operative down by pointing out that if I lived in the area, whatever it was, I'd look in the telephone book.
Thank you for taking the trouble to write the article and I hope you feel better for it, but I fear things will not improve.
Congratulations on your article at the front of the above Taxation. I have encountered many of the problems which you identified and share your frustration over identities and forms 64-8. I sit on a local Working Together panel which allows me to vent my spleen occasionally. Keep the pressure up — Taxation is widely read within the senior ranks of HMRC — your comments need to be heard and action needs to be taken.
I have just read your article in Taxation and I find it refreshing that someone is prepared to write in this manner. I whole-heartedly agree with everything in the article and I could add even more horror stories! Is there a collective voice for practitioners like us?
Great article and appallingly accurate in summing up the incompetence, discourtesy and disregard for basic human rights employed by HMRC.
Despite complaining on numerous occasions to both ICAS and CIOT that they are not representing our interests and that 'working together' actually means do it HMRC's way or not at all, nothing is done.
Perhaps all it would take is a campaign of civil disobedience by the professions to bring them to their senses. As a start I would suggest:
1. Refusing to accept Revenue calls unless they can provide three checks on our client's details, beginning with our agent's reference.
2. Returning all mail not containing our agent's reference.
3. Appealing every notice issued by HMRC as a matter of course.
4. Providing HMRC with our code of practice at the start of every enquiry, which sets out our policy on meetings, provision of information and time scales.
In any case, congratulations for going into print on what many professionals feel.
Your superb article has been the highlight of today. I realise I am not a voice in the wilderness.
You mentioned PAYE coding notices — why did HMRC sent hundreds out in January, many of which were amendments to ones issued a few days previously? Some of our clients had already had three, ten weeks before the tax year starts! The resultant phone calls from clients who wanted to fax over their copy so it could be checked immediately disrupted our already tight January. The attempt to collect higher-rate tax on dividend and savings income via restricting the codes, thereby accelerating HMRC cash flow, has resulted in some very complicated letters to our clients, and of course we will need to sort out future payments on account if the code is restricted, and if these are 'overcooked' then we will be incurring interest charges for our clients. Recently, I had a rather shirty lady from [an HMRC office] tell me they were working night and day to process returns (I stifled my guffaw!)
The VAT side is also rather trying, obviously very conscious of money laundering one officer has been reluctant to process our client's VAT 1 until we have provided copy orders and invoices(!) and a signed lease, and queried why he had two business bank accounts. Our client has a month's un-invoiced sales as a result of this tardiness and the registration section has not received post a week after we sent it, although it turned up an hour after we called, having tried without success to fax over a copy. Then they said they could issue the VAT number 'in a week or so'.
I fully appreciate the need for identity checks when ringing HMRC, but I do wish there could be some agent identity number to avoid me chanting out my name, the practice name, our full address including postcode and phone number. And as for penalties for non submission of partnership tax returns when the partnership cessation was clearly marked on the previous return — well I could go on (and on and on)!
The only thing keeping me going is the promise of the new CIS, and the 'incentives' for not meeting the stringent monthly deadlines.
Only yesterday, HMRC advised me that they could not (probably would not!) process a 2005-06 P35 return that was submitted in September 2005 when the scheme closed (my client was being treated for cancer and is blaming me for the length in time it takes to close his company down). HMRC are now saying that the P35 won't be processed until June 2006 for manual filing as they are concentrating on electronic returns (my clients received their refunds eight months after filing electronically last year!). As you will have guessed, my client is due a refund on his P35 (due to SSP) so can't close his company bank account and it is clear that the refund will take some time as the Revenue are clearly using bully boy tactics to force taxpayers (sorry stakeholders) to file on line or take the consequences.
To cap it all, I was chased up by a 'progression officer' from HMRC for a reply to a letter dated 28 February 2006 on an investigation. HMRC are aware that this other client has just [been] rushed into hospital, but clearly this is no excuse for the Revenue machine. I will not be rushing to keep them happy, but will ask about the Revenue's performance re the P35 client before giving any assurance on when I will reply on their investigation.
Of course we clever accountants with our tax avoidance schemes are to blame for the mess the Revenue are in.
