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HMRC forcing poor decisions on businesses

/ 19 May 2014

‘Half the fines imposed on businesses for filing VAT returns late may be incorrect, according to an analysis of HMRC figures. The study showed that in 2013, 49% of the 17,200 appeals made by businesses against late-filing penalties were successful. “HMRC’s late filing system starts off with the premise that the taxpayer is wrong – you then have to prove your innocence,” said Simon Newark, a partner at UHY Hacker Young. The system of automatic fines is leading to a breakdown in trust between business and HMRC, critics argue, with many companies finding the costs of taking HMRC to tribunal over poor or incorrect VAT decisions too expensive.

HMRC investigations double in one year 

Figures obtained by the Daily Telegraph show that HMRC made inquiries about the tax affairs of 237,215 people last year, compared with about 119,000 in 2011-12, raising concerns that people who have made innocent mistakes are being targeted by the Government. The number of self-employed people investigated has quadrupled in that time while annual prosecutions have risen sevenfold in three years. An HMRC spokesman said the increase in cases was because it was holding more compliance inquiries, adding that: “Inquiries are only opened where we believe there may be a problem causing the wrong tax to be paid.”

ISAs targeted by HMRC 

HMRC has sought powers to take money from peoples ISAs in a move widely criticised by MPs and accountants, writes the Mail’s Becky Barrow. It has already been revealed that the Direct Recovery of Debts powers will include taking money directly from current accounts – including joint accounts – and is expected to yield HMRC £375m over the next four years. Money could be seized from an ISA whether it is held in cash or stocks and shares.

HMRC doubles spending on bailiffs 

HMRC is using 13 debt collection agencies in new hard line approach against taxpayers, according to a new study. HMRC spent £14.8m on external debt collection agencies in 2013 – up from £12.9m the previous year, and more than twice the £6m spent in 2011, the report says.

Sources: The Daily Telegraph, The Daily Mail, The Observer’

Seeing so many HMRC-related news stories, had a thought (we get these with alarming irregularity): the most accurate abbreviation of Her Majesty’s Revenue And Customs would be HMRAC. Then we remembered the mercilessly catchy ‘90s pop song MMMBop by Hanson and imagined “HMRAC” being similarly sung. Then we recalled our musings on a possible HMRC barbershop quartet. Then we wondered whether HMRAC or for that matter MMMBop would even work as barbershop. Not at all badly, it turns out.

MMMBop begins: “You have so many relationships in this life. Only one or two will last.” Depressingly, HMRC is one of those lasting relationships. “You go through all the pain and strife,” runs the next line of the song. Indeed. But it so happens that we are in the business of helping others to navigate through HMRC-related pain and strife. To find out how we can assist you, have a look around our website or get in touch with us. Mathematically and musically, we strive for harmonious numbers. HMRAC, da ba do wac…