After hours of listing to this message or similar ones 80% of the time I call HMRC I just wondered if you have similar experiences over recent months.

This is an indication of how much HMRC want to speak to you? From a large Government department, central to the finances of the country and to clearing the deficit, raising funds to run the country it is mind blowing that this is the response so much of the time you call HMRC.

If you finally get through there is a good chance you will find the department you’re trying to contact will have moved and you will have to go through the whole process again.

Senior staff at HMRC too often live in their own little bubble with a large lack of understanding of the world outside of HMRC and a lack of respect for the very people paying tax that fund their wages and that of other public departments. Poor communication, poor planning and poor use of resources.

90% of tax collection is done by accountants and taxpayers themselves under the “Self Assessment” system. You would think HMRC could cope with the 10% of less of the process they have to manage?

Personally I think it would save money and lead to a much more effective system to enable accountants to do more without having to go through the painful time wasting experience of contacting HMRC. That would mean less staff were needed at HMRC and things would get done quicker.

As there are so many fines now for taxpayers doing things late now, lots of sticks and no carrots, perhaps it is time for fines to be introduced for HMRC to pay if they don’t do their small part of the process effectively and on time?

If the boot was on the other foot maybe HMRC would become more efficient?

Numberous clients are getting “Distraint” and threatening letters saying assets will be taken in settlement of tax debts or CCJ Court Order issued against clients. Many companies getting these letters HAVE NO ASSETS which an organised HMRC would know this from the accounts balance sheets in their possession!

What is really shocking is that often these letters are a total waste of time and resources as the tax has ALREADY been paid!

Why it is like this?

For starters there are clearly far to many staff in Debt Collection at HMRC and HMRC managers and planners are clearly out of touch with reality and don’t know what’s going on in their own sections. It is a disgrace frankly and a total waste of money.

Many of the clients I have had who have had one of these letters have already paid the tax or almost cleared anything owned and making regular payments which HMRC can clearly see. 

Some clients were actually due tax REFUNDS but HMRC didn’t even know as they system is in total chaos and a complete shambles.

The year started with millions of incorrect PAYE coding notices issued earlier this year (ANOTHER total waste of time and money)  and things seem to just be getting worse by the day at HMRC.

The problem with tax collection is the appauling outdated system used to collect tax debts.

First a national office such as Cumbernauld or Shipley issues an instruction to local regions.

A few weeks later (or more) in most cases the local regions start to act by issuing letters.

Sometime later Collectors working from home deliver the very threatening letters BY HAND (wages, mileage allowances and other costs all still mounting up at HMRC for this crazy process).

In the meantime as it has taken HMRC so long to act (AND ONE HAND DOES NOT KNOW THAT THE OTHER IS DOING) the tax has often been PAID so HMRC are running around like headless chickens trying to collect a “debt” that has already been paid.

So…. I recon if the system was sorted out only around 75% of the current number of local collectors would be needed.

When local collectors DO complain up the management tiers each tier is trying to protect their jobs and do nothing to make the system more efficient.

Sending a very treatening letter to someone who has a history of paying their tax on time and either is paying it off as quickly as possible or has ALREADY PAID it does nothing for the goodwill of that taxpayer in future.

Plus a CCJ might send the company under particularly in the present climate then HMRC will collect NOTHING and actually if that taxpayer could speak to someone sensible they often could come up with a managable plan to sort the backlog out.  Again as total waste of time and money with someone then sitting on the dole claiming benefits. GREAT RESULT….

The root of the problem is that HMRC managers think everything can be sorted out with a steal toe capped boot.

A bullying (and self interested) culture is rife at HMRC.

HMRC need to sort this complete mess out! 

The answer is quite SIMPLE really!

Give local collectors immediate access to the UP TO DATE position after all it’s on computer records, BEFORE they print of these stupid standard letters (MORE COST)  which are totally out of date and a complete waste of time.

At present local collectors have to call in to check the current position and often can’t get thought (like the rest of us) so don’t bother. When they do get through that’s two lots of wages being wasted and STILL nothing is owed to HMRC.

It really is crazy.

The local collectors could then concentrate of the larger debts quicker and the ones where no payments to clear are obviously already being made voluntarily anyway.

IF HMRC acted quicker thye might well be able to get persistent non payers to start to coughing up too before the problem becomes to big or is that a bit too obvious for HMRC?

Frankly the whole system needs an overhaul and possibly heads need to roll at the top for allowing it to get so bad in the first place!

HMRC just needs much better management!

The cynical might say HMRC like it being a mess as it keeps more of them in jobs sorting through the mess…..

I have first hand experience of this and a lot of cases where this has been going on this year, no doubt like almost every accountancy firm or tax advisory firm in the UK.

HM Revenue & Customs had the gaul to deny it.  Shocking really but then they were unlikely to admit it were they!

When you call and chase the refund, even if you call and chase the refund a number of times, you get the standard answer “it is in for random security checks“.

Yeah right!

A fair tax system works. An unfair one does not work.

You cannot expect people to pay their taxes on time when HMRC are reluctant to issue refunds when they are due.

The question is will this Government be any better than the last lost of idiots at sorting the tax system out to make it fair and workable?

Ummm we will have to wait and see.

Mr Cameron and George Osbourne.  Please remember when punishing the UK population as a whole that it is largely such poor Government and Government spending choices over the last ten years that leave us with record levels of debt.  If you want the support of the masses in clearing the debt it has to be done is a fair way for those who will be clearing the debt, i.e. tax payers.

The Taxation News website aims to be a central location for the latest tax news and annoucements from tax authorities around the world and commentary from tax advisors in the related countries. It’s well worth a visit to the site regularly to see what’s the latest tax news being announced around the world. The site is divided sections for each of the countries for ease of access to each countries news.

Sections added so far are:

• www.taxationnews.com/uk
• www.taxationnews.com/canada
• www.taxationnews.com/australia  

John Cotter, Managing Director of Tax Publications Limited commented “We are extremely pleased with the progress in our first month of launch and will be adding tax news from other countries around the world over the cming weeks and months“.

“We would love to hear from tax advisors in the UK, Canada and Australia interested in submitting news and commentary to www.TaxationNews.com or the Journal site on www.TaxationJournal.com. It’s a great way to promote your tax business or accountancy practice online”.

One of the aims of the Association is to help members promote themselves online. This is becoming increasing important and the association includes some dynamic and interesting ways for members to promote themselves.

Assocation of Tax Advisors - Members Site

The Asociations members site in on www.assocationoftaxadvisors.org the information site is on www.associationoftaxadvisors.com.

It is free to register with the association and the aim is to build the largest international network of tax advisors in the world.

The founder John Cotter who is Managing Director of Tax Publications Limited a UK based company and has been a UK tax advisor for over 20 years. Combining web skills with tax skills is an interesting mix.

However John would like to help other tax advisors promote themselves using the skills he has learned over a number of years.

Member will be able to issue taxc news and commentary on a number of dedicated tax sites as well as feature if they wish in a global tax directory.

Two of the sites associated with the Association as www.TaxationJournal.com and www.TaxationNews.com with others in various stages of development.

It is  a great opportunity for tax advisors around the world to link up and benefit from membership of an assocation which aims to promote it’s members.

Here is one of the informal style brief introduction released by John

You can follow the Asocation at:

www.Twitter.com/TaxAssociation or www.Twitter.com/TaxationJournal

Or via www.Facebook.com/TaxationJournal  

“HMRC Online Forms (updated 19 March 2010)

Some customers using HMRC online forms are experiencing problems, typically pages not loading and / or being timed out. Our technical partners are investigating this problem as a matter or urgency. The problem is intermittent and we suggest you log off and try again.

If you are trying to send a nil return please note you can call the CIS Helpline on 0845 366 7899 and they will accept your return over the phone.

We will update this message as soon as we have more information. In the meantime we apologise for any inconvenience.”

After spending a large proportion of yesterday and today trying to file CIS300 monthly returns for two clients I eventually had no choice but to make a formal complaint to HMRC earlier today.

I also asked the CIS Helpline what the postion was on penaties if the return when in late as it was looking like I would simply be unable to file the returns online and the answer after checking with her supervisor was:

“Penalty notices will be issued in the normal way but you will have the right of appeal“.

I said polity (I really did not feel like being polite but as she was just trying to do her job and it is management at HMRC that are at fault not individual staff afterall):

“So even though I have tried to file these returns on time and actually spent most of yesterday and today trying  to do just that, and even though there are “known issues” whihc HMRC acknowledge on there website, I will have to go through the extra time try to explain to my client’s why they have a penalty and also more time then appealing against it. Do that seem fair or reasonable?”

The lady polity replied:

“I am sorry for your inconvenience and remaining so patient, but you will have to follow the usual appeal proceedures“.

I also asked if returns could be filed over the phone as they were saying “Nil Returns” could be filed over the phone after all (fat lot of use that is in real terms!).  Not unsuprisingly the answer was no as that would be way to helpful and supportive on the part of HMRC. Madness given the problems with HMRC’s website.

How on earth are HMRC’s computers going to cope with the increased monthly online submissions and payments from next month when the new PAYE compliance penalty rules take effect? It is very worrying as I personally doubt they are going to cope well at all.

Government seems very keen to increase compliance penalties and burdens on taxpayers and their agents but unable to run working websites to enable the compliance to be done or a timely and smooth running basis.

I was genuinely shocked, frustrated, angry and appauled over the last two days at HMRC’s website performance and also at the crass, dissmissive attitude of senior staff at HMRC.

Why on earth didn’t HMRC make a formal statement about the problem and the penalties as they had known issues?

I kept trying all day today costing me time and lost income as clients are not interested in hearing it is HMRC’s fault and eventually at around 6.30pm got both returns submitted after LOTS of failed attempts in various stages of submission. For both returns the green whirly sign or green progess bars for ewach and every step of submission whirled away for anything between two and 15 minutes so what should have taken around 5 minutes for each return ended up taking around 6 hours in total yeaterday and today ! Is that commercial sence?

Thank goodness I don’t have that many more CIS returns to submitted each month it was be a total nightmre!

Around 1 hour and 45 minutes of trying to keep an eye on the crazily slow green progress bar before HMRC’s website finally crashed.

£100 fine for late submission and only two weeks in the month in which to get all client’s CIS returns in on time.

I am doing my bit to keep my client’s up to date so my question to HMRC is  “why are HMRC not doing their bit to make this crazy tax system much fairer and reasonable to us for the taxpayers and their accountants”.

If I added up all the wasted time now sitting listening to stupid messages when you phone them, plus all the wasted time with problems with HMRC’s website we could probably do a lot of good for the world if it was avoided and certainly make a better profit (the pay more tax as a consequence!).

So what’s the standard reply from HMRC “TRY LATER” but they don’t actually know when you should try later and they are trying to fix the problem. Do they sereiously think we all have nothing beter to to do and businesses to try and run efficiently. Perhaps HMRC will pay us £100 compensation for all the wasted time and hastle? Yeh right…

It is about time HMRC scrapped the £100 monthly fine system as frankly their website and telephone services are not up to the job at present!

We can’t even go back to pen and quill as HMRC are now in the process of making online filing compulsory for many tax issue (and they ignore you letters if you write to them anyway!)

The problem with online filing is only set to get worse and worse with more and more returns being filed online.

Personally I am a fan on online filing in principle, saves paper, postage and other costs but at present these are out weighed by the increasing cost of filing on line due to problems with HMRC’s website.

Come on HMRC get your act together or lighten up on the penalty threats…

I would like to find something postive to say about HMRC at present. After all they have an important job to do. Problem is I just can’t think of a single thing to praise them for at present… and it is getting worse by the month.

Right now if we had a political party that said they would sort HMRC out and make the system much fairer on ordinary taxpayers just trying to comply I would vote for them.  I feel that fed up with dealing with HMRC on days I have to actually contact them in any way. On strike last week or so they were want sympathy? Ummmm

For the tax year 2010-11 onwards HMRC have increased the already heavy burden on employers and businesses dramatically with new new late payment penalties for PAYE payments, including income tax/NICs and construction industry scheme and student loan deductions.

This means that from May 2010 you will most likely have to pay a late payment penalty if you do not pay the PAYE due each month or quarter, ON  TIME on time and IN FULL.  Late is even one day late!

There will also be late payment penalties for not paying amounts due annually – including Class 1A NICs (on benefits in kind such as Company Cars, Medicial Insurance etc) and PSA (PAYE Settlement Arrangements) amounts – on time and in full.

The new late payment penalties will apply to all employers, not just the large ones. They will replace the Mandatory Electronic Payment surcharge, which currently applies only to large employers.

These ruiles apply to ALL employers and CIS Contractors, even if you have one employee including small schemes such as those for nanny’s or those who receive direct payments to fund a carer etc).

When employers have asked for and agreed with HMRC a “time to pay” HMRC state “The suspension of penalties during a time to pay arrangement will be set out in legislation”.

What about eartlier years?

If you owe PAYE payments due for tax years earlier than 2010-11 the new rules will not apply. The existing rules will still apply to any payments that you should have made before 20 or 23 April 2010 (or before July 2011 for Class 1A NICs).

Under the existing rules you may have to pay a surcharge on those payments, if you are a large employer covered by the Mandatory Electronic Payment rules.

What are the deadlines for PAYE/Tax and NIC payments due?

PAYE/Class 1 NICs ELECTORNIC payment deadline

Your cleared payment must reach HMRC’s bank account no later than the 22nd of the month following the end of the month or quarter to which it relates. Employers, who pay their quarterly payments electronically, have until:

• 22 July to pay their quarter ended 5 July
• 22 October to pay their quarter ended 5 October
• 22 January to pay their quarter ended 5 January
• 22 April to pay their quarter ended 5 April

Where the 22nd falls on a weekend or bank holiday, you must ensure that your payment arrives no later than the last bank working day before the 22nd. Bank working days are Monday to Friday excluding bank holidays. Interest is charged on any amounts owed at the end of the year.

If HMRC has notified you in the previous autumn that you are a large employer (250 or more employees) you must pay electronically.

PAYE/Class 1 NICs POSTAL payment deadlines

If you are not required to pay electronically please ensure your cheque reaches HMRC no later than the 19th of the month following the end of the month or quarter to which it relates. Employers, who pay their quarterly payments by post, have until:

• 19 July to pay their quarter ended 5 July
• 19 October to pay their quarter ended 5 October
• 19 January to pay their quarter ended 5 January
• 19 April to pay their quarter ended 5 April

Where the 19th falls on a weekend or bank holiday, you must ensure that your payment arrives no later than the last bank working day before the 19th. Bank working days are Monday to Friday excluding bank holidays. Interest is charged on any amounts owed at the end of the year.

Deadlines at the end of the tax year

Your forms P11D, P9D and P11D(b) must reach HMRC by 6 July following the end of the tax year.

Your payment of the Class 1A NICs declared on form P11D(b) must then reach HMRC by 22 July, or by 19 July if you pay by cheque.

How much are the new PAYE/CIS penalties?

Unless you are over six months late with the IN YEAR payment, the amount of the penalty will depend on two things: how much is late and how many times payments are late in a tax year.

The table below shows how the penalties will be calculated:

* if one payment is late and it is late by more than six months you will still be liable to a penalty.

Class 1A and 1B NICs

• You are likely to have to pay a penalty of 5 per cent of the amount that is late if you have not paid the full amount within 30 days of the day it is due.
• You may have to pay a further penalty of 5 per cent of any amount that is late if you still have not paid 6 months after the due date, and a further penalty of 5 per cent if you still have not paid 12 months after the due date.

What if your business is in temporary difficulty and I need more time to find the money – what should you do?

HMRC state they expect employers to pay on time. If you are having difficulties you should ring HMRC’s Business Payment “Support” Service on Tel 0845 302 1435 as soon as possible and before the payment deadline falls due. In certain circumstances HMRC may allow some extra time to pay.

Why do we have the new rules?

 In short tax receipts have fallen and Government has spent years spending more than it raises in taxes. Basically the Governement is bankrupt and now need to find a way of paying of the overspend.

Cutting the now huge number of Civil Servants is only a very small part of the plan and there is NO talk of scrapping the totally unaffordable final salary pension arrangements for Civil Servants at present so basically Government is now finding new ways to squeeze more money out of ordinary hard working taxpayers. Penalties, especially penalties so draconian that it is quite likely that many employers will have to pay them is a way for Government to squeeze you a bit drier.

What are these penalties so harsh? A PAYE month ends 5 April so you have around two weeks to caculate the tax and ensure it is paid. If you have to do all this yourself while also running the business they you need to make this a priority now which will no doubt have an affect on other important things you have to do to keep your business running smoothly.

Staff holidays (no excuse)… If you staff that run the payroll are on holiday in the middle of the month? Your stuffed and need to make EXTRA arrangements to ensure this is sorted.

Accountants and Payroll agencies will likewise have to be on top of reminding clients and making sure they understand the deadlines. For smaller practices with fewer staff they might even have to consider whether running payroll for clients is worth the substantially increased risks. Engagement letters need to make clear clients are to be responsible for paying their tax on time and the agent won’t be responsible for penalties or interest.

Basically this is a very easy new set of rules for HMRC to enforce and a very difficult one for accountants and clients to stay totally out of trouble on over a period of time. There is no room for error or mistake or forgetfulness.

It would be really fun to have the boot on the other foot and have the power to reverse these rules on your local MP and local tax office, such a fine them if they have not delat with your telephone call (i.e. answer it) in less than 30 minutes or they fail to reply to a letter within 30 days, or they fail to issue your refund to you in less than two weeks.

But then who ever said life was fair?

This is HMRC rather tongue in cheek statement about why they have introduced the penalties…

“When people don’t pay in full and on time, they can gain a significant advantage over those who do. We expect that the penalties will encourage some of those who currently pay late to pay on time. And by charging penalties when people are late, we will help make sure that the people who do pay on time are not at a financial disadvantage.”

If this was true they would not nbe charging penalties at all to anyone that has a history of paying their tax and the deadlines and rules would not be quite so aggressive. Biggest load of **** I have ever heard frankly. Do HMRC really think we are that stupid to be fooled by such a stupid statement?. Why mince my words… HMRC certainly won’t when they send you a P101 penalty statement….

To add to the confusion… 

HMRC bank account details changed on 6 April 2009. Since the new accounts were introduced HMRC has continued to accept payments made using the old HMRC account details.

You must now use the new HMRC bank account details, shown in this guide to make electronic payments by BACS Direct Credit, Internet/telephone banking or CHAPS.

During 2010 HMRC’s old bank accounts will be closed and any payments made using these old accounts may be returned.

All this an frankly HMRC’s online PAYE system does not really make it easy to file the yellow book “payslip” online to even to file Nil payslips it is all spread out all over their website in a total mess which is why the cynical might think the penalties are being introduced BEFORE sort their own website out to make this a bit easier for employers each month.

And to top it all off…

HMRC have recently issued MILLIONS of incorrect CODING NOTICES usually meaning TOO MUCH tax will be deducted at source! It is a total disgrace that HMRC introduce new very harsh penalties on businesses for small mistakes and delays when HMRC can’t even get it right themselves. Pot and kettle come to mind… The whole coding notice system is flawed and a total mess…