With severe Public Spending cuts coming in and set to get worse HMRC really really need to get their act together or face sever job cuts.

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The problem with tax collection is the appauling outdated system used to collect tax debts.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