INLAND REVENUE

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A genuine reply from Customer Relations at the Inland Revenue to yet another angry customer!

Dear Mr Addison,

I am writing to you to express our thanks for your more than prompt reply to our latest communication, and also to answer some of the points you raise. I will address them, as ever, in order.

Firstly, I must take issue with your description of our last as a "begging letter". It might perhaps more properly be referred to as a "tax demand". This is how we, at the Inland Revenue have always, for reasons of accuracy, traditionally referred to such documents.

Secondly, your frustration at our adding to the "endless stream of crapulent whining and panhandling vomited daily through the letterbox on to the doormat" has been noted. However, whilst I have naturally not seen the other letters to which you refer I would cautiously suggest that their being from "pauper councils, Lombardy pirate banking houses and pissant gas-mongerers" might indicate that your decision to "file them next to the toilet in case of emergencies" is at best a little ill-advised. In common with my own organisation, it is unlikely that the senders of these letters do see you as a "fuckwit bumpkin or, come to that, a "sodding charity". More likely they see you as a citizen of Great Britain, with a responsibility to contribute to the upkeep of the nation as a whole.

Which, brings me to my next point. Whilst there may be some spirit of truth in your assertion that the taxes you pay "go to shore up the canker-blighted, toppling folly that is the Public Services", a moment's rudimentary calculation ought to disabuse you of the notion that the government in any way expects you to "stump up for the whole damned party" yourself. The estimates you provide for the Chancellor's disbursement of the funds levied by taxation, whilst colourful, are, in fairness, a little off the mark. Less than you seem to imagine is spent on "junkets for Bunterish lickspittles" and "dancing whores" whilst far more than you have accounted for is allocated to, for example, "that box-ticking facade of a university system."

A couple of technical points arising from direct queries:

1) The reason we don't simply write "Muggins" on the envelope has to do with the vagaries of the postal system.

2) You can rest assured that "sucking the very marrows of those with nothing else to give" has never been considered as a practice because even if the Personal Allowance didn't render it irrelevant, the sheer medical logistics involved would make it financially unviable.

I trust this has helped. In the meantime, whilst I would not in any way wish to influence your decision one way or the other, I ought to point out that even if you did choose to "give the whole foul jamboree up and go and live in India" you would still owe us the money.

Please forward it by Friday.

Yours Sincerely,

H J Lee
Customer Relations

Almost a million taxpayer records were accidently deleted from Inland Revenue computer systems between 1997 and 2000 due to a software problem which went unnoticed for several years. The Department took three years to discover that software used to cleanse its database of old cases was also wiping live ones from its system. This resulted in some 364,000 people who cannot be identified being owed £82m, while another 22,000 did not pay tax due of around £6m. The Revenue admitted the problem in 2004. A routine housekeeping procedure on the PAYE database, which had been in place for at least 10 years, failed to distinguish between old and live cases.

The error was revealed when a new management information system was brought in to monitor the software. The Revenue has since introduced a backup system. The MPs used the incident to reinforce their concerns about the Department's ability to manage the IT underpinning the tax system. Their attention focused on the serious IT problems which contributed to the troubled launch of the tax credits scheme in 2003, described by Committee Chair Edward Leigh as a "nightmare", and left many vulnerable people in financial difficulty. Mr Leigh said, "There is a general lesson here: that an ambitious scheme might be fatally undermined by its intrinsic complexity."

During the course of the Committee's inquiry, the Department, now known as HM Revenue & Customs, it had learned the lessons from its previous IT problems. It is said to be in the midst of a dispute with EDS, the tax credit system IT provider, over compensation "for unsatisfactory system performance". The case has gone to independent arbitration but, EDS has not accepted the findings, leaving the Department to "consider its legal options". The contract with its new IT provider, Capgemini, has imposed a more severe penalty regime for underperformance. The PAC noted that "such clauses inevitability affected the 'price' of the contract." (Source: The Register)

Taxpayers have been warned that they could end up paying too much tax later this year after HM Revenue & Customs introduced a new computer system. The Chartered Institute of Taxation said wrong information may have been sent out to "huge numbers of people" and warned that unless it was corrected, it could cost them hundreds of pounds. The group said many people with complex tax affairs, workers with more than one job, or separate sources of income, had been sent out so-called "coding notices", many of which could be wrong.

It said if the error was not corrected by the time the new codes come into force in April, wrong information could be sent to employers and pension companies, leading to them deducting too much tax through the PAYE scheme. In the worst case, the group said people could pay £108 a month, or £1,295 a year, too much. Twice as many coding notices have been sent out this year than in previous years after HM Revenue & Customs introduced a new computer system to simplify tax collecting. Up to 25 million codes were sent out this year, compared with 12 million last year.

An HMRC spokesman said that "with the best will in the world, there might be some incorrect codes" but added that taxpayers had two months to check their codes and inform the tax office if there was an error. However, Andrew Hubbard, president of the Chartered Institute of Taxation, said, "Most people on PAYE are used to assuming that what the taxman sends them is correct. Many file away coding notices without even bothering to check them. But this year, many of them are being given wrong information and unless they spot it and tell HMRC, their employer will receive the wrong information too."

Coding notices are sent to many people in the PAYE system each year between the beginning of January and the first week of March. This year's problem has arisen as the result of the introduction of a new system, which combines information on people's National Insurance contributions and PAYE for the first time. In some cases, the system appears not to have information on people leaving jobs, meaning those who have changed jobs during the past few years are often being treated as if they have two jobs, and much higher earnings than they do.

This could lead, in the worst case scenario, to taxpayers losing out on £108 in their April pay packet, equating to to an annual loss of £1,295. A spokesman for HMRC said, "The new system is working as it should. It creates a single record for customers for the first time, and this, together with increased automation compared to previous years, is resulting in many more people having more accurate codes than before. As part of our transition to this new system, in this first year, as the system we also expect some the codes we issue to be incorrect." (Source: Daily Telegraph, Jan/10)

Tax inspectors are to be given new powers allowing them to tap taxpayers’ telephones and plant bugs inside their homes and offices. HM Revenue & Customs (HMRC) says its inspectors need such covert surveillance to tackle the growing threat from organised and white-collar crime. However, lawyers and accountants argue that the move could breach human rights and have condemned ministers for “creeping authoritarianism”.

Harry Travers, a solicitor who specialises in defending clients targeted by the Inland Revenue, said the new powers were a possible breach of the European Convention on Human Rights. The treaty says that interfering with private and family life is only permissible if it is “necessary” for the prevention of disorder or crime. A spokesman for HMRC said giving tax inspectors the power to tap phones and plant bugs was a rational move after the merger of Customs and the Inland Revenue in 2005.

The union of the two organisations followed a series of bungled investigations in which Customs and Excise officers were accused in court of lying and corruption. The spokesman said the former Customs and Excise agency had retained its powers to conduct so-called “intrusive surveillance” after the merger and it made sense to extend them to the Inland Revenue part of the new organisation. (Source: Times Online, Jan/07)

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