MONEY LOST
According to HM Revenue & Customs,
about £10bn is being lost by the government each
year to tax avoidance schemes. This figure is
equal to almost 3p on the basic rate of income
tax.
In a bid to tackle the issue, the HMRC has set up
a special unit that will investigate such schemes
but those accused of tax avoidance say they are
doing nothing illegal and argue they are merely
better at using the tax system than the HMRC is.
In 2004 HMRC was granted new tax avoidance powers
by Chancellor Gordon Brown. The new powers mean
that accountancy firms have to report new tax
avoidance schemes to HMRC before recommending
them to clients. The Association of Certified
Chartered Accountants (ACCA) believes HMRC is
drawing the curtain on many tax avoidance
schemes. (Source: BBC News, Mar/06) |
NO
LET-OFF
About two-thirds of families who have asked for
tax credit overpayments to be written off because
of administrative error have had their cases
dismissed.
The main reason given for cases being dismissed
is that claimants should have spotted HM Revenue
& Customs errors.
Hundreds of thousands of families are now facing
having to repay large sums, often thousands of
pounds, in tax credits despite their pleas of
innocence. (Source: BBC News, Aug/06) |
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INLAND REVENUE
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)
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