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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)
       


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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