Vir Cantium

I'm right, you know …

HMRC: 0/10 for timing

So among all the furore over PAYE and those over- and under-payments, HMRC slipped out something else that isn’t entirely unrelated:

Government departments are looking critically at measures to reduce spending and save on costs. HM Revenue & Customs (HMRC) is no exception to this and expects to face significant financial challenges over the coming years.

In anticipation of these challenges HMRC has reviewed the forms it sends to tax agents and advisers [i.e. accountants – NR]. HMRC have decided that some of them will no longer be issued…

OK, so we’re all in it together, I get that. Less paper: good. Less postage: good (though anything that HMRC sends out seems to take weeks between the date on the letters and when we actually get them anyway)….

For example, discontinuing the issue of agents’ copies of PAYE Coding Notices (P2) and P800 Tax Calculations alone will save in the region of £1.25 million.

Oh no it won’t.

Here, you see, it all goes wrong. It will save far less than £1.25m, because there’ll be extra pressure on the call centres as taxpayer’s agents bombard the Revenue with requests for details of what their client’s tax codes are, and what they’re for.

Then there’ll be the extra enquiries and compliance checks following tax returns being sent in without all the relevant information which, previously, agents would have had on their files because HMRC would have copied them in. Some of this extra work we might be able to bill clients for, but not much, and that would of course be a cost to businesses and taxpayers that simply would not have been incurred, either by the taxpayer or the Revenue, without this cut.

Ah, say the Revenue, this problem won’t arise because, where the agents aren’t being copied in, the taxpayer’s copy (sorry “customer/client copy”) will “include a new message suggesting that the form is shown to their tax agent or adviser”, which clients will always read, of course, especially as they’ve never had to worry about forwarding everything to their accountant before, because he gets copied in doesn’t he? In extreme cases, of course, the stroppier customers will probably blame the accountant for not doing his job and go elsewhere. Thanks a lot.

What?  A Tory criticising a cut aimed at reducing the deficit? No, because this isn’t a cut: it’s a genuine poorly thought through false economy.

Where HMRC have fallen down on the timing, though, is that the P800 tax calculations and P2 PAYE coding notices are exactly the sorts of “letters from the taxman” that the mainstream media have been referring to as “falling on doormats” following the recalculation of millions of taxpayers’ liabilities – a process that will probably take a few months and could conceivably go on past the December 2010 date for withdrawing these forms.

So, just as represented taxpayers will need their accountants to be in the loop, HMRC are going to cut them out of it.

Now the obvious way around this would be to put more of this information on-line, so that agents and taxpayers can see that they need to know without the need for dead trees. Yet the changes look like the usual cart-horse situation, and once the they happen, any such development of the HMRC website might just be seen as a cost that will be put on hold, as they look “critically at measures to reduce spending and save on costs”, especially when they have to put more money into, say, the contact centres because of the increased demand. Not that I’m remotely suggesting that HMRC are in any way short-sighted….


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: