Employment Tax Expert

Answers on a post card to this one …

Very quietly, this one seems to have snuck through and it’s hardly surprising!

Lesley Strahtie (CEO of HMRC) has been made Dame Commander of the Order of the Bath, in the Queen’s birthday honours list.

Given that HMRC is bottom of the league of civil service departments, as judged by its own staff, and given that the taxpayers (“customers” as Ms Strathie prefers to call them) aren’t impressed either, why has she been made a Dame – a reward for failure or just preparing her for the Christmas season, as there is no other logical explanation

HMRC have screwed up again big time by sending 50,000 taxpayers personal and obviously confidential information to other taxpayers – but once again teflon HMRC aren’t to blame – perish the thought, it’s the fault of a print supplier.

People who have been affected have received a letter signed by Paul Gerrard, director of tax credits, saying “I wish to apologise for this error and any inconvenience that it might cause. I would be very grateful if you could return the incorrect notice in the envelope provided.”

HMRC said they were alerted to the problem last weekend.

“HMRC takes data security extremely seriously,” they said in a statement.

“Unfortunately an error has occurred in one of the tax credits print runs causing some customer information to be wrongly formatted.

“Investigations are underway to identify the cause of the problem and we will be contacting affected customers in writing this week, apologising and providing a corrected award notice.”

Interestingly, they have stated that ID theft could not result from the error (well that’s a relief) or is that altogether true. One taxpayer received details of someone elses work, childcare and pay details
This employment tax expert says it is happening too often and HMRC refuse to accept the blame, taxpayers personal details should remain confidential otherwise how can we trust these people!

So in an effort to simplify the tax position of self employed individuals, the Coalition has announced that they are to review IR35, which in theory is good news. Far too much time and money has been taken up with HMRC pursuing employment status reviews that have led absolutely no where. The latest case being that of Novasoft – it only took a mere 8 years to resolve and guess how it started – readers of this blog will as this employment tax expert has warned about it since it began – that helpful little offer by HMRC to review self employed contracts free of charge. All those people who think they can get something for nothing take heed – this whole case stemmed from an unsuspecting person naively thinking that this was the route to go because of course HMRC are completely impartial aren’t they?
Well a mega lesson has been learnt here – the individual may have finally won but it cost him £’000′s and 8 years of his life – a high price to pay, so where do we go from here – well just be very careful reviews are planned, timescale not mentioned and even worse HMRC are carrying on blindly opening tax investigations into new IR35 cases so if you are concerned about your employment status contact the experts because you don’t want to be the next statistic

An investigation of what you may ask yourself but it’s all very circular as you will see and unfortunately it comes back to the fact that more companies will be subject to employer compliance visits, tax investigations to raise funds to feed our national debt.

But am I the only person who wonders who exactly we are in debt too – as we’re in trouble, Greece is up the creek without a paddle (except for the Euro zone bailout and who has funded this), and then we see that Portugal and Spain are heading in the same direction – so if someone could enlighten me as to who precisely is the ultimate loan shark in all of this I would be very interested.

So to feed the national debt we are being told to prepare for tax rises and spending cuts and this is where HMRC play their part, so be warned every last penny will be squeezed out of the unprepared or ill prepared company and individual – butchers, bakers and candle stick makers or should that be health professionals, lawyers and gas fitters

HMRC have gradually been introducing various penalty changes and “in year” late payment penalties are something new for this tax year but there has been very little publicity about this latest addition to the employer compliance review/tax investigation/Construction Industry Scheme review regime.

So what does this actually mean from both a PAYE/NIC compliance and CIS compliance perspective – well, it means there are no opportunities to hold onto monthly PAYE and CIS payments to HMRC to aide cashflow and then catch up at the year end. Now paying late will register a default and these defaults will be tracked throughout the year and then only after the end of the tax year will penalty notices be issued – because let’s face it this is when HMRC can obtain the highest yield from you. It has already been confirmed that they won’t issue the notices “in year” so don’t think that you have got away with it because it will be stored up for the end of the tax year and then bang, the penalty notices will arrive.

Statistically HMRC will be looking for unusual remittance patterns so don’t go down the misguided route of thinking “how will they find out?” because you’ll be walking into the next stage of the the new compliance regime that of “real time record reviews”. Keep reading for further updates on this very important development …