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erranta

Taxman Wrongly Fines 10,000 Uk Businesses!

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Has the taxman 'pulled the wool' over YOUR eyes??

HM Revenue & Customs (HMRC) is once again in the firing line after leaked documents revealed a computer error led to 10,000 UK companies being fined incorrectly.

The fines of up to £400 were dished out during 2004/05 and concerned the completion of tax forms.

But documents leaked to Computer Weekly revealed that a "basic flaw in the design of automatic systems" led to the wrongful issue of penalty notices.

The HMRC documents said: "We would like to apologise to employers and affected agents for the inconvenience undoubtedly caused by an error in our systems. We recently discovered that approximately 10,000 employers received penalty notices for 2004-05 although no penalty is due. This came to light because of the welcome increase in online filing."

Insiders are concerned this is yet further evidence that HMRC is unable to keep up with the scale and complexity of the UK's tax system.

http://www.theregister.co.uk/2006/01/17/hmrc_fine/

Edited by erranta

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"Insiders are concerned this is yet further evidence that HMRC is unable to keep up with the scale and complexity of the UK's tax system."

Lets just highlight that again, the system is now so complex that neither HMRC nor most professional advisors can really cope with it.

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"Insiders are concerned this is yet further evidence that HMRC is unable to keep up with the scale and complexity of the UK's tax system."

Lets just highlight that again, the system is now so complex that neither HMRC nor most professional advisors can really cope with it.

And next years will be more complex. Just hope that the tories will offer to give us back a fairer tax system, even if it means the basic rate has to rise, along with the tax free allowance B)

Edited by erd

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And next years will be more complex. Just hope that the tories will offer to give us back a fairer tax system, even if it means the basic rate has to rise, along with the tax free allowance B)

This give and take tax business put in place to confuse people. so no body will know what their entitlement are, so they can hire more 'civil sevants' to 'sort' it out

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"Insiders are concerned this is yet further evidence that HMRC is unable to keep up with the scale and complexity of the UK's tax system."

Lets just highlight that again, the system is now so complex that neither HMRC nor most professional advisors can really cope with it.

Yes and John Prescott, who is in charge of Council Tax, doesn't seem to understand the rules of that either.

What we need is more civil servants to sort it all out!

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Yes and John Prescott, who is in charge of Council Tax, doesn't seem to understand the rules of that either.

What we need is more civil servants to sort it all out!

I'm sure JP understands the rules perfectly, he just doesn't give a fxxx.

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I have said it before and will say it again - Brown is from the 1960s and 70s where social workers, teachers and poly lecturers are the only 'real' professions. IMPO in his mind anyone who is self-employed is nothing more than some kind of Arthur Daley spiv trying to fleece the system!

The hassle that SMEs get in the UK these days from Brown's tax regime seems designed to deliberately put as many people out of business as is possible IMPO.

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I have said it before and will say it again - Brown is from the 1960s and 70s where social workers, teachers and poly lecturers are the only 'real' professions. IMPO in his mind anyone who is self-employed is nothing more than some kind of Arthur Daley spiv trying to fleece the system!

The hassle that SMEs get in the UK these days from Brown's tax regime seems designed to deliberately put as many people out of business as is possible IMPO.

Agreed, much as brown likes to pretend he is new labour, he is really an unreconstructed socialist who believes that the answer to all of societies problems is more rules and more government. He appears to despise the (english) middle classes and values only manual workers and government employees.

It is not just SMEs & the self employed (although they are hit hardest) who suffer, the additional complexity flows through the whole the whole system as layer upon layer of complexity and regulation is added each year.

Probably the most obvious and scandellous example is the tax credits system, which is hard for professional advisors to follow, let alone the low paid who are supposed to benefit from it. The result has been to bring great hardship to the lowest paid as they are first told by unaccountable bureaucrats that they are entitled to money then are told that they must pay it back.

Much as I dislike Bliar I fear the consequences of PM Brown being freed from his shackles. Worst of all, Cameron's strategy seems to be to ape labour so that there is no longer an alternative.

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I visit a website called Accounting Web and whenever Brown brings out some new tax regime for weeks, often months, afterwards there is endless discussion on there on what each particular regime.

In other words, the accountants themselves do not understand most of his stuff - deliberately intended so IMPO - so how on earth can Joe Public!?

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I visit a website called Accounting Web and whenever Brown brings out some new tax regime for weeks, often months, afterwards there is endless discussion on there on what each particular regime.

In other words, the accountants themselves do not understand most of his stuff - deliberately intended so IMPO - so how on earth can Joe Public!?

Yep, I visit the same site.

Usually the problem is that new regulations are not properly thought out and are then rushed through without any real parlimentary scruitiny resulting in non-sensical legislation. As an example the 2005 finance act was passed in the run up to the election in about 5 hours.

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I have said it before and will say it again - Brown is from the 1960s and 70s where social workers, teachers and poly lecturers are the only 'real' professions. IMPO in his mind anyone who is self-employed is nothing more than some kind of Arthur Daley spiv trying to fleece the system!

The hassle that SMEs get in the UK these days from Brown's tax regime seems designed to deliberately put as many people out of business as is possible IMPO.

I totally agree!

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Even more reason to go for something everyone can understand such as a "flat tax" which is not a million miles from tithing which is the one of the oldest tax system.

Flat tax is the best way of handling income tax. I would still want taxes elsewhere alongside them, like VAT, at say 10%. Petrol, beer and tobacco taxes are fine with me as well, they just need to be bought down a lot!

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Totally agree - or, possibly even worse, they consult on something, & totally ignore what the professionals say - like over the 0% rate for companies with 'small' profits. Then they bring in hugely complex anti-avoidance provisions, then they scrap it.

Or, indeed like residential property and fine wines going into SIPPS - except that, thank God, they did scrap it before it hit the statute books.

What a waste of our taxes!

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Totally agree - or, possibly even worse, they consult on something, & totally ignore what the professionals say - like over the 0% rate for companies with 'small' profits. Then they bring in hugely complex anti-avoidance provisions, then they scrap it.

Or, indeed like residential property and fine wines going into SIPPS - except that, thank God, they did scrap it before it hit the statute books.

What a waste of our taxes!

Actually this is a good point. Its not just the complexity but the rate of change. First residential doesn't go into sipps, then it does, then it doesn't again. Small companies rate: 10% then 0% then non-corporate distributions then up to 19%. First year allowances 40% to 100% to 50% to 40% to 50% again.

Ever more tinkering in the name of helping business, but which ends up moving away from the one thing businesses really want - simplicity and certainty

Edited by Young Goat

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My company received such a" fine" , I got straight on to our Tax office who seemed a bit vague as usual, about a week later it was rescinded.

Does anyone here have a lot ot do with the Inland Revenue? It seems to be full of incompetent people . In the last couple of years they have changed the phone no to a 0845 no, now you are in a queue before speaking to someone who always seems clueless. Is it just a plan to piss everyone off?

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I have said it before and will say it again - Brown is from the 1960s and 70s where social workers, teachers and poly lecturers are the only 'real' professions. IMPO in his mind anyone who is self-employed is nothing more than some kind of Arthur Daley spiv trying to fleece the system!

The hassle that SMEs get in the UK these days from Brown's tax regime seems designed to deliberately put as many people out of business as is possible IMPO.

Agreed!!!!

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"Does anyone here have a lot ot do with the Inland Revenue? It seems to be full of incompetent people . In the last couple of years they have changed the phone no to a 0845 no, now you are in a queue before speaking to someone who always seems clueless. Is it just a plan to piss everyone off?" Chirpy99

You've hit on a point here that is well know within the accountancy profession but not the wider public.

Until a couple of years ago your enquiry would have been handled by a local tax office where you would have been connected to a knowledgable person who would have access to your file and would usually be able to answer your query or resolve your problem, by phoning you back if necessary.

In the last couple of years, in the name of efficiency, the Inland Revenue have closed most of the local offices and centralised most of the work in larger district offices. If you can get through to one of these you can usually get through to somebody sensible but it is becoming harder.

The big problem is that most telephone enquiries are now routed to national call centres, which to be honest (like all call centres IMO) are a disgrace. The staff have very little training and very limited access to information or power to do anything. They can answer queries if they can be called up on their computer screens but they do not understand the tax system and consequently the advice they do dispense can not be relied upon. I also suspect that they will say whatever is needed to get the caller to go away.

The situation is best summed up by a quote from accounting web. "As professional advisors we would be very wary of allowing staff with only a couple of years training and experience handle client's enquiries. The Inland Revenue appear to think it is acceptable to have staff facing the public after a couple of days training."

This is all part of a wider pattern of moving away from high quality professional staff to much more limited data processors, where much of the work is handled by staff who don't really understand what they are doing.

As a final point the Inland Revenue has been struggling with the reorganisation for a couple of years. They have recently been merged with H M Customs & Excise to generate the new superbody H M Revenue & Customs. Does anybody think this will improve matters? :angry:

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The inland revenue are the most inept people I have ever spoke to (apart from suppliers).

I had a problem with my student loan, in that all of last years repayments went missing. The inland revenue said it's nothing to do with them - ask your employer! I did, I have a P60 with the correct details on, wage slips etc etc proof that the money was sent to them etc etc... but no, they can't do anything!

As it turns out, they have something like £100 tax paid on my behalf. Another f*** up by them! Another year of writing letters again....

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