Archive for March, 2014

h1

Catching up

March 24, 2014

So I got my tax repayment on Friday, so I don’t have to spend the day on the phone tomorrow following up on my “chase repayment” phone call.  Well, I say I got my repayment – I got the money in my bank account, and the paperwork will (presumably) follow?  All I’ve had so far is a bill for the trivial amount of tax for 2012-13 which they had automatically repaid when I put in my return, which has presumably been paid from the rather larger amount they have repaid from the carry back of losses to 2011-12 which they have now actioned.  But, fair’s fair, if it’s a choice between getting the money and getting the paperwork, I know which one I’d prioritise.

And then there is my complaint…

I made a complaint.  HMRC grudgingly agreed I was correct (or at least that they wouldn’t try to collect the disputed amount) and then tried to collect the disputed amount via my tax code anyway.  So I had to make a second complaint.

Now I have a letter from the same complaint handler as the first time, apologising for the incorrect code and offering me £25 compensation.  Again, I haven’t had either the £25 or the revised coding notice.  But, again, it’s a timing issue and I’m prepared to believe they mean it this time.

But, be careful out there!

 

*edited Monday lunchtime 24 March 2014.  The postman called… and brought me my new tax code.  And it’s right!  Hurrah!  Well done complaints handler!

Posted in About me, HMRC | Leave a Comment »

h1

More competitive, simpler, greener and fairer.

March 20, 2014

After the election, the Tories and the LibDems got together and agreed on a programme of what they would actually do together in government.  On taxes, they agreed their priorities were to make taxes simpler, fairer, greener and more competitive.

So how did yesterday’s Budget move them towards those objectives?

More competitive

Can we just kick this one into touch now please?  According to the back of my envelope, the budget is giving away £920 million next year on measures tagged with “investment and growth” (table 2.1) when, by the World Bank and Bloomberg‘s methodology we’re in the top ten places to do business and well placed in KPMG’s tax competitiveness survey.  So let’s say, yes, we’ve DONE this one, and stop throwing money at it?  Please?

Simpler

Is the Budget going to make taxes any simpler?  Well, pensions and savings maybe – insofar as big chunks of them won’t BE taxed.  But in general?  OOTLAR (the inelegantly named “Overview of Tax, Legislation and Rates” document) has only seven instances of use of the words “simple” or “simpler”:

  • In a reference to the revalorisation of the VAT registration limit, commenting that this and the “simpler” income tax cash basis will help SMEs
  • In talking about the processes banks and building societies already have in place for savings, in claiming the abolition of the starting rate for savers won’t have much of an impact on banks’ processes.
  • In the general measure to let governments give tax exemptions for future sporting events without having to go through the rigmarole of passing specific legislation like they did for the Olympics and the Champions League Finals.
  • In a claim that “Chargeable gains roll-over relief: reinvestment in intangible fixed asset”  (sic: what, only one?) “makes the tax system fairer and simpler by clarifying the current legislation.” Uhuh.
  • Twice in “Modernising the taxation of corporate debt and derivative contracts” where it is claimed that the change to de-grouping rules “supports the Government’s objective of establishing a simpler, more certain and more robust tax system”.  Well, I feel much better for that.  You?
  • In the change to the ISA rules, so you don’t have to decide whether it’s better to have a few quid in a cash ISA or a few more in a stocks and shares one.

I mean, I’ll give you the last one, and I appreciate there’s some stuff coming out of the OTS so I think on the whole I’ll mark this one as “some progress; more to be done”.

Greener

Stop laughing at the back!

The “green” elements of the tax system are mostly around fuel duty, and it’s coming up to an election year, so you couldn’t expect the government to carry on with any of “that green crap”, now, could you?  Section 2.27 et seq in the actual Budget document, under the heading for spending on “Energy and Environment” is just embarrassing: 140 million extra on flood defences, granted, and £200 million on potholes but 2.31, 2.32 and 2.33 are laughable.  The government “welcomes announcements”, “has agreed” someone else will “set out plans for how they will help”, and “welcomes announcements by the vast majority of suppliers…”

No.  Green measures are definitely marked “see me” in red ink.

Fairer 

The thing is, if you’ve got a bit of money, then it actually does seem like a fair budget.  You can earn a bit more and save a bit more without faffing about with tax, you can do more with your pension than buying a bog-standard annuity, and you’re not going to have to pay more for petrol and beer.

But what if you haven’t got a bit of money to start with?  What if you haven’t just not got £15,000 a year to save in an ISA but you haven’t even got £15,000 a year AT ALL?  What if you haven’t got a job, or haven’t got enough hours, or you’re on a zero hours contract or you have a disability or are a carer?

Well you’ll be under the cap.  Because while there’s no limit on the amount of money you can accumulate in profits or rents or inherited wealth, and no-one is going to tax you on the money you make just from having stuff that accumulates in value, not even when you die and pass it on in their silver spoons to your children.

But if you haven’t…

… if you haven’t, well, there’s going to be a fixed amount of money.  Fixed like a granite slab over the heads of the ordinary, poor or unlucky; regardless of how many of us there are, or what changes in circumstances might have pushed us under.  And once you’re under, well, the cap fixes the amount we can share out.  Let’s fight it out amongst themselves.   I warn you not to be ordinary.

Sorry George, but beer and bingo aren’t going to distract us from noticing.  Fairness – must try harder.

Posted in Bit of politics, Budget | Tagged , | Leave a Comment »

h1

New Direction?

March 13, 2014

So if you believe what you read in the papers, boy band One Direction are asking their fans to lobby the Chancellor in favour of maintaining the foreign aid budget at its current level and to crack down on corporate tax avoidance.

Well… actually they are offering two tickets to each of their concerts via a lottery, and to enter the lottery you have to take part in various actions on a campaigning website each of which  gets you “points”.  If you amass twenty points you can enter the lottery, and you could amass twenty without lobbying George at all.  But still.  If you’re over 30, either say nothing at all or just say “bless” and applaud the sentiment.

You might think that One Direction are treading on dangerous ground because, as the newspapers are quick to point out, their own corporate structure is, um, efficient because, tax competitiveness.

However let’s assume all is for the best in the best of all possible worlds, and that there will be millions of teenage girls lobbying the Chancellor for tax changes in the Budget…

Whatever might they ask?

Well, if they are really interested in corporate tax avoidance, they might lobby for an end to tax competitiveness as an objective of tax policy.  They aren’t the same thing, of course, but it’s hard to fix avoidance – it takes money and resources, and we apparently don’t have any.  But tax competitiveness is a government policy.  It’s the idea we should lower our taxes so that firms will base themselves here.  It was one of the four objectives for tax policy agreed in the Coalition agreement (para 29) and, according to KPMG’s latest survey of tax competitiveness it’s been achieved.  We’re up there in the global competitiveness stakes.

“Even better, the results suggest there is no need for a ‘race to the bottom’ on rates with few respondents calling for further rate cuts.”

See George?  You could mark that one as “job done” and just stop.  Let the One Direction fans turn tax policy in, no, sorry, I have to say it, a New Direction.

Posted in Budget | Tagged , , | Leave a Comment »

h1

Balancing act

March 6, 2014

I was surprised at the response to my post yesterday about the four week time lag for HMRC repayments.  Because four weeks isn’t necessarily a ridiculous amount of time for HMRC to take to check a repayment.  Yes – if you’re thinking about the old-fashioned pre-decimal Inland Revenue kind of check, where an actual human being would look at your accounts every year and decide where they were in the ERA classification.  A for accepted, carry on and process, R for review, where someone would look at them and check the technicalities of the computation, and E for examine, where the basis of the accounts figures would be investigated.

Only we aren’t there, are we?  We’re in the post-merger, industrial processing, minimal handling era, where accounts should be processed now and checked later, and the only intervention should come from an actual risk assessment from someone other than the person who would be addressing any risks that had been identified.

So why would “process now, check later” take four weeks to process?

Well, being even handed about it, because you wouldn’t want to set up a system where someone can enter a tax return that shows they are owed a bazillion quid, process it, hand over a bazillion quid and then only later go knocking on the door to say, er, actually, can we have our ball back Mister?  So it’s absolutely right that HMRC have some kind of “wait a minute…” check in place before they give me my money.

And four weeks isn’t THAT long…

There’s an easy fix.

Let’s have a proper consultation and decide on a maximum amount of time that HMRC and taxpayers can live with (not a target time, a maximum time) for a repayment to be made.  Let’s say we fixed on, what, 14 days?

Write a piece of code that ranks all waiting repayments in order of value, and assesses the current average processing time.

And then repay the ones that would fall out of that time limit, starting from the smallest.

You would have a job gaming the system because it would be a dynamic limit, depending on how fast HMRC were going over a given period of time.  But the repayments of a bazillion quid would be guaranteed to stay at the top of the “check before repaying” list.  And my repayment would have a reasonable chance of  popping out of the system before the end of four weeks.

Except you’d have to stop HMRC from gaming the system too – make the system dependent on them dealing with the cases in order of value, largest amounts first.  So then there would be a proper decision-making process within the department over what resources to devote to pre-repayment checking, so they could make an operational decision what size of repayment would trigger them putting in extra resources.  Would they be happy with repayments up to a fiver, a grand, ten grand… being processed automatically?

Damn and I’m too late to put it in as a Budget suggestion for this year too!  But that means you have a year or so to pick the holes in the idea – go!

Posted in HMRC, Two fingers to tax | Leave a Comment »

h1

Get stuffed

March 5, 2014

I try the HMRC automated system again.  This time, because I’m trying to do something it understands (“chase repayment”) it’s actually kind of cool.  Or at least it would be, if you were a science fiction buff who enjoys living in the future and so gets kind of a kick out of interacting with intelligent sounding machines.  And not, say, someone who actually needed the money.

It asks me if I know when I last contacted HMRC about the repayment.  I enter the figures on the telephone keypad (rather disappointingly, since it breaks the illusion that you’re speaking to a machine that might pass the Turing test.  Because, you know, counting?)

The recorded voice informs me HMRC are currently taking up to [robot pause] four [robot pause] weeks to deal with repayments and sternly requests me not to contact HMRC again until [robot pause] twenty. fifth. march.

It didn’t actually SAY “get stuffed”.  But, honestly, I think I might have respected it more if it had.

Posted in HMRC, Two fingers to tax | Leave a Comment »