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HMRC postal delays
I wondered whether this is the general consensus in the profession and whether any other firms had similar problems.
Time to rethink the IR35 rules
Having just read Andrew Hubbard’s comments on IR35 (‘Time to rethink the IR35 rules’, Taxation, 26 September 2019, page 5), I could not agree more.
A company client with two directors and shareholders undertook some media relations work for a university, developing materials to send to journalists and suchlike. The work was carried out by a team of three. It was blatantly not within IR35, but the university deducted income tax and National Insurance. The remittance advice was sent out in the name of the company, but the university included the name of one of the directors on its payroll.
We asked why the university had done this. The response was that it was told to do this with all outside contractors. It was abundantly clear that it had not even considered whether IR35 was in point.
What made it worse was that, because the director was put on the payroll, HMRC now thinks this is continuous employment and has issued a new code against the company payroll increasing the tax on the director’s monthly salary.
Despite advising HMRC of the situation it will not revise the code until a P45 is sent.
More Kafka
Our office lease has recently renewed and we needed to complete a form SDLT4 as a commercial ‘buyer’. This form is not available online and requires a phone call to have the paper copies sent out.
We were told that the delivery time for the forms to arrive is three weeks. The filing deadline is 14 days.
Gary Richards, TaxAssist Accountants.
The tax gap
In Taxation, 27 June 2019, there were two interesting news items relating to HMRC. The ‘Administration’ item (page 5) explained that three categories or behaviour – ‘Failure to take reasonable care’, ‘legal interpretation’ and ‘error’ – represent 46% of the alleged tax gap.
Surely, by now, HMRC must have realised that the UK tax system is so poorly constructed that its own tax programmers could not even guarantee that payments on account for 2018-19, which were included in tax returns for 2017-18 filed online, could be collected on the due dates (see the ‘Self-assessment’ item on page 4 of the 27 June 2019 issue, referred to above).
Further, if HMRC still has problems with exclusions relating to online filing of tax returns – in fact, programming errors – how can it blame taxpayers who make similar errors on their returns? And as for failure to take reasonable care, I am sure we must all have seen cases of such conduct in our dealings with HMRC.
I also note that the report on child and working tax credits error and fraud statistics for 2017-18 indicates that about £1.46bn was paid out incorrectly through error and fraud. Who is responsible for that?
Finally, to my knowledge by restricting loss relief, charging draconian penalties for late filing of tax returns when no tax is due, the contribution for that type of additional taxation revenue is never reflected as the opposite to the tax gap. Is this an example of one rule for HMRC and another for the taxpayer?
Robin Summers FCA.
