HMRC postal delays can cause hardship

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My client has a part-time job. A year or so ago her husband was out of work for a short while. They both had to go to the JobCentre to see whether they qualified for benefit. They didn't qualify. However for some reason the JobCentre told HMRC that my client might be eligible for Jobseekers's Allowance. A year later HMRC issued a Coding to restrict allowances so that my client had to pay tax on her small salary because HMRC thought she had unemployment benefit as well as being employed.

I called HMRC and told them that my client is not in receipt of benefit and never has been. HMRC's call operative told me they will not issue a Code to refund tax that has already been deducted in error until my client obtains a letter from the JobCentre confirming that she never had any benefit. Her word and mine are not good enough. “Well” I said “you take three months to look at the post”. HMRC's person admitted this was true.

This should be a simple matter to deal with. However for an individual with small earnings HMRC's bureaucratic requirement for a letter from another Government department and refusal to take the word either of someone who completes a tax return or of her agent is quite likely to cause hardship. If HMRC was anywhere near up to date with the post it wouldn’t be a problem.

This sad state of affairs is due to cuts ordered by Gordon Brown. These cuts have made HMRC very inefficient and they fail to deliver a proper service to honest taxpayers. What hope they can catch the tax evaders? They very likely take three months to open all those letters from “A Well-wisher” grassing up the dishonest tax evaders and how long would it be before they took action? Actually a long time judging by how long it has takes to get people registered in the system when they have come clean of their own volition.

More in sorrow than in anger - Jobcentre bully

I heard something this week in the course of business that really upset me, and it has spared you, until I get around to it, a commentary on what activity might constitute trading and what might not.

I saw one of my clients this week to collect her books and those of her husband as they are both self-employed. Mrs. Y works with children. Times have been hard and generally people do not want to pay for luxuries and extras even for their children; hence Mr & Mrs Y as I shall call them have both been struggling and Mr Y had been unable to find any new assignments for a period. Fortunately his attributes have now landed him a decent engagement.

During the period of famine in the household my clients went to the Jobcentre Plus in the locality to apply for Jobseekers Allowance for Mr Y and for Housing Benefit since they have a mortgage to pay in addition to Council Tax etc. Mrs Y was required to produce her last accounts, prepared by my firm. The Jobcentre person looked down the profit and loss, or I should say, income and a lot of expenditure. She said “Of course I have to take these with a pinch of salt. Accountants produce figures to most suit the client. I cannot take into account some of these expenses” and she struck out the rent Mrs Y pays for her workspace used once a week in which to teach her pupils. This is the biggest expense, of course. Mrs Y told me she was shocked. Of course she was. When she related the story, I said “Why ever didn't you call me to ask me to speak to this person?” Mrs Y said that she felt the whole experience of dealing with the Jobcentre person was so humiliating that she did not want to prolong it by taking the matter up. She was clearly even now, months after this interview, quite shaken up.

Well, as I said, I am upset. Firstly, my client has been treated very badly by an intimidating and ignorant public servant. I know (because after a time in our business you get a nose for “dodginess” in people) that Mr & Mrs Y are completely honest, straight and decent people who do not deserve this treatment. Then again, I feel insulted on behalf of all tax advisers and accountants. The accounts were true and fair and every item was accounted for, backed by advices and receipts including obviously the rent arbitrarily “disallowed” by the aggressive woman in the Jobcentre, and of course all reconciled to my client's bank statements, paying in books and cheque stubs. I hardly need to spell it out except that I still cannot get over the attitude of the person.

In the end, despite my righteous anger at the aspersions cast at me, the worst aspect is that my clients have been deprived of benefit that is properly due to them as good taxpayers all these years. This sort of thing may be going on up and down the country for all I know. I wish my clients would make a complaint and I would back them all the way, but they would rather stay away from nasty officialdom, and I cannot say I blame them.

© Jon Stow 2009