I wrote recently about Government and in particular HMRC disenfranchising the non-technical population. It is a sad situation, and it means that some perfectly intelligent people and in particular those of an older age group, or perhaps those who work with their hands have to employ people like me to do tasks with which they could have coped if dealing in paper.
Because there is almost no one in HMRC with whom the ordinary population can speak who actually knows anything about tax, taxpayers just have to grub along or pay someone else. It gets worse as demonstrated by a visit I made to an older couple this week. Their problem was that another elderly relative had died and they had been left to administer the estate. They had been sent a Form R27 which, for the uninitiated, is a Return of income for the previous 6th April up to the date of death of the deceased, and which is completed by the Executors or Administrators of an Estate. The couple had filled in the form but missed out completing two sections. An Assistant Officer at HMRC had sent it back with the two sections marked with red crosses and asked the worthy couple to complete the details required. Of course they dud not have a clue which is why they had telephoned me.
Now in the good old days these Executors could have taken their papers and the form to the Tax Office and had help completing the form on the spot. Nowadays, even if they could find the person who penned the red crosses, he probably would not have had a clue either, which is why after a couple of months he returned the form with such an unhelpful letter.
I reckoned the repayment due to the estate was less than £100, but the couple had not collected all the information needed to fill in the R27. I dictated letters to the organisations concerned, which the wife took down in shorthand, and said that when they had received replies they would be able to complete the form and send it off. If they were still unsure they should call me.
I came away feeling unable to bill for my 45 minutes plus the short drive. I had done the tedious Money Laundering check because that is obligatory but by the time I had done an engagement letter, written the letters myself and dealt with HMRC I would have done far more work and costs would have far exceeded the refund due to the very small estate. Effectively I had to treat it as charity work.
HMRC calls taxpayers customers, but customer service has become an alien concept. When I was a young tax junior you could track down anyone in the Revenue and get things sorted out over the telephone, which is no longer possible with the call centres.
Why should I have to do for nothing something HMRC cannot be bothered to do because it has changed itself into an even less friendly organisation than BT or my bank? Yes, those who cannot afford to pay for representation can go to TaxAid, but why should they have to, and though I am happy to help out, I think we tax advisers and agents are taken for granted and not afforded proper respect by HMRC. However, if they treat their customers like that, what do I expect?
© Jon Stow 2009
Showing posts with label elderly. Show all posts
Showing posts with label elderly. Show all posts
Sunday, 16 August 2009
Saturday, 1 August 2009
Stirring the pot
I watched with interest the interview on the Accountancy Age website with Dave Hartnett, Permanent Secretary for Tax about the New Disclosure Opportunity (NDO). To quote HMRC,
“the NDO will allow people with unpaid taxes linked to offshore accounts or assets to settle their tax liabilities at a favourable penalty rate. It will run from the 1st Sept 2009 until 12 March 2010.
If you have unpaid tax linked to an offshore account or asset to declare, to benefit from the terms of NDO you will need to notify us AND disclose (tell us the details, calculate the amount due and make a full payment) within a set time limit.”
There will be a specific lowered rate of penalty for those coming forward under the scheme. It is not an amnesty in that tax, interest and penalties will have to be paid; it is simply that the penalty will be fixed at 10% unless people had a letter from HM Revenue & Customs under the original Disclosure Opportunity and passed it up, in which case the penalty will be 20%.
The original opportunity for those with undeclared and taxable offshore income to come forward was in 2007. This followed legal action through which British banks holding their customers' money offshore were effectively obliged to disclose details of the relevant accounts as they have done for many years in respect of UK based accounts. HMRC wrote to the bank customers they thought might have undeclared accounts. This time round, HMRC will write to many more people since they have information from many more banks.
In the interview, Mr. Hartnett admitted that he had no idea of the number of people would come forward or the amount of money which would be recovered. This was an honest reply. We only gleaned that he thought it would be more than under the previous scheme. Pressed on the criticism that the earlier campaign was under-publicised he said that around £1M would probably be spent in advertising and initiatives. I wish HMRC luck with this trawl and will have no sympathy with those continue to evade tax. I will be happy to assist anyone who wishes to come clean.
The NDO is not the only trawl in which HMRC is currently engaged. Many possibly non-tax payers or marginal taxpayers will have received letters in the last couple of weeks asking whether they should still be receiving their bank interest without deduction of tax.
Those recipients I know about actually receive their interest net of tax (and pretty paltry interest it is at current rates), but although some have been happy just to refer the printed note to me, one very elderly lady became convinced HMRC were after her and would take away her pension. That second reaction was extreme, but I cannot help thinking that the distress caused be this second mailshot to people on low incomes will far outweigh the concern of the generally much wealthier recipients of the NDO letter. I am not sure anyone in HMRC will have thought about that and I am sceptical that any significant tax will be raised by this mailshot to the poor and elderly.
© Jon Stow 2009
“the NDO will allow people with unpaid taxes linked to offshore accounts or assets to settle their tax liabilities at a favourable penalty rate. It will run from the 1st Sept 2009 until 12 March 2010.
If you have unpaid tax linked to an offshore account or asset to declare, to benefit from the terms of NDO you will need to notify us AND disclose (tell us the details, calculate the amount due and make a full payment) within a set time limit.”
There will be a specific lowered rate of penalty for those coming forward under the scheme. It is not an amnesty in that tax, interest and penalties will have to be paid; it is simply that the penalty will be fixed at 10% unless people had a letter from HM Revenue & Customs under the original Disclosure Opportunity and passed it up, in which case the penalty will be 20%.
The original opportunity for those with undeclared and taxable offshore income to come forward was in 2007. This followed legal action through which British banks holding their customers' money offshore were effectively obliged to disclose details of the relevant accounts as they have done for many years in respect of UK based accounts. HMRC wrote to the bank customers they thought might have undeclared accounts. This time round, HMRC will write to many more people since they have information from many more banks.
In the interview, Mr. Hartnett admitted that he had no idea of the number of people would come forward or the amount of money which would be recovered. This was an honest reply. We only gleaned that he thought it would be more than under the previous scheme. Pressed on the criticism that the earlier campaign was under-publicised he said that around £1M would probably be spent in advertising and initiatives. I wish HMRC luck with this trawl and will have no sympathy with those continue to evade tax. I will be happy to assist anyone who wishes to come clean.
The NDO is not the only trawl in which HMRC is currently engaged. Many possibly non-tax payers or marginal taxpayers will have received letters in the last couple of weeks asking whether they should still be receiving their bank interest without deduction of tax.
Those recipients I know about actually receive their interest net of tax (and pretty paltry interest it is at current rates), but although some have been happy just to refer the printed note to me, one very elderly lady became convinced HMRC were after her and would take away her pension. That second reaction was extreme, but I cannot help thinking that the distress caused be this second mailshot to people on low incomes will far outweigh the concern of the generally much wealthier recipients of the NDO letter. I am not sure anyone in HMRC will have thought about that and I am sceptical that any significant tax will be raised by this mailshot to the poor and elderly.
© Jon Stow 2009
Saturday, 18 July 2009
Is "progress" disenfranchising the non-technical population?
A couple of incidents recently highlighted have highlighted how easily “progress” can isolate people and prevent them from getting help, and those people are often the neediest.
As a tax professional I am used to the bureaucracy of HM Revenue & Customs, though even for me it can be extremely frustrating. I received a form from HMRC concerning a pensions coding (Form P161 for the initiated). It was addressed to my firm, but did not have the taxpayer-client’s name on it, only the National Insurance number. I could not trace the number in my tax software and telephoned HMRC to find out whose form it was. However, having given the number to the call centre person, she told me I could not discuss the client unless I knew his / her name, but that was what I was calling to ask. She recommended that I sent the form back with an explanation and waited for them to respond by post. However, I knew that the Tax Office in question was months behind with paper correspondence, but even so, there was nothing to be done but to ring off.
Such an intransigent attitude and inability to take the initiative and work around to solve the problem quickly would deter any individual taxpayer trying to understand a confusing form. I can well imagine it would be intimidating. In the good old days…..etc.
The second incident started when one of my very elderly clients telephoned to say she had received a form she had to fill in to get the refund I had recently applied for on her behalf for 2008-09. I was puzzled, but asked her to send me the form to look at. It turned out that the form was actually for next year’s claim – a Form R40 for 2009-10 for the initiated. These elderly people, often on very low incomes and who are on low fees – my few “charity cases”- have no idea how to obtain even the most basis information or understand their entitlements. Just dishing out a form, which would have been best sent to me as agent anyway, is no form of proper communication. I have tried hard to get as much of these people’s investment income paid without deduction of tax so they do not have to get me to reclaim tax, but to no avail. Life would also be simpler if HMRC were to have the option to deduct PAYE from the State Pension, as they have in respect of most pension annuities these days, because fewer elderly people would need to complete tax returns and claims. The only thing is that they like their hands held over all sorts of financial matters even if it is helping them to find a good IFA, so to a degree I am a sort of financial social worker and some would rather pay me a little something so that I am available at the end of a telephone. I would do some stuff for free for a few if I thought I would be insured for it.
Still, I am in business in order to make a living. I do charge realistic and suitable fees to a majority of clients for the excellent service they get. The good news is that having searched my archived records on a whim I found the former client to whom the pension coding form related. I telephoned to ask if he wanted me to send it on and it turns out he would like me to act for him again due to a change of circumstances. All in all that was good news, but I just wish that the workings of government bureaucracy were simpler for the more senior citizens and for those who are not comfortable sitting at a keyboard and monitor.
© Jon Stow 2009
As a tax professional I am used to the bureaucracy of HM Revenue & Customs, though even for me it can be extremely frustrating. I received a form from HMRC concerning a pensions coding (Form P161 for the initiated). It was addressed to my firm, but did not have the taxpayer-client’s name on it, only the National Insurance number. I could not trace the number in my tax software and telephoned HMRC to find out whose form it was. However, having given the number to the call centre person, she told me I could not discuss the client unless I knew his / her name, but that was what I was calling to ask. She recommended that I sent the form back with an explanation and waited for them to respond by post. However, I knew that the Tax Office in question was months behind with paper correspondence, but even so, there was nothing to be done but to ring off.
Such an intransigent attitude and inability to take the initiative and work around to solve the problem quickly would deter any individual taxpayer trying to understand a confusing form. I can well imagine it would be intimidating. In the good old days…..etc.
The second incident started when one of my very elderly clients telephoned to say she had received a form she had to fill in to get the refund I had recently applied for on her behalf for 2008-09. I was puzzled, but asked her to send me the form to look at. It turned out that the form was actually for next year’s claim – a Form R40 for 2009-10 for the initiated. These elderly people, often on very low incomes and who are on low fees – my few “charity cases”- have no idea how to obtain even the most basis information or understand their entitlements. Just dishing out a form, which would have been best sent to me as agent anyway, is no form of proper communication. I have tried hard to get as much of these people’s investment income paid without deduction of tax so they do not have to get me to reclaim tax, but to no avail. Life would also be simpler if HMRC were to have the option to deduct PAYE from the State Pension, as they have in respect of most pension annuities these days, because fewer elderly people would need to complete tax returns and claims. The only thing is that they like their hands held over all sorts of financial matters even if it is helping them to find a good IFA, so to a degree I am a sort of financial social worker and some would rather pay me a little something so that I am available at the end of a telephone. I would do some stuff for free for a few if I thought I would be insured for it.
Still, I am in business in order to make a living. I do charge realistic and suitable fees to a majority of clients for the excellent service they get. The good news is that having searched my archived records on a whim I found the former client to whom the pension coding form related. I telephoned to ask if he wanted me to send it on and it turns out he would like me to act for him again due to a change of circumstances. All in all that was good news, but I just wish that the workings of government bureaucracy were simpler for the more senior citizens and for those who are not comfortable sitting at a keyboard and monitor.
© Jon Stow 2009
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