Fun with HMRC's Online Services Helpdesk

I went through the authorisation process to act for a new client, which involves entering the client's Universal Tax Reference and post code on-line, following which the client is sent an Authentication Code which he or she gives to the agent. We agents enter this code and HMRC will talk to us about the client.

I duly completed this process for a new client, but the client did not appear on my on-line list of clients on HMRC's website. I called the on-line help desk and hung on for ages (well, twelve minutes) listening to their muzak before giving up and sending an email

“We gained authorisation as agent for this client two weeks ago via the on-line procedure but he does not appear on our on-line list in the agent’s pages on the website. Could you please investigate this and append his details to our list?

Please advise when this has been done.

Thanks and regards”

Their reply:

“Dear Mr Jon Stow
Thank you for your email.

Unfortunately we need more information to progress your enquiry. Please contact the Helpdesk on 0845 60 55 999 and have to hand your Agent Code and access to a computer. Then one of our advisors will be able to assist you further.
For security reasons specific personal data may have been removed from this email.

Regards
Online Services Helpdesk”

I responded, a little irritated I admit:

“I will telephone later, but only emailed you after hanging on for 12 minutes on the telephone this morning waiting in vain to be dealt with. Can't you call me?”

Their response:

“Dear Jon Stow
Thank you for your email.

We are unable to arrange a call back, we have all advisors on incoming calls to ensure we answer as many calls as possible.

For security reasons specific personal data may have been removed from this email.

Regards
Online Services Helpdesk”

Well, firstly they may be answering as many calls as possible but clearly there are many they are not answering, including mine. Secondly, in the time it took to reply to two emails, or even only to the second one, surely they could have picked up the phone and talked to me?

HMRC are so useless and inflexible in communication now at every level. Wholesale cuts appear to have been as much at the expense of common sense as money, but no matter how much agents and taxpayers keep pointing this out, and despite initiatives such as Working Together, HMRC's meetings with tax and accountancy professionals, where it matters no one is listening; apparently not even their head honcho, Dave Hartnett who was charged with making the cuts by Gordon Brown.

Frankly it is not only costing us agents money in wasted time, the inefficiency and lack of leadership and responsible staff must be costing HMRC more than it saves in reducing their staff's ability to deal with issues to the lowest common denominator.

 Postscript: In the interest of fairness I should say that by telephoning on a Saturday I managed to speak to a helpful lady fairly promptly and it looks like the matter will be resolved, thanks to her. However, HMRC's delivery of customer service leaves a lot to be desired, not least that we would rather not be called customers.

A week of curiosities and a valuable reminder

It has been a strange week. On Monday I went to see a client to collect his tax papers, only to find that they were in a locked cabinet to which only his wife had the key, and she was out. It was a short meeting as a result, and I did wonder why my client had not telephoned to save me the journey.

Two less eventful days ensued, and I went to my monthly local meeting of tax practitioners on Thursday. “Tell me, everyone” I said, “what do you guys do in the way of marketing?” Six faces looked back at me blankly. “Marketing? We don’t do marketing. We don’t need to because we always have enough to do.”

I was amazed, and actually even felt a little foolish for a moment. After all, I spend quite a lot of time marketing. I have one local targeted ad, and apart from that I work on my website, my blogs, the social networking sites, Twitter and face-to-face networking. All this results in work coming in, which compensates for the occasional client of mine who finds it necessary to dispense with my services. There is always some attrition. When people leave me it never seems to be because they have gone off my firm or its service. People move and like someone local to look after their tax affairs, or they sell up everything and move abroad.

How do my colleagues not have net losses of clients? It can only be because they are longer established than me (a mere seven years) and get plenty of referrals without looking for work, or they are good at client stickiness and find it easy to keep their revenue from each increasing year on year. I admire that, and am even envious though I worry about their complacency. Apparently any sort of networking is alien to their natures. I enjoy it and it gets me out, gives me a chance to feel useful in connecting people, gets me work and avoids the loneliness of some small business owners.

I went back to the office to puzzle over an email from a client’s wife. “I haven’t time to send you my husband’s papers so that you can do his tax return as we are going on holiday for the whole of August and we need his refund by September”. Now, hang on, she lives a long way from my office and I cannot easily take the ferry to do my customary house visit, but we have broadband and live in an electronic age; hence the email. Said lady then goes on to ask me how to fill in the Return by requesting a technical calculation for last year. I answered her question of course, and wish her the best of British with the Foreign and Non-resident pages which are hardly logical even to us professionals (we always seem to have to do work-arounds to get them to make sense). I have not had a response to my somewhat injured one, but am not holding my breath. Needless to say I advised her that if she sent me the information she could have emailed copies of the Return and accounts for approval easily by the end of July. It would be inconvenient but I will always try to be flexible to meet my clients’ needs. I am not holding my breath, though.

Late on Thursday, I saw another new client for the first time. It turned out his previous adviser had died, and no one seemed to be running the practice now. I think the accountant was unqualified but nevertheless may have been very good at what he did. The client had obviously found his service good. In these tragic circumstances it is a reminder that we should always allow for someone to take over the reins of our business if we become sick or die suddenly as this guy did as a result of an accident. We owe it to our clients and also to our families as it is better to have a saleable business as a going concern than a business which is as dead as the owner.

If not lessons, I feel I have had some useful reminders. I must check that my nominated successor is still happy to run my practice in the event of my incapacity as I have directed. I will call her to check.

Taxpayers as customers and the service they receive

I, in common with most other taxpayers, resent being called a customer of HM Revenue & Customs, when there really is no choice of supplier. We are captives of the system and we cannot take our business elsewhere. This is an old saw, but if we are customers, we have to ask what we are getting in terms of service; value for what we pay is another matter, and one of a political nature.

HMRC, or at least the Inland Revenue as they were called, did once upon a time provide a service to individual taxpayers, prior to Self Assessment. Of course many people feared the tax man as they thought, even though going back a long time the majority of staff were women as now. However, with minor errors in Tax Returns or even quite major but obviously unintentional incorrect completion of Returns, one could expect a letter suggesting a correct interpretation, or very often a telephone call from the Tax Office along the lines of “Have you forgotten your bank interest? Drop us a line with the figures and we will make an adjustment.”

Now it is true to say that there was a lot wrong with the old system. There was a tradition of issuing estimated assessments every year against which the taxpayer or the adviser would appeal as a matter of routine, but this was largely a question of regulating the flow of tax payments as routinely one would offer a payment on account. It was a daft system latterly (that is prior to 1996-97) but it was a system that was many years out of date. The estimated assessment routine became more fashionable in the latter stages before Self Assessment as the Revenue realised that they had to get money in. When I started in tax, one rarely saw an assessment issued unless a Tax Return had been put in, and there was little incentive for the more laissez faire taxpayers to do so. Why put in a tax return and have to pay tax, cutting into one's holiday money for St. Trop?

So, something had to be done, and though there had been tightening up of interest charges for late payment of tax, there really needed to be a system of making people submit tax returns and fining them if they didn't, as other jurisdictions already did. I think the Revenue had looked at America's Internal Revenue Service and thought they were along the right lines.

Anyway, the major change was to make people responsible for calculating their own tax liabilities, and with the wholesale introduction of a new computer system they had an automatic checking facility and automated fines and levies of interest charges. The major triumph at the time was to start massive cost cutting (this is one thing we cannot blame the current Government for) by getting rid of more qualified staff who actually knew about tax in favour of computers and call centre staff. Not all of this happened at the same time; there has been and will continue to be for a while yet an ongoing process of closing tax offices in favour of call centres and reducing the numbers of personnel who actually understand tax issues.

As the onus is now on the “customer” to calculate his or her tax due, this means that many who originally filled in the figures and waited for an assessment now have to either employ someone to prepare the accounts and tax return or wade into the online service and hope the figures they put in are the correct ones, especially if they are based on prepared accounts.

I earn my living to quite an extent by preparing Tax Returns and accounts for people who are not confident or know they are not competent to do it themselves. Obviously I am not complaining about this, but I think it is unfortunate that the amateur has to wade through so much information to manage without help. The Tax Return Guide is helpful with the basics, but cannot educate anyone in all the tax rules that we professionals have to know, and that is fundamentally unfair. It means that the individual taxpayers largely have to pay someone else to do what the Civil Service used to do on their behalf.

It is not as though information is very easy to find on the HMRC website. Although at a tax professionals' meeting with HMRC we were told that the website was being made much easier to use, I had to use Google to find on the HMRC website what their own search facility could not: that 5.75 million tax returns were filed online for 2008-09 by the deadline of 31st January 2009. I suspect a good proportion of those filed were by agents such as my firm. There were many glitches using HMRC's own online program, such as an inability to bring forward trading or lettings losses from a previous year. There was a work-around involving writing a note to oneself for next year. I did one Return using HMRC's own software, and had I not been a professional I would have been driven to distraction and probably given up.

The point of writing this piece is not to say that we should go back to the bad old days of estimated assessments, and the confusing-for-many previous year basis of taxing trading and untaxed sources. It is just that over ten years down the line of Self Assessment there is still so much work to be done in terms of improving the system and getting an HMRC website that is fit for purpose. Yes, the information is mostly there and the site is vast, but if a tax and internet geek like me cannot whistle up the content I need in short order, what hope is there for someone who has little tax knowledge, because that person will not even know what he or she is looking for? HMRC need to look at the news websites such as the BBC and CNN to see how the categories can be drilled down better into general headings, with menus underneath, sub menus and so on, so that amateurs (and journalists trying to check the ins and outs of MPs' expenses or whatever) can find what they are looking for.

Why has it taken so long to make the system work, and how much longer is it going to take? When is the “customer” going to benefit from doing all the work on the Government's behalf? Is not the taxpayer in reality more of a part-time contractor or employee engaged by the Treasury?

Have you submitted your Tax Return yet?
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Online issues and January procrastinators

I do not normally use the HMRC online software to do Tax Returns as third party is much less hassle. However, I did have occasion to try it recently and found that in dealing with lettings where there is a loss in the year and a loss brought forward the HMRC system is unable to aggregate them and carry them forward. When I telephoned the helpline and finally got through I was told it was a known issue and I should make a diary note of losses brought forward for 2008-09.
 
I would have thought that this loss scenario would be the most common given the highish interest rates on mortgages that prevailed to the end of 2007-08. It is extraordinary that this issue has not been sorted out. I decided the safest approach was to make a white space note about it.

I have just taken a call from a new enquirer. He sold his company twelve months ago for a lot of money, received a termination pay off as well, has a lot of paperwork to go with it and can I quote a fee for working out his tax position without having seen any detail anyway? Can I do his Tax Return for 2007-08 by Saturday week?

Well, no I cannot quote other than the high fee I told him to err on the safe side. Would you ask a painter to quote to decorate your house if he hadn't been to it? Could we do it anyway in the time when we haven't seen any of the paperwork in detail and other clients are in front of him? We're happy to do it in February and in the context of £100 fines it seems more important to get it right given the amounts involved rather than lose sleep over a late-filing penalty. Anyway, what kept him so long?

I am sure our marketing friends would think I missed a trick somewhere and sales people would think I should have "closed", but what with the shortage of telephone boxes to change in I am not sure what I could promise if the Return had to be done by the end of the month. I believe I did the right thing and am not going to lose any sleep over it.

Back to work with the other January late runners and thank goodness for my more considerate clients!

Ulterior motives and deadline woes

Well, the deadline for submitting paper tax returns for 2007-08 has passed with Halloween, and with it the Government’s trick or treat. The trouble is that this messing around with deadlines really is a trick. We have until 31st January 2009 to submit Self Assessment Returns online, and the real reason for the earlier deadline for submitting paper ones is to force online submission to save costs. HM Revenue & Customs probably hoped that people would not get their acts and papers together by the end of October, and would be forced to investigate the online process, either doing it themselves if computer literate, or otherwise having to employ an agent. Then they will be locked in for the future to the online system.

Now, as an agent this will bring me more business, but the truth is that HMRC have got their cost cutting in early; they have already cut so many staff and are so short of resources that they take a long time to process paper returns. It is known that the Sefton office in Bootle is months behind in dealing with paper returns. Even where returns have been submitted for several back years following discoveries by HMRC of possible undeclared income, they are still taking weeks and months to compute liabilities. They used to be so hot on that, but trained staff who understand tax technicalities are in short supply in HMRC.

I feel very sorry for the staff that have to answer the phones. None of them knows anything about tax and consequently each has to take a lot of flak. We are not allowed to talk to those who actually understand and do real case work.

The deadline change for paper returns suggested by dear Lord Carter was just a ploy to get returns submitted online and get the Revenue computers to do all the work. Yes, it saves taxpayers money but it does not help the older taxpayers or those who are not used to computers; in the main it will cost them money to have their tax affairs sorted out.

Has the Government and HMRC been entirely honest about this?

Tax Returns and Crimewatch

People in my business have been wrestling with a problem outside our control for the last couple of months, and that relates to Tax Returns. For a few years, now, HM Revenue & Customs (as it now is) has been encouraging everyone who files tax returns to “do it on-line”, and especially tax agents such as my firm. This will be the fourth year we have filed clients' tax returns on-line, and by last “tax season” nearly all the problems had been ironed out. Most agents use third party software to file on-line, as the Revenue's own system is very cumbersome and involves everything being entered whilst connected to the internet, and with an irritatingly short time of inactivity before one has to re-log in. Those agents involved in the last mad rush on 31^st January 2008 had little difficulty in filing on-line as their data transmissions went through even though the server for the Revenue's own filing software crashed on the vital day. So of course, we agents were reasonably happy, though we could not at that time access details such as what our clients had paid on account.

However, HMRC had commissioned a report from Lord Carter (see here) as to how things should be done in the future. There have been changes because of representations mainly by the professions involved, but as a result of this, paper personal tax returns have to be done by October this year though the last filing day for on line returns is still 31^st January next.

One curious recommendation which has stuck is that all facsimile returns have to be in the Revenue's own PDF format so that paper ones can be scanned in using OCR. One can see the point if we are posting paper returns, but actually we are supposed to transmit the details electronically, so the logic defeats me. Anyway, what has happened is that the returns have been completely redesigned to fit the paper PDF format so that the facsimile returns we agents used to send to clients for approval are no longer acceptable to HMRC (even though we used to PDF them anyway). Consequently this has meant a complete rewrite of the software by the third part providers. Well, that's their job of course, but who ends up paying for this?

Anyway, the software people have done pretty well, but guess what? HMRC's software for processing the on-line transmissions has all sorts of problems, tax returns are getting rejected for no sensible reason and time is wasted by agents on the telephone to their software support people who are swamped. One of the most stupid errors is that the tax return says that if sole traders have a turnover of less than £30,000 then they do not have to detail their expenses but just lump them in one box. However, HMRC will reject a return done on-line on this basis even though one is following the instruction to the letter.

It all seems to be change for the sake of change, or a result of that other bugbear of corporate and government-speak “modernisation”.

This bring us to Crimewatch, the June episode of which was shown on BBC1 this week. For years it was presented from a studio by experienced broadcasters and whilst a little formulaic it held interest because of the material but also because of the attention to continuity and minimal distraction. So, some bright spark at the BBC obviously decided to “modernise” it, get rid of Nick Ross probably because he was “old”, and change the compelling and considerable journalist Fiona Bruce for Kirsty Young. Not content with that they have scrapped the studio and present the programme from some sort of warehouse with scaffolding and gantries as furniture, they cut between various non-professional broadcasters who are or were police officers but don't know how to talk to a camera, and keep having different segments by these people in different parts of the warehouse. Poor Kirsty Young, an experienced broadcaster herself stumbles round this dark edifice and at times seems as bemused as many of we viewers at home. The programme could be interesting if the content were well presented, but its earnest production is not entertainment and some of us are going to switch off.

My lesson for the BBC and for HM Revenue & Customs? If it ain't broke..........

Post-holiday blues

I have been a bit quiet of late. You could understand that a number of developments in the UK tax world have pretty much left me speechless. We have had the Budget, largely flagged in advance with the capital gains changes etc. but the income-shifting fiasco has been put on hold. Unfortunately it is not a dead duck and will reappear not much changed, I suspect; a serious canard if ever there were one.

We tax advisers have a job squeezing our holidays in these days but we managed a couple of weeks in May in the steam room that is Florida at this time of year. Whilst I had my back turned, Darling had another Budget to compensate those who lost out from his organ-grinder's announcement of the abolition of the 10% band – well, one of them – in the 2007 Budget. Everyone knew about what had happened last year, except apparently the Government's own MPs. The give-away will apparently cost the Exchequer £2.7 Bn. This will be why the Government probably secretly welcomes the high oil price, at least in the short term, because of all that lovely extra tax it is collecting. After all it cannot really borrow any more, can it? Oh, well, I expect you are right.

Anyway, time is money for businesses, so I am especially upset at the problem we are having preparing and filing Self Assessment Tax Returns on-line for 2007-08. I said at the end of last year that the HMRC on-line system was much improved. So what happens? Wholesale change at the behest of Lord Carter and all the work and progress over the past few years has gone out of the window. I have lost time with the software not working, my supplier is over-stretched and work is not getting out of the door as I would like (any of my clients reading this need not worry; they will still get the same good service but it is just costing me more at the moment). If it ain't broke.....