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No Taxation Without Representation

Tax credits. The desk at my local MPs office was strewn with constituency correspondence from families suffering real hardship as a consequence of the government’s tax credit fiasco.

Last year, the Inland Revenue spent £15 million attempting to resolve the problems caused by the generation of incorrect payments under Gordon Brown’s flagship tax-credit scheme, which in many thousands of cases has instead of lifting needy families out of poverty, has delivered them into the arms of rapacious money-lenders.




Furthermore, the real cost of administering the scheme has been revealed as costing £403 million a year, nearly £71 per award, in stark contrast with the £22 cost of administering each self-assessment tax forms.

But if you think that this is “eGovernment @ its Best” then you might not have come across the problem with business filing of year-end accounts. I have and for a few hours at least, it sent me into a panic.

Government has been encouraging businesses, especially small ones, to file VAT and tax information directly through its Government Gateway. Having experienced a number of problems with VAT processing in the past, I refuse to file online in the Luddite belief that is safer to use paper and stamps and I wrote last year on how the Revenue managed to receive six copies of my company PIIDs and still manage to send out a fine me for non-submission. They admitted that they had them all but had processed none.

This year’s electronic surprise from the Inland Revenue and now, Customs & Excise came last week, with a call from the Revenue Collections Agency, a department you really don’t want to hear from at any time.

Apparently, the call was a final warning, as they had been allegedly writing to the company accountant, warning him that the company P35s had not yet been received and that PAYE and NI payments remained outstanding for employees for the final quarter of the personal tax year. The gist of the conversation, ever so politely, was that I was in trouble and I had until 8PM, the following day to resolve the matter or face recovery proceedings.

My life flashed in front of my eyes. How could such a thing happen and where had we dropped the ball? The accountant was out until the end of the day and so I started trawling through the files, which contained the P35 details and told me that at least the NI and PAYE payments had been made and reconciled on the bank statement.

I called the Revenue back and explained that my records suggested they had been paid and that most likely, they had the P35 information they needed as well. They gave me another number to call, who gave me another and then another, until I reached the right person in Lothians. “Ah yes,” she told me, “we have all your information, you filed electronically didn’t you?” “We might have done”, I replied “but I can’t contact out company accountant to ask at present.” “You did file online”, she continued “and you’re all up to date. We have had a problem processing the online filing and the collections agency is not supposed to have acted against anyone until this was resolved. I’m really sorry about this, I’ll give them a call and explain and then they’ll leave you alone.”

This little incident took three hours out of my working day and the Inland Revenue has now posted an explanation on their website which you can see below. At what point though in the Revenue’s sorry catalogue of failures, does saying sorry to the citizens and businesses of this country become an inadequate excuse for a display of ineptitude and inefficiency above and beyond the cal of duty?

How much longer can government continue to apologise for failures in its management and electronic systems that continue to cause inconvenience or real hardship to the citizens of this country? "As long as it wants", maybe the answer on present form to date.

Have we sent you penalty notices or reminders by mistake?

In mid-June you might have got an online filing penalty notice or a reminder for form P11Db, even though you had already sent your Return online or the P11Db was not due. Or you may have been approached by our staff for your Return and/or advised you that you may have incurred a late filing penalty. As soon as we found out that these things were happening, we told our staff not to issue any more reminders or penalty notices and discharged any incorrect penalties. We are very sorry for any inconvenience caused.

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