Wednesday, January 03, 2007

Paper Foxes

I see that the Xmas rubbish is still where I left it, outside the gate; the same thing for everyone else in the street waiting for the rubbish collectors. The interesting thing is that every bag has been torn-open and rifled and it's not been by seagulls or foxes either.

I started using a shredder a couple of years ago, knowing what I do about rampant ID theft in this country, which is fast becoming a plague. A couple of household bills and before you know it, someone is claiming benefit in your name. also check your credit rating every year, just to be sure that someone else isn't using your address.

Now if you thought the taxman was proof of our living in a police state but with none of the benefits, read today's newspaper story that tax inspectors are being offered bonuses of up to £2,000 to squeeze more money out of the rest of us.

They can earn up to three per cent of their salary if they track down more unpaid tax.

Official figures show the taxman takes nearly a quarter of all pay, compared with less than 19 per cent before Labour came to power in 1997.

HM Revenue and Customs is under pressure to increase the amount it collects every year, which means tax inspectors are feeling the heat.

Statistically, this all means that someone reading this piece of news is going to be on the receiving-end of the government's own extortion racket. I recall there was a scandal about the same thing in the USA a few years ago but here, we fail to recognise that civil servants can and often do abuse their powers where financial "incentives" are concerned. What's your view? Do you trust the taxman to be fair?

Taxman's bonus for making you pay more : "


Anonymous said...

Now I'm a Westgate resident with a normal rubbish collection day of Thursday. As the service was supposed to be normal for me last week (Christmas week)shouldn't it be normal collection day for us? Perhaps I can reclaim a proportion of my property tax back....Silly me this non refuse collection saving went to pay the Christmas bonus. By the way can anyone tell me the earliest time of day their refuse is collected. I'm looking to see if anyone can beat 05:00am


Anonymous said...

I realise that this is just another of your politically-motivated anti-Labour posts, but are you seriously suggesting it is wrong for Revenue officials to be incentivised to gather in all the tax that is OWED? For someone advising the Conservative Party (and being paid for it?) that seems an amazing standpoint.

I might understand if you were arguing against creating new taxes, but condemning action to collect in what is due - often from unwilling payers? You are way off beam, in my view.

You castigate local "common" thieves nearly every day, yet you appear to support this type of thief.

DrMoores said...

Vacuous rubbish! You know exactly what I mean and I suggest that you research among the publications like Accountancy Age to reveal the dangers that result from incentivising the Inland Revenue. i.e. how a random tax inspection has to recover a certain level of tax to achieve its targets or the inspector has a perfomance problem. This is regardless of whether the person whose return has been chosen might reasonably owe any tax or not!

Here's a reader quote from a recent example. Inspector to accountant. "I see that Mr X has not registered the purchase of a 'Topic' bar on this petrol receipt. It should of course appear in his P11D". "You realise that failing to propely register a benfit carries a fine of £1,000?"

And of course the inspector now has the right to go back six years through the accounts on a fishing expedition for more fines/tax as a consequence...

A true story so get real!!

Mr Friday said...

It is of course indicative of Labour's obsession with target-setting and monitoring for government departments which drives people to act in this way.

Sadly, what Simon has reported is the thin end of the wedge. More creativity and ingenuity goes into making figures look good so targets are "met" than goes into genuinely improving things for the customer.

Anonymous said...

I have had 2 Inland Revenue investigations in the last 12 years,one was unfair and extremely intrusive.
The more recent by IR Ashford office, a Mr Ashman was the Inspector, was fair and pleasant and resulted in a payment to the IR of some unpaid tax due to an accountants innocent error.
I did object to the methods of the first investigation, however I can't say much about the second except that it was justified and showed up an underpayment which was quickly rectifed.
I had my faith in IR Inspectors restored by Mr Ashman. They are not all bad and vicious. He probaly won't ever make a fortune from his bonuses but at least he is a nice person.

Anonymous said...

Perhaps there are some good ones. Mine involved blackmail even though my accountant believed everything was kosher. It was a bit like the old "Opportunity Knocks" television game. "I've started so I'll finish" or "you pay me 3 grand and I wont go through your books" The accountant said that it would cost me about that in his time if the taxman started and they know it..2 to 3 grand being about normal to call them off!

Anonymous said...

I'm a civil servant and bonuses of up to £2K-£3K will only really apply to sevior civil servants on £65K p.a. or more. I take issue with 4:18 who makes it sound like the taxman was pocketing £3K himself. In 2005/06 HMRC collected in excess of £400bn revenue whilst sticking to their budget of £4bn. People slate civil servants for not being efficient because it makes them feel better about their own shortcomings. I see too there are big staff cuts due too in the ex: Inland Revenue.

an accountant said...

Free advice - take out insurance against an inspection. It's only a few quid a year, and could potentially save you thousands.

DrMoores said...

4:18 seems a bit harsh but I think I understand what he means about targets. Don't forget that Gordon Brown recruited 13,000 new tax inspectors, leading me to quip at the time that we now have more taxmen than front-line soldiers fighting the Taleban. sad but true! - Perhaps we should send them over there instead, that would soon sort them out!

or even pay the troops a decent wage with proper medical coverage!

Anonymous said...

The spending review in July ’04 the Chancellor estimated 12,500 jobs would be lost by March 2008. A further programme of job cuts and office closures was announced a month before Christmas so has Brown sought to make the job cuts (good publicity as ever to bash civil servants) and then quietly said he'll put some more in place? Over to New Labour for an answer.

Mr Friday said...

I'm not sure that people slate civil servants because it makes them feel better about their own shortcomings.

I tend to have a rather dim view of them based on their complete lack of accountability when things go wrong (often at great expense to the taxpayer), non-contributory pensions, paid time off to take part in fishing and football tournaments and the like. This is against a backdrop of failing public services and a distinct lack of quality everywhere whilst vast armies of staff are employed to set and monitor arbitary targets which managers then spend inordinate amounts of time fiddling and cheating to show they "met" their targets.

Re - the point about lots of job cuts. This is classic smoke and mirrors stuff. How many people have had their job actually "cut" and not redeployed elsewhere in the civil service ?

DrMoores said...

I can't recall whether I was still working for the Cabinet Office when my boss announced 80,000 civil service job cuts (2001/2?) Since then of course the civil service has taken on, I think 130,000 - don't quote me, it could be more... the cuts were simply retirement and re-deployment into mostly other departments or new agencies like Lord Faulkner's Department of Constitutional Affairs.. right out of Jim Hacker's "Yes Minister" an enormous government department which nobody really knows what it does!

Anonymous said...

This conversation reminds me of the Wilson goverment, Dear harold announced that he would slash the civil service by 250,000. he then made GPO telephone,s a public not civil service,We still kept our civil service benifits tho,

Anonymous said...

Mr Accountant of 4.49 what is a few quid? my accountant is offering me that insurance against IR investigation (he told me most of the IR investigations carried out over the last eight years are on people or small businesses with an income of under £100.000 leaving the big boys to free to carry on playing the system)... anyway what is the cost of your insurance against this inspection/investigation? whatever it is its more expense to stay being honest (a rare thing in these parts)

Anonymous said...

Hi again, I am the 3.56 poster who had 2 investigations in the last few years.
I belonged to a trade association who include insurance against tax investigations in their subscription. The whole subscription is about 100 pounds odd per year.
The bill for professional representation in my last investigation was about 2900 pounds plus vat.It was worth it, as the investigation went on for over a year and got quite complex.
The insurers paid it without a murmur, although I was guilty of my accountant's negligence - if you know what I mean, I signed the tax return so became guilty of the accountant's mistakes as far as the Revenue were concerned.
I did not have to pay any penalties or I would have sued my former accountant.
I have recently found out that my former accountant didn't claim lots of allowable expenses which would have lowered my tax bill over the last few years, I would recommend getting a second accountant's opinion of your tax return and accountant's computations, for several hundred pounds I believe it is likely to save you money.
My tax bill was 19,000 lower this year after I got a second accountant to audit the first accountant.
One organisation which includes insurance in membership is Federation of Small Businesses.
I think that in my case it probably cost the Revenue more to perform the investigation than they recovered but thats their problem.
Remember many investigations are started because of malicious, even anonymous,sometimes wrong information being given to the Revenue by exwives, expartners, business associates etc.

Its very dispruptive and upsetting, and you need perfect accounting records to prove your side of the case.

Anonymous said...

No one has mentioned yet the Inland Revenue's lack of success in stopping and bringing before the courts, organised criminals estimated to be ripping off VAT via the 'carousel racket' to the tune of £2.2 BILLION last year. So we have another typical Blair's Govt initiative to hammer the easy targets; bully and harrass the generally law-abiding population whilst being utterly ineffective about the serious problems.

Northcott-Trevelyan said...

Mr Friday, are you a civil servant basher? If you're so envious of civil service non-contributory pensions and the alledged rest why not join a department? No one has stopped you, have they? Civil servants earn between £11K for a Admin Assistant to around £23K for an Executive Officer so that must make it worthwhile? (please add £7K for shift workers on 7-3, 3-11, 11-9). These are the grades that keep the service and this country running. As for efficiency, 'failing public services' HMRC for one aren't exactly failing raking in £400 bn on a £4 bn budget which they have kept to in 2005/06. Show me how many private sector industries are that efficient? As for the others how do their failings balance against their achievements? Do you have some figures? I'd like to know. You must have sound evidence for your statement.
Please clarify these 'vast armies of staff' you mention which 'are employed to set and monitor arbitary targets which managers then spend inordinate amounts of time fiddling and cheating to show they "met" their targets.' Or is this a blind flippant comment? I doubt you know anything about the workings of the Civil Service just what you read in the press, and lets face it, in my opinion the British Press is one of the worse in the world.

Oh what's this job? Private sector, IT Sales Exec, £30K-£45K p.a. basic & NON-CONTRIBUTORY PENSION SCHEME. Shame, I should have gotten into computers earlier.

DrMoores said...
This comment has been removed by a blog administrator.
DrMoores said...

I'm writing a report on national productivity at the moment. The problem is that we have very little to show for the legions of public sector workers employed under this government and productivity is going backwards as more paper and red-tape is shuffled around

Anonymous said...

As A Civil Servant myself I am afraid I can't fully agree with Mr. Northcott-Trevelyan. In my department we have taken on legions of staff in the past few years. The system of reporting requires that all these people have managers. Our Senior Management has increased five fold or more in five years or so. One would hope that a future government would look at this needless expense and consider a cull. As Dr Moores has already pointed out the current government has promised cuts but many of these are actually redeployments or "natural wastage"

HMRC do pretty well on their budget but as anon 12:32 mentioned the carousel fraud which is costing us billions is still ongoing with very little by way of successful prosecution from the revenue. It is unfortunate that the government decided to combine HM Customs and Excise with the Inland Revenue. I feel this is a retrograde step. Furthermore giving tax collectors a cut of the monies recovered will I fear cause them to be even more despised by the general public than they are at present.

Mr Friday said...

I am sufficiently well-connected to the civil service to stand by all my previous comments.

Re - the comment about the HMRC being so efficient - you obviously missed this gem before xmas:

"...Level of tax credit fraud and error is a 'matter of shame'
Commons Public Accounts Committee criticises Revenue performance"

The level of fraud and error in the tax credit system is a 'matter of shame', the chair of the Commons Public Accounts Committee has said.

In evidence to the Committee yesterday Paul Gray, acting chairman of the Revenue, said his department had been hampered in its efforts to combat errors by lack of information. He told the committee of MPs that figures at his disposal relate to 2003/2004, the first year of tax credit operations, and that the Revenue will not publish figures for even the second year of operation until next spring.

Whilst Mr Gray said he regretted those cases where families were caused hardship, Edward Leigh, the Committee's chairman, said the Revenue's administration of the tax credits system is a disgrace. 'Surely it is a matter of shame that (the Revenue) is reporting to the chancellor, its master, with the worst levels of fraud and error and more than any department in Whitehall', he said.

Anonymous said...

Help, I've been conned by the government for several decades (like so many of us!!). Mr. Friday says I should have a non-contributary pension, but three per cent of my salary keeps disappearing under the heading of superannuation. To whom should I apply for a refund? Seriously though, at least I pay something for my pension, and I cannot claim all kinds of "expenses" for my income tax figures. There are plenty of people who don't pay a penny in tax or NI and still get the old age pension, and I don't mean those who are disabled, carers, bringing up a family at home or have some other valid reason for not paying. On the subject of carousel fraud, to be fair to the government (of whom I am not a great fan at the moment), I think you will find that the stumbling block to stopping this is in the EU rules for VAT payment, which allows these goods to disappear into the country, rather than being able to stop them at our frontier. Jammy Dodger - Birchington

Mr Friday said...

That'll be the same pension that the government contributes up to 26% towards too then ?

Going back to Dr Moores' point, this is just not sustainable with the growth of the public sector. Not even that, even if it were sustainable I don't feel I am getting value for money as a taxpayer as the system is a shambles - and getting worse.

Anonymous said...

WoW1 Nowhere near their contribution to me. PLease tell me which department., I'll transfer immediately. Jammy Dodger - Birchingtom