Tuesday, 4 December 2012

Taking the Taxman to Task

OKAY, I’ll admit it – I am one for getting on my soapbox, but I make no excuses for that!
As well as being an accountant who tries to break the dour mould that our profession happily wears like a straitjacket, I like to speak my mind.
I also do not suffer fools gladly and that can come in extremely handy when dealing with cases against HM Revenue & Customs.
This week, at V&A Bell Brown in Holmfirth, we are celebrating a well-earned victory against HMRC. The taxman has seen reason in light of our completely rational case on behalf of a client who had accidentally overpaid their tax by thousands of pounds.
We presented a perfectly rational argument backed up by clear evidence which demolished HMRC’s nonsensical position. The only problem was that the victory was a little hollow given that it took two-and-a-half long years to get the client’s money back!
Why did it take so long, I hear you ask? Well, at first because HMRC denied that there had been an over-payment, despite strong evidence to the contrary.
My guess is that they did not mount a correct and thorough enough investigation into the case until they were “handbagged” (by me, of course!) into doing so.
Even once they’d admitted the overpayment, they refused to repay it until the client proved why it had made the over payment.
Now HMRC plans to make taxpayers legally responsible for checking that the taxman is taking the correct amount of tax.
It’s proposing to change current rules which waive underpayment of income tax if the root causes are delays and mistakes by HMRC officials.
HMRC receives around 166,244 complaints each year in response to demands for underpaid tax (quite a few from V&A Vigar Group!).
HMRC shouldn’t be trying to pass the buck to taxpayers because it’s too complicated for them to manage. Instead politicians should address the root cause of the problem – the needlessly and ridiculously complicated tax system.
A simplified tax system will make it far easier for HMRC to do their job and ensure that all taxpayers pay no more or no less than their fair share.
It will also ensure that cases like the one this week are sorted out in a reasonable time.