Can anyone take the government's claims seriously when these are the facts?
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Not unless you are a very gullible believer in the claims made for the ability of new technology (ICT) to replace a wide range of human activity, Richard. And the fact (yes, fact) is those claims are almost always and everywhere overstated.
The vendors of such systems, and technologies, who, unsurprisingly, have considerable influence within government and public service – and have had for years – not least because what they say is as smooth as silk to the ears of minister who want/have to make “efficiency” savings, routinely overstate the degree of rationalisation that can be achieved, the efficiencies to be gained, and the time scales for developing and implementing systems through to full use – or all three. IDS is the most recent minister to find out this little ‘truth’.
It would be interesting to know from within HMRC what functions and processes they claim to have replaced or efficiencies gained by the use of new technology (to the degree that it compensates for such drastic downsizing over such a relatively short period of time), as opposed to functions/processes simply abolished or allowed to wither due to the scale and scope of the loss of staff (and thus skills and expertise).
Ivan,
I pretty sure that there are plenty of HMRC staff who would like to let you know all about it’s efficiency savings, but given the recently publicised treatment of Mr Mba its fairly unlikely!
Yes, my sister-in-law is leaving the HMRandC after 25 years – which is all of her working life. And there are some businesses/people who are long overdue a tax investigation. Long, long overdue.
There’s also an issue for us practising accountants.
I share Richard’s view of professional responsibilities as being that of keeping my clients as free of grief from HMRC and Companies House as I possibly can. In turn, that often entails telling clients what they can’t legally do.
I have recently had to tell as client who was forced into a service company by their employer that IR35, with all its expensive consequences, most definitely applied. Ultimately, because another 20+ of this person’s colleagues are handled by an unqualified accountant who chooses to ignore IR35, he has decided to join that group.
I don’t like IR35 because it lets employers do pretty much what they want with their employees (oh, these burdensome employment rights!), leaving the employees to subsidise the previous employer’s NIC. But IR35 remains the law of the land and my clients need to know, and are told, the implications of ignoring this law.
My problem is that HMRC shows no visible sign of giving a toss whether or not this law is complied with, thereby casting me, and those who share my view of this situation, in the role of a Jeremiah prepared to tell clients that they need to pay more tax for fear of the potential consequences.
Of itself, I’m not overly concerned about the situation I’ve described in terms of its impact on me. What does concern me though is that, if HMRC does not or cannot enforce tax law generally, there is very little incentive, beyond professional ethics, for the accounting profession to enforce it for them if it is going to risk its client base by so doing. Indeed, this is perhaps the reason why the Big 4 became so heavily, and in my view unprofessionally, involved in aggressive tax avoidance, ie they decided long ago that tax law was ripe for attack precisely because it has been, and can only continue to be given the continual decline on HMRC’s numbers, so inadequately defended by HMRC.
Nick
If you turned that into a blog I’d publish it as such
Richard
Richard,
Wondered if you’d seen this?
http://forums.icas.org.uk/default.aspx?g=posts&t=76
Have you any questions for Mr Gauke?
Yes
But I may have used them for someone else this week
I’m not sure I actually sent the link last night so here it is again.
Still not coming through…
http://grumpyaccountant.wordpress.com/
I must come across as either incompetent or desperate!
Nick, you’re quite right about IR35. However it is not ignored by unqualified accountants alone! I think it is quite widely known that HMRC simply don’t have the resources to enforce IR35. This is time consuming work for HMRC not only obtaining and reviewing evidence, but also considering the case law.
Probably also relevant that the likely tax recovery of such a case will be very low. At a time oflimited resources one might assume they had bigger fish to fry than a lone IT contractor who had probably saved 10 or 20k of tax
Cases are brought to create systemic change
I would imagine that it is pretty well known that HMRC don’t have the resources to enforce lots of things, not just IR35!
Computers and IR35? The basic idea of looking into small businesses and incomplete records cannot be ignored. That will take skilled human beings trained in such a task.
The problem is that each year we seem to manage to reach or exceed our targets for additional liability identifed even with less staff – so HMRC congratulates itself for this and tells the government that because of this we do not need to increase staff.
However given that on average each tax case worker in business and self assessment investigations brings in at least around 10 times the cost of employing them how much more could we identify if we had more staff ?