HMRC postal cuts bypass advisers

As part of its drive to cut costs HMRC will stop issuing copy letters to tax agents of P2 PAYE coding notices, P800 tax calculations and a collection of Self Assessment notices.

"We hope that agents will understand our decision to withdraw these communications. We estimate... that we will save in the region of £1.25m by discontinuing the issue of agents' copies of Forms P2 and P800 alone," the department said in a briefing note sent to agents on Monday 6 September.

While withdrawing agent copies of some notices, HMRC will include a new statement on the letters advising taxpayers that the form should be shown to their agent or adviser. The notices affected include:

  • P2 PAYE Coding Notices to be dropped from December 2010
  • P800 Tax Calculation (August/September 2010)    
  • P810 targeted review form (already dropped in April)
  • SA 250 advising tax payer of UTR and need to file a return and SA 251 Letter advising that tax returns will no longer need to be completed (both October 2010)
  • SA 252 Letter for those who don't submit a tax return but are liable to higher rate (September 2010, but already dropped since April)

The CIOT published the HMRC message on its website and immediately raised a series of concerns. While appreciating and supporting the need to cut government spending, the CIOT warned that the move was a false economy.

AccountingWEB.co.uk members responded in much the same tone. ADCWebb suggested that HMRC could lodge electronic copies of P2s and P800s (as a minimum) against the client record on the Agent log-page, in the same way as statements of account are recorded.

If you would like to formally participate in providing constructive feedback to HMRC on postal communications and other agent issues, there is a facility to do so in AccountingWEB's Working Together eGroup.

Continued...

» Register now

The full article is available to registered AccountingWEB members only. To read the rest of this article you’ll need to login or register.

Registration is FREE and allows you to view all content, ask questions, comment and much more.

Comments
should_be_working's picture

Short sighted

should_be_working | | Permalink

What's the betting that, when this cut goes through, any move to put the P2s, etc, online will be seen as a new additional cost and won't see the light of day for a good while?

HMRC discontinuing paper notices

bfacey | | Permalink

Personally I throw all HMRC notices straight in the bin when I get them.  It's junk mail in my opinion and it frustrates me.  Everything online, online, online please

PAYE Codes

hzwells | | Permalink

Finally our lives were made easier when HMRC copied us in with the PAYE Codes and NOW they're taking them away again!  They need to make them accessible online.

Envelopes sometimes don't even get opened!

Helen Crowley | | Permalink

Could HMRC print somwhere on the front of all envelopes containing these notices something along the lines of "If you have an Agent, they HAVE NOT been sent a copy of this letter". That may help until we can access all of this information online. There was a similar outcry when HMRC stopped sending us copies of Self Assessment Statements of Account but it's no longer an issue because we can view them online instead....

mydoghasfleas's picture

Short sighted

mydoghasfleas | | Permalink

I agree with short sighted.

The amount involved here is really small, compared to cost over runs on its software and the money wasted on the "our vision" nonsense.  HMRC should not have visions, it should deal with the care and management of the exchequer. 

If HMRC really wanted to save money, the Board's specification should have included for the new system a sub routine to produce the agent copies is a single run and send the notices to the agent in one envelope rather than paying postage on each form. 

I am not as optimistic as short sighted, I doubt HMRC even thought about getting these notices.  The planning is like a dysnumeric doing dot to dot puzzles.

 

False Economy

The Black Knight | | Permalink

Anthony Thomas is quite correct !

It would be more cost effective to try and get these statements correct thus avoiding sending out three or four attempts and the costs of putting these errors right.

These persistent Paye errors are not cost effective for any of us and HMRC attitudes and action seem to be based on a need to be awkward.

I suspect on some clients we will not discover problems, that could have been easily resolved until the phone call regarding the Baliff on the door step, collecting an amount which is not due.

HMRC does not like us questioning their calculations (very often wrong) or estimated (fictitious !) underpayments, and really needs to import some ethical standards.

Cost cutting

PhilipJG | | Permalink

Yet another badly-thought-out quick fix.  Save a few bob on postage today - tomorrow there aren't enough bodies to deal with all the resulting queries.  What muppet makes these decisions?

Only send them to agents

Batty Girl | | Permalink

If only one copies going out it would surely be better to only have all this stuff sent to the agent.  Most of my clients really don't want to see anything from HMRC as they assume that I will see it and deal with it, so why not put something on the letter containing the code for the agent registration to say by authorising the agent you agree that correspondence from HMRC will now be sent to them not you.

This will save the money spent on not sending out two sopies and also save the money they are going to be spending on answering masses of calls from agents who haven't got the info they need.

I'd actually love to see it all electronically and not get paper copies, but in reality I image that's some time away and this might be easier to impliment short term.

BG

Nick Graves's picture

Cost of MRI scanning?

Nick Graves | | Permalink

A bit like the controversy over obesity operations, maybe MRI scanning the higher echelons of HMRC for signs of a brain would prove cost-effective?

Or simply allowing taxpayers or their agents to choose their own code, which would doubtless prove no less accurate.

 

 

 

mydoghasfleas's picture

HMRC and envelopes

mydoghasfleas | | Permalink

I have just seen Helen's comment. 

A couple of years ago a client sent me a letter purportedly from HMRC Shipley, it needed a reply, so I called the number on the letter.  I went through to someone who denied any knowledge of the letter and was assured that the telephone number on the letter was nothing to do with what I was calling about.  I was referred to a different number at Cumbernauld but it was only the commitment of the member of staff that tracked that number down for me.

I rang Cumbernauld, and found it had sent the letter using old stock paper.  I asked how the hell can it do that and expect anyone to get through to them without calling Shipley.  The response was that they had overprinted the envelope saying to call the Shipley number.  This leads to issues regarding the envelope suggestion -

1 Who reads what is on the envelope?  Certainly not the client.  It is a bit like licking the wrapper to see what the chocolate tastes like.

2 Did HMRC think it was saving money by using old stationery when it was incurring the additional cost of overprinting envelopes and having staff waste time trying to find out who in the department sent the letter?

3 If HMRC got the coding notices right at first attempt more often, it would probably save far more than the risible amount in this exercise.  I sorry, I forgot, the last attempt has just cost £380,000,000.

Nice to see that the HMRC website still says it will issue P2s to agents not a mention of "not for much longer"

 

jline199's picture

I agree, onlne please!

jline199 | | Permalink

To just cut agents out of the loop is is simply foolish. But to stop sending out papers copies to agents makes sense, but those paper copies to agents MUST be replaced by an online facility, so that agents can view online what has been sent to clients on paper.

John Line

What about coding errors?

rainbow | | Permalink

Can someone just remind me (and more importantly HMRC) how many letters they are issuing this week as a result of coding and PAYE errors?   And they talk about saving costs!!

Anne Marie Sewell's picture

Inland Revenue cost cutting

Anne Marie Sewell | | Permalink

What an absolute disaster of a decision. Agreed, clients do not understand tax notices - that's if they do open the letters. Clients pay us to take that worry and administration away from them.

First point, almost all PAYE notices are incorrect but taxpayers still tend to believe HMRC can do no wrong therefore they don't even think they might need checking. If HMRC could get its house in order, maybe this would not be so bad  but will they? Now even people with agents will have their PAYE calculated incorrectly, not just the ones without agents.

Secondly, yes, why not send the notices to agents rather than the clients. Or at least give us internet access. 

Is this not yet another step to trying to cut agents out of the look completely? After all, we save people tax - we get the interpretation and calculations right when HMCR really cannot manage that. So is it that agents are just not wanted at all?

 

 

Annetax's picture

Agents - out of the loop?

Annetax | | Permalink

This will not save money in the long run. It is a recipe for more confusion and work for both Agents/HMRC plus stress for clients in the meantime!

1) Clients already assume we get copies of everything - after all, we are their agents, that's why they appoint us isn't it? I would guesstimate 80% of our clients do not send us HMRC correspondence, as they believe we receive it already - many are surprised we don't.

2) In view of earlier/ongoing issues with PAYE codes, there is all the more reason for agents to monitor what PAYE codes are being issued/used. These should not be withdrawn until online copies are available to agents.

3) We don't receive calculations routinely but have had to request them on a number of occasions where the Revenue demand amounts different to our own computations. These should not be withdrawn until online copies are available.

4) The withdrawal of the twice yearly statement of account was a loss as it was useful for monitoring purposes, without having to trawl through the our whole client list one at a time. But at least we can access the clients personal statements of account online.

Anyone spot the pattern? ONLINE ACCESS FOR AGENTS BEFORE THESE ARE WITHDRAWN!

 

 

 

HMRC POSTAL CUTS

Michele Shapland | | Permalink

This is absolutely rediculous, short sighted, false economy etc... May be they should sack the people who come up with these stupid ideas. If it was not for advisers checking PAYE notices of coding, self assessment notices etc.. there would be a lot more errors and a lot more taxpayers who would have not paid enough or paid too much tax in my opinion and it would cost a lot more to put it right to both the taxpayers and the exchequer.

It is about time someone with a brain took over the running of HMRC but with all the cost cutting it seems to me that they are employing a bunch of incompetents.. What ever next they will come up with? An estimated tax demands for all taxpayers based on what they think everyone should pay and then it is up to the taxpayer to prove it is incorrect???

I really despair more and more of where HMRC is going...

HMRC

FEDERICOONE | | Permalink

Should of thought of it before voting this current corrupt Government back in May 2010

Cameron's a fraud. "Blair Mark II"

 

 

 

 

Amazing

0098087 | | Permalink

So, they want to reduce errors in the PAYE system but they won't give us coding notices. So there will be more errors. Astonishing, truly astonishing. How are we supposed to operate PAYE, or is there way of getting there new system in by the back door which will be riddled with problems. 

Good idea

Jekyll and Hyde | | Permalink

I think this is a good idea. Now agents can now have excuses why they are unable to operate the PAYE system correctly and get their clients out of the penalty regime. Simply put, it appears that 25% of all HMRC is currently undelivered. If the client nor the agent get the notices/tax calculations/UTR reference letters, then HMRC cannot issue the penalties.

Simply put, this will only make the tax system harder to work within. Its not as if you can pick up the phone and speak to HMRC, majority of the tiem you cannot get through.

I woudl urge HMRC not to send emails to replace legal post. With all the reported internet fraud form HMRC, we now currently now to ignore email correspondance from HMRC. If emails are the way forward, then more fraud will happen as a result.

Discontuining Paper Notices

barbara whale | | Permalink

Online is fine if you are on broadband but those of us still on dial up or broadband that is so slow it might as well be dial up are being disenfranchised

What no more P2s?

Taxbod | | Permalink

We need to be able to Email HMRC and see such communications ONLINE.

 

 

Academic

The Black Knight | | Permalink

It may all be academic as it seems we are to be cut out of the loop anyway as proposed in the consultation discussion paper on improving the operation of PAYE.

Closing date for comments 23 September 2010

HMRC are proposing not only realtime information (ok) but taking over the whole payment of wages and deduction of tax (including calculations) .

No more payroll bureaux !! may be a blessing, but think of the problems preparing your accounts when HMRC won't give you the data. and how you will ever get to the bottom of a payroll error , (soon to be a forgotten skill !)

All those that have not replied , read the document available on HMRC website and reply !!!

carnmores's picture

am i missing something

carnmores | | Permalink

how could anybody with an agent possibly be paying the wrong amount of tax , especially with all the software we have

Out of the Loop

vinylnobbynobbs | | Permalink

HMR&C have written to companies who they deem as being "large and complex" advising them to ring HMR&C durect when they cannot resolve tax issues with their agaent.  Is this now another way that HMR&C are getting the agents out of the loop?  Will "customers" be urged to (try) and call HMR&C direct to discuss their tax affairs?

For years I have explained to my client's that there is no need to send me any copies of codings from HMR&C as we (usually) get copies.  Now I have to begin again.

If we wrote directly and asked for this information, surely HMR&C are obliged to give it?

peterlashmar's picture

HMRC to save money

peterlashmar | | Permalink

What a complete shambles!!

OK - so HMRC wants to save money, how about?

1- getting PAYE codes correct before sending out any forms P2

2- if an agent is appointed why does the taxpayer need one?

3- if an agent is appointed who has registered on-line then why not send PAYE codes on-line ONLY - no need for any paper forms then.

4- only issuing PAYE codes for current employments. We have received copies of forms P2 2010/11 in respect of client's employments which ceased many years ago.

5- sending agent's copies together in one envelope. We have received multiple forms P2 for the same client in different envelopes on the same day from the same tax office.

Thats just 5 points that occur to me now.

We are trying to persuade HMRC to issue a "DO" code for one client's pension which they refuse to do becasue they think he will end up paying too much tax!! Our client does not want a large tax bill to pay under SA and the pension administrator will ony apply a PAYE code issued by HMRC .

The newspapers do not know anything of the real  extent of the actual shambles that HMRC's PAYE administration is in.

 

 

 

Penny pinching incompetents

Bill A | | Permalink

HMR&C have massively proved themselves incapable of issuing correct coding notices. If they now intend not to copy agents in the poor taxpayers are going to suffer even more at the hands of the uncaring and largely incompetent Revenue. Time to publish the names and pucbicly pillory those responsible at HMRC for the massive software and personnel failings.

 

HMRC A brain dead Brontosaurus?

Niallaslen | | Permalink

Thank goodness I am retiring in six months time. I liken the present day HMTC to that of a brain dead brontosaurus blundering aimlessly through the Jurassic jungle looking for its lost brain cell.  Things can only get worse and the stress of dealing with the increasingly complex and often inane compliance legislation actually brought on a heart attack last year which needed a triple bypass operation.  That is why I am retiring so that I can get a life instead of doing HRMC's work for them.

 

Niall Aslen

Chawlaaandco's picture

Every thing has good and bad affects.

Chawlaaandco | | Permalink

This is well known that every thing has its positive and negative affects but the most important thing is that which affect is going to effect the present state more. Like if HMRC stop issuing copy letters to tax agents then how does this decision affect present sate of communication. According to me, HMRC can communicate with agents through Emails as its more easily and cheaper than post.

billgilcom's picture

One HMRC defence to getting it wrong gone?

billgilcom | | Permalink

OK in two years time when  they issue the next batch of Revenue Error assessments they won't be able to get out of ESC A19 by pointing out that the taxpayer has an agent and therefore they shouldn't have had the belief that their tax affairs were in order..... another shambles and short sighted penny pinching that misses the spot.

 

Yes give us direct real time emails with the people on the coal face that sometimes actually know what they are doing

bill@wamstaxltd.com 

HMRC Postal Cuts

Lady Ann | | Permalink

--I'm horrified by the decision to cease informing agents of P2s etc.. It seems like a cunning plot to increase penalties by relying on the inefficiency of taxpayers, which in many cases such as the elderly is not deliberate.

I had a case only last week of a new client whose P2 revealed transferred blind person's allowance for his wife. Without this I would have not known of the allowance in completing his SA Return (well, do you ask every new client if they or their partner/spouse is blind?).  However, this was compounded by the fact that for 2009/10 his P2 revealed that he had been given double the allowance. Of course it says on the P2 that the taxpayer is responsible for checking it but presumably the taxpayer is supposed to know the amount of the allowances as these are not shown, well, not the BPA rate anyway. HMRC's reaction was, well he'll perhaps be given time to pay the underpaid tax - not if I have anything to do with it as it was blatantly ehir error - a letter to an MP copied to HMRC usually does the trick.

Similarly with notifications of UTRs. Many clients lose these - as they do the agent authority authorisation number notice. Bad enough no longer receiving copy statements, which were invaluable just before the January payments were due.

HMRC is falling apart and it's the taxpayer and the agent who are being made to suffer. And I fear also those at comparatively lower levels who are bearing the wrath of those whose affairs have been messed up. Wouldn't a good cost cutting exercise be to increase efficiency of the service,  to cut expenditure by reducing salaries of those at the very top who are sitting back and telling the cannon fodder that the new PAYE system is working perfectly, and to raise the morale of the staff at the lower levels whose pay has been capped?

Lady Ann

Constantly Confused's picture

Agent area

Constantly Confused | | Permalink

Why not just add the coding notices and calcs to the agent area on the HMRC site, the same as we can access statements?

I can't see how that would be hard for them to do and it would mean we had access but they saved on stamps.

HMRC postal communications

dpeart195 | | Permalink

Received a late payment penalty warning with no address, telephone number or any means of making contact on the notice.   When eventually after twenty minutes I spoke to someone at HMRC, I was told quite forcibly that our client was liable to a late penalty warning for paying his July PAYE and NIC too early (he was on holiday in August and transferred the sum due before he left).

I have asked how a penalty will be calculated should he transgress again by paying early. 

Has anyone else been treated to mail that has no contact details - or a late payment notice for daring to pay a liability too soon? 

 

 

Euan MacLennan's picture

P2 & P800

Euan MacLennan | | Permalink

P2 Coding Notice:

There is a system already in existence, which works well, for notifying employers or their PAYE agents of the employer's P6 PAYE coding notice.  HMRC sends the employer/agent an e-mail saying "you have one or more notices" and you then download the notices using PAYE Desktop Viewer - a utility provided free by HMRC.  Surely, it would not be too difficult to set up a parallel sytem to send P6 PAYE coding notices to SA agents.

P800 Calculation:

I agree that this should be accessible on the client's pages of SA Online.

agents and notices

davidfhill | | Permalink

HMRC showing their true colours

 

nothing these people do is well thougth out

 

the taxpayer will now get the codes and assume the accountant knows all about it

 

In any case my recent experience is that the success rste with codes is lowe than ever 

HMRC withdraw copy notices to Agents

Sue.suewickham | | Permalink

If the tax office wants Taxpayers and their Agents to provide correct tax information within the required timescales, the least the tax office can do is to ensure that both the Taxpayers and their Agents receive the necessary information from the tax office!

The onus is on the tax office to find a way that will make this work. Emails can be cheaper than post, but it will be necessary to find a secure way to transmit personal information.

jline199's picture

Tax Credits for clients

jline199 | | Permalink

Against the background of the subject of this topic I was particularly unimpressed to read, as regards dealing with Tax Credits issues on behalf of clients that :-

You must use paper form 64-8 for all tax credits authorisation requests. At this time, you can’t use the online authorisation process for tax credits.

-: thereby forcing agents to use the postal system. It seems like one rule for HMRC when trying to save postage, but quite another when assisting agents to cut down on their postage bills.

Personally I always tend to use the online authorisation method for new clients, rather than a paper 64-8 form. It seems to work well and efficiently, so not being able to use that route for Tax Credits issues is a particular pain.