Why it’s a good idea to look at the accounts

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For part of this week, I spent a few hours going back over HMRC’s annual accounts for 2009-10. It’s an activity that is core to your job and mine, but the demands on our time are such that it’s not always that easy to do. In this instance, I hit pay dirt – not in the 130-odd pages of accounts, but in the 47-page Comptroller and Auditor General’s report that accompanied them.

Credit goes to UHY Hacker Young’s Rob Durrant-Walker for raising the alarm about £238m of PAYE overpayment errors (a 148% increase on the previous year), but what neither he nor the scores of journalists who followed up the story bothered to report was that the figure was just a drop in the £4.4bn ocean of processing errors that go back for many, many years.

All of this is documented in some detail in the NAO’s report. Then there are the unresolved Tax Credit errors amounting to somewhere in the region of £2bn that resulted in a qualified opinion on the tax credits expenditure reported in the 2009-10 Trust Statement, and the department’s tortured attempts to improve the recovery of its Tax Credit debts.

One feature of this story concerned the new government’s decision not to publish a full annual report for HMRC this year. It argued that a glossy report was an unnecessary cost, particularly since all the designated targets and objectives were rendered irrelevant by the election result in May. A chorus of voices including the CIOT’s John Whiting, Grant Thornton’s Mike Warburton and PKF’s John Cassidy all complained to The Observer that the annual report contained important information for departmental transparency in areas such as inquiries and complaints, taxpayer prosecutions and staffing issues. “Scrapping the annual report means we have lost an awful lot of detail about the organisation's direction and where it is focusing its efforts,” said Cassidy.

The three wise tax men have a point. But what this week has taught me is that even the trimmed-down accounts have a lot to say. But is anybody besides the gurus bothering to read them? I’m off on holiday this weekend and am planning to take HMRC 2009-10 accounts (2.7MB PDF) in place of my usual pot-boiler. I wonder if I’ll uncover more hair-raising twists within those pages?

About John Stokdyk

John Stokdyk, AccountingWEB head of insight

AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.

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By ianw33
22nd Aug 2010 20:51

How Unfortunate

Resource Accounts and Trust Statement and NAO Report 2009-10
HMRC
14.00

Normal

false
false
false

EN-GB
X-NONE
X-NONE

We told that HMRC was willing to pay Mr Deepak Singh £149,500 for just 3 months work via his own limited company, Orwell Consulting Ltd.

 

 A search at Companies House reveals that this company was dissolved on 24 March 2009. Presumably, payments were made to Orwell Consulting Limited, a completely different company, incorporated in May 2009.

 

I realise that this is a rather pedantic point, but it just goes to show that even fundamental errors can arise in HMRC accounts – no such margin for error on this side of the fence eh!

 

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