What really cheesed off HMRC about Rossminster (to the young ones, the Tax Scheme Sausage Factory of the 70s) was that their own proprietors and employees implemented their own Schemes on the fees they earned (known affectionately as "the Back End"). Even so that did not justify HM Judges conspiring with HMG and the Politburo of HMRC, over lunch and gallons of port at The Athaneum, to subvert the entire legal system, not just tax law, by intoducing into it (i.e. by unconstitutional judicial legislation) a novel form of statutory interpretation. Now called purposive or contextual interpretation, meaning what the judiciary think Parliament ought to have said if they had been as super-intelligent and clubbable as the old Codgers from Eton, Balliol and The Guards. No nasty former solicitors among them, thank you very much.
There is far too much interference by HMG and HMRC in what is a solidly private sector of the service economy. I retired in 2019 because I had had enough of regulation (by my 3 pusillanimous, sychophantic, self-serving "professional" bodies, strong-armed by The Establishment or enticed into their inner sanctum by funny handshakes and the honours list) plus OTT AML and the spiralling cost of compulsory PI cover (despite my never having had a claim in 50 years). I celebrated on Retirement Day by telling all three to insert their qualifications, although hard-earned by me, in their orifice of choice. You cannot take Bermondsey out of The Boy!
The mendacious pretext for this relentless Quango Empire Building and virtue-signalling is always protection of The Public. Any actual interest in the individual members thereof is vestigial, as witness the constant shifting of tax compliance costs from the Exchequer to them and to those decent advisers trying to help them comply, within their limited ability to pay reasonable fees. For example, they may have to pay a fair charge, say, £400 to register a trust on TRS (or pay a penalty of £5000!) which is as far removed from The Targeted Mischief as a Quasar in Outer Space. Like an express trust of £100 held by A and B on a bare trust for A B and C, which is not Excluded. This is comparable to shining a flashlight up the backsides of A B and C in order to verify that no money launderer or sanctions buster is hiding out up there. Xi Jingping would approve of this mass surveillance, without even an reward of compensation by an increased social credit score
Now I am retired I am not eligible to join the Agents' Forum. So my daughter has filed a 64-8 nominating me and saying that we both have a "legitimate expectation" that I will not be discriminated against and forced to consult the HMRC ignoramuses on the Customers' Forum, where a typical answer to a CGT query is, I kid you not,"Please see TCGA 1992".
Who do these arrogant civil servants, WFH (raucous laughter off) and paid by our taxes, actually think they are?
I'm cynical as ever. This is HMRC's mission to do as little work as possible relying on discovery assessments and time limits on claims to pick up later what they miss, above a tolerance threshold with 80:20 probability, with the potential cost further minimised by interest and penalties.
If you do not file a voluntary return on time under s12D TMA you do not get the protection of s29(5) because there was never a return for HMRC to enquire into. Also if you have a tax liability and do not make a voluntary return by October 31 (you will often find that you CANNOT make an online return if you are outside the criteria, unless you tell lies) you will be in default once the deadline has passed. You may well be careless at least in this regard.
HMRC places the onus on the taxpayer to decide whether to send in a return, or to contact them if in doubt. They invite you to check whether you need to send a return. They will already have sent some taxpayers a letter telling them they do not have to file next year based on their last filed return. https://www.gov.uk/check-if-you-need-tax-return has the online tool.
If you use this and answer the questions as having only a State pension, total income under £50,000, interest and dividends under £10,000 EACH, you arrive at https://www.gov.uk/check-if-you-need-tax-return/y/no/no/yes-state-pensio.... You get the confusing message that despite all this "You must tell HMRC if you had:
• more than £2,000 income from share dividends
• between £1,000 and £2,500 in any other untaxed income, such as commission or money from renting out a property".
It will be obvious that a pensioner with only EITHER interest or dividends just above the relevant threshold has a liability. If they have an hour to spare they can ring the Helpline. I don't know what happens then, perhaps HMRC send out a return form. Failure to notify by October 5 involves a penalty (leaflet CCFS11) but worse will be a penalty for failure to file and pay. And a 20 year assessment time limit!
So this is largely a post-event Gotcha AI system with HMRC tempering penalties but not interest as it suits them or not through a reasonable excuse filter. Would you buy a used car from these people?
This collection mechanism reversed the principle of independent taxation of spouses which was introduced in 1990 so that similar such absurdities would be a thing of the past. https://www.taxandthefamily.org/history-article.
It is an example of an abuse of power by Government through unconstitutional overreach. It is a general principle of English law that no citizen is responsible for the debts of another unless by acceptance of the liability e.g. guarantee or because the debtor has transferred property beyond the creditor's reach for no or inadequate consideration.
Question asked in Parliament today at Treasury Questions about penalties where no tax is payable. Govt says "cannot interfere directly" but will look into the matter.
"Commissioners for Revenue and Customs Act 2005
s11 Treasury directions
In the exercise of their functions the Commissioners shall comply with any directions of a general nature given to them by the Treasury."
In today's post there arrived two separate letters advising a UTR for each of two trusts previously as registered as non-taxable. Notification of taxability was given 7 days ago. Some of my letters to HMRC, critical of some of their policies and pearls of wisdom, have not been answered for over 6 months. Many of you tax agents will be familiar with their rather different turnaround time on essential queries. There's none so deaf....! Or cynical.
My answers
What really cheesed off HMRC about Rossminster (to the young ones, the Tax Scheme Sausage Factory of the 70s) was that their own proprietors and employees implemented their own Schemes on the fees they earned (known affectionately as "the Back End"). Even so that did not justify HM Judges conspiring with HMG and the Politburo of HMRC, over lunch and gallons of port at The Athaneum, to subvert the entire legal system, not just tax law, by intoducing into it (i.e. by unconstitutional judicial legislation) a novel form of statutory interpretation. Now called purposive or contextual interpretation, meaning what the judiciary think Parliament ought to have said if they had been as super-intelligent and clubbable as the old Codgers from Eton, Balliol and The Guards. No nasty former solicitors among them, thank you very much.
Harr-umph!
The two rules of Digitisation are:
1 Don't run before you can walk; and
2 Don't do something just because you can
Ye ken the noo, Jimmy. Keep the heid, Laddie, keep the bluddie heid!
There is far too much interference by HMG and HMRC in what is a solidly private sector of the service economy. I retired in 2019 because I had had enough of regulation (by my 3 pusillanimous, sychophantic, self-serving "professional" bodies, strong-armed by The Establishment or enticed into their inner sanctum by funny handshakes and the honours list) plus OTT AML and the spiralling cost of compulsory PI cover (despite my never having had a claim in 50 years). I celebrated on Retirement Day by telling all three to insert their qualifications, although hard-earned by me, in their orifice of choice. You cannot take Bermondsey out of The Boy!
The mendacious pretext for this relentless Quango Empire Building and virtue-signalling is always protection of The Public. Any actual interest in the individual members thereof is vestigial, as witness the constant shifting of tax compliance costs from the Exchequer to them and to those decent advisers trying to help them comply, within their limited ability to pay reasonable fees. For example, they may have to pay a fair charge, say, £400 to register a trust on TRS (or pay a penalty of £5000!) which is as far removed from The Targeted Mischief as a Quasar in Outer Space. Like an express trust of £100 held by A and B on a bare trust for A B and C, which is not Excluded. This is comparable to shining a flashlight up the backsides of A B and C in order to verify that no money launderer or sanctions buster is hiding out up there. Xi Jingping would approve of this mass surveillance, without even an reward of compensation by an increased social credit score
Now I am retired I am not eligible to join the Agents' Forum. So my daughter has filed a 64-8 nominating me and saying that we both have a "legitimate expectation" that I will not be discriminated against and forced to consult the HMRC ignoramuses on the Customers' Forum, where a typical answer to a CGT query is, I kid you not,"Please see TCGA 1992".
Who do these arrogant civil servants, WFH (raucous laughter off) and paid by our taxes, actually think they are?
I'm cynical as ever. This is HMRC's mission to do as little work as possible relying on discovery assessments and time limits on claims to pick up later what they miss, above a tolerance threshold with 80:20 probability, with the potential cost further minimised by interest and penalties.
If you do not file a voluntary return on time under s12D TMA you do not get the protection of s29(5) because there was never a return for HMRC to enquire into. Also if you have a tax liability and do not make a voluntary return by October 31 (you will often find that you CANNOT make an online return if you are outside the criteria, unless you tell lies) you will be in default once the deadline has passed. You may well be careless at least in this regard.
HMRC places the onus on the taxpayer to decide whether to send in a return, or to contact them if in doubt. They invite you to check whether you need to send a return. They will already have sent some taxpayers a letter telling them they do not have to file next year based on their last filed return. https://www.gov.uk/check-if-you-need-tax-return has the online tool.
If you use this and answer the questions as having only a State pension, total income under £50,000, interest and dividends under £10,000 EACH, you arrive at https://www.gov.uk/check-if-you-need-tax-return/y/no/no/yes-state-pensio.... You get the confusing message that despite all this "You must tell HMRC if you had:
• more than £2,000 income from share dividends
• between £1,000 and £2,500 in any other untaxed income, such as commission or money from renting out a property".
It will be obvious that a pensioner with only EITHER interest or dividends just above the relevant threshold has a liability. If they have an hour to spare they can ring the Helpline. I don't know what happens then, perhaps HMRC send out a return form. Failure to notify by October 5 involves a penalty (leaflet CCFS11) but worse will be a penalty for failure to file and pay. And a 20 year assessment time limit!
So this is largely a post-event Gotcha AI system with HMRC tempering penalties but not interest as it suits them or not through a reasonable excuse filter. Would you buy a used car from these people?
MTD= Making Tax Difficult
Cult-brainwashed bureaucrats worshipping at the Throne of the Great God Tech.
Just answer the bloody phone within 5 minutes like all most major financial services providers.
WFH or WTF?
This collection mechanism reversed the principle of independent taxation of spouses which was introduced in 1990 so that similar such absurdities would be a thing of the past. https://www.taxandthefamily.org/history-article.
It is an example of an abuse of power by Government through unconstitutional overreach. It is a general principle of English law that no citizen is responsible for the debts of another unless by acceptance of the liability e.g. guarantee or because the debtor has transferred property beyond the creditor's reach for no or inadequate consideration.
Wait until AI raises the assessments, does the checking, and sends out the Bailiff Robot
Whoever is charged with working this project in HMRC should be immediately redeployed e.g. to answer the phones and online helplines
Question asked in Parliament today at Treasury Questions about penalties where no tax is payable. Govt says "cannot interfere directly" but will look into the matter.
"Commissioners for Revenue and Customs Act 2005
s11 Treasury directions
In the exercise of their functions the Commissioners shall comply with any directions of a general nature given to them by the Treasury."
So Yes they can!
In today's post there arrived two separate letters advising a UTR for each of two trusts previously as registered as non-taxable. Notification of taxability was given 7 days ago. Some of my letters to HMRC, critical of some of their policies and pearls of wisdom, have not been answered for over 6 months. Many of you tax agents will be familiar with their rather different turnaround time on essential queries. There's none so deaf....! Or cynical.