HMRC accounts qualified for Covid and R&D fraud
HMRC racked up its 17th consecutive audit qualification in the 2020-21 financial year. Alongside the impact of Covid, the department faces new problems containing R&D tax credit fraud, according to the National Audit Office (NAO).
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This will never change.
To be fair, the furlough scheme was set up quickly and became easy to use. The fraud and error implications are a result of our bonkers tax system - which politicians will never reform. Like Topsy, the complexity just grows and grows.
HMRC has (or will become) just a penalty generating organisation, like the police. Dodge the fines, stay in the middle of the shoal, keep your head down, appear 'compliant' and fiddle your taxes away......
Sad, but true?
It's only the NAO quote at the end that has a whiff of truth about it ... whereas Jimboy's statistics are a whole new branch of (undiscovered) mathematics.
What even the NAO don't seem to realise is that when they say “HMRC now needs to identify, measure and recover payments made as a result of erroneous or fraudulent claims ..” this is not merely because it would be nice to see a return of our money where fraudulently claimed.
It is also the last chance saloon for HMRC to regain a reputation for being the guardians of our money, driven by an almost superhuman degree of probity and competence, as they once were.
Once that reputation is lost (which it is teetering on the edge of so doing), they become just a branch of grasping/avaricious officialdom which much of the population regard as 'the enemy' ... and therefore treat outwitting them as a sport to be taught to children. Then there's no way back.
They lost that about 12 years ago. HMRC is a penalty farming business, nothing to do with a professional, efficient tax service. Everything else in my career is miles better and faster than in 1990, the UK tax service is miles more slapdash, miles slower, miles more rubbish than in 1990.
"It is also the last chance saloon for HMRC to regain a reputation for being the guardians of our money, driven by an almost superhuman degree of probity and competence, as they once were."
In those days, individuals were given responsibility and a real reason to do their jobs properly. The modern way, not just in HMRC, is for there to be a type of Joint Responsibility which in reality means that no one is responsible for anything and thus no incentive for people to have any interest in their work, other than the minimum required to get paid.
There is also the unbelievable complexity of the Tax System, which I don't think any one fully understands, and is becoming as effective as a Heath Robinson mouse trap .... it might eventually work but long after the mouse has scarpered.
If only Mr Harra and his colleagues would spend some time getting to know their customers they would discover how different the real world is from the silos which they inhabit.
Various sincere invitations were extended on here to his head of MTD, the very least we should expect is a reason why these invitations were not accepted.
How long would you expect to stay in business if you displayed the arrogance and ignorance prevalent in HMRC?
Who do the auditors act for? 20 years of qualified audit reports should really result in something.
Why is there not enough data there for the auditors to check HMRC's estimates? There are always estimates in large business's accounts, we will still provide an unqualified unmodified opinion if, on reviewing the data, we come to a conclusion that is not materially different to the directors.
Why have the auditors been unable to do so in this case and what is being done about it? Are we just to accept the revenue of the entire nation is being handled by an organisation producing potentially fictional accounts?
17 consequtive audit qualifications
In the real World that would mean insolvency
But the customers have no choice
Harra and his chums are on another planet entirely. HMRC were not fit for purpose before the pandemic. Yes they roll out the furlough scheme, but even that smacked of incompetence. upload 100 employees info, but have to key if it's 99. Who on earth came up with that gem? remember the calculator we were going to have within a week or two of it going live? when it arrived it could only calculate in the most basic of situations that you could do in your head. No, for vast swathes of HMRC I suspect like most other .gov organisations working from home has been akin to an 18 month holiday.
Harra and his chums are on another planet entirely. HMRC were not fit for purpose before the pandemic. Yes they roll out the furlough scheme, but even that smacked of incompetence. upload 100 employees info, but have to key if it's 99. Who on earth came up with that gem? remember the calculator we were going to have within a week or two of it going live? when it arrived it could only calculate in the most basic of situations that you could do in your head. No, for vast swathes of HMRC I suspect like most other .gov organisations working from home has been akin to an 18 month holiday.
This is not going to be a very long thread as quite frankly, what more can you say.
The evidence is that HMRC are incompetent but are in denial about that ........ end of story.