HMRC practice: Taking liberties

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Wendy Bradley is concerned that HMRC is going beyond its remit in demanding more information than the law requires taxpayers to submit.

Where to begin

Let us start with the legislation which gives HMRC the power to compel us to make tax returns: "a return of … income, computed in accordance with the Income Tax Acts and specifying each separate source of income and the amount from each source." (TMA 1970, s 8).

I want to know: How do we get from being required to return our income to being required to tell HMRC the sort code and account number of our bank accounts?

Filing online

I completed my SA tax return for 2016/17 online and I was not due a tax rebate. But I found a stumbling block to submitting my return on the page concerning overpaid tax. I could not progress beyond this page without either letting HMRC have my bank account details or making an incorrect return by claiming not to have a bank account at all.

As Rebecca Cave has pointed out, there is no independent oversight of HMRC's software and its compliance with the legislation, and this is one section of the electronic SA return that I would like to see reviewed. I believe it represents a civil liberties infringement: the SA return can’t be completed without complying with a request (for a bank account number), which, arguably, HMRC have no right to make.

Here is the screen to be completed: 

HMRC self assessment screenshot

This is what happens if you try to short-circuit the process by pressing "send" without completing either your bank details or the incorrect statement that you do not have one: 

hmrc self assessment screenshot


Minor irritation

You could argue that this is a relatively minor infringement of my civil liberties. Giving an organisation the name, sort code and number of your bank account does not allow them access to the information about the contents of this account, let alone to any money it might contain.

Yet in a world where we are perpetually told to be wary of online fraudsters trying to glean our bank details, it seems bizarre that HMRC acts in this way. My point is that HMRC should not be compelling us to hand over information that it has no statutory right to acquire.

GDPR effect

When the GDPR comes into force on 25 May, will HMRC need to review its actions? The guidance from the ICO is clear that the potential to exempt "taxation matters" from the transparency obligations and individual rights guaranteed by the regulation exists, but only if this exemption "respects the essence of the individual’s fundamental rights and freedoms and is a necessary and proportionate measure in a democratic society".

Do we accept that HMRC can harvest our bank details via their software design, rather than by a statutory power given through legislation? I have given HMRC my bank details before when I was expecting a repayment; where's the harm in handing them over again?

This is an "if you have nothing to hide you have nothing to fear" argument: the state does not have an untrammelled right to collect information about us without oversight.

Voice prints

Do we also accept that HMRC may make a voiceprint from our telephone conversations with the department, and use that voice print to identify us in the future?

This is not science fiction: this is already happening. For the past year, HMRC has been offering people who ring the tax credits and SA helplines the opportunity to record their voice and have their voiceprint used to identify them in future. This sounds like a whizzy customer service initiative when it is described as:

"HMRC will be encouraging customers who call to take advantage of the Voice ID service, but they can choose to opt-out and continue to use HMRC’s services in the usual way if they prefer".

But I challenge this statement.

When I found myself in the automated system and was asked to repeat the phrase to be recorded, I could not identify a means to refuse to give consent or to opt out, or indeed any explanation that I could deny consent. I was reduced to repeating "no!" instead of the requested phrase until the automated system, more in sorrow than in anger, explained that it couldn't complete the transaction, but I would be offered the opportunity the next time I rang.

Data protection

HMRC has recently published its policy regarding the data protection legislation, but will it be in compliance when the legislation is updated?

I hope HMRC's entry in the ICO's data protection register has been compiled from a drop-down menu with limited options, or else how do you explain it describing its core activity as "general business"? When HMRC updates its ICO entry by May 2018 to comply with the GDPR regime, I hope it will have someone on its staff who understands the concept of consent.

Protection v liberty

HMRC has, rightly, powerful tools at its disposal to identify and combat tax fraud and protect the public purse. It needs to understand that equally this does not give it the right to take liberties with the rights of the vast majority of ordinary taxpayers.

Should we all make individual subject aspect requests for sight of the data HMRC holds on us, and then ask for it to be deleted? 

About Wendy Bradley

Wendy Bradley is a retired tax inspector, now working as a freelance journalist.

Replies

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02nd Mar 2018 19:30

You should have printed out those pages and then sent them with a paper return. No FTT would uphold a late filing penalty in such circumstances. HMRC is behaving disgracefully here.

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By kaff
03rd Mar 2018 15:37

I can't find myself getting exercised about this. I've spent the last 35-odd years giving my bank account number and sort code to all and sundry, as my bank has helpfully printed those details on my cheques. So far nobody's managed to use them to empty my bank account or commit any other fraud against me. And it's quite helpful if HMRC can repay me direct into my bank account.

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03rd Mar 2018 19:14

No bank account details a problem? really?

I always tick that box when I know no refund is due for myself or any of my clients.
There are bigger problems to have than to fret over that one.

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By NH
05th Mar 2018 07:22

What makes you think HMRC could not get that information if they wanted to anyway?

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By chatman
to NH
05th Mar 2018 10:32

Why make it even easier for them?

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to NH
05th Mar 2018 21:41

Really? HMRC is in such total disarray, I'm surprised they even know their own bank account details.

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05th Mar 2018 09:51

If I had concerns I would use one of my many Building Society accounts that has a couple of quid in it.

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By birdman
05th Mar 2018 10:41

On the page before the one you've shown a screenshot of, it asks if you want a repayment to you or someone else (eg your agent). If you'd simply ignored that question the page you couldn't get past wouldn't have appeared so you wouldn't have had to provide your bank details. Nothing sinister here! Apologies for double negatives.

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to birdman
05th Mar 2018 13:23

You can't ignore the question, the system demands you either give your bank details or those of your agent. It is a real pain when completing the form on someone else's behalf as if you need to know their bank details, but if you know they aren't due a repayment you would have no reason to ask for this information.

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By birdman
to AndrewTall
05th Mar 2018 13:27

AndrewTall wrote:

You can't ignore the question, the system demands you either give your bank details or those of your agent. It is a real pain when completing the form on someone else's behalf as if you need to know their bank details, but if you know they aren't due a repayment you would have no reason to ask for this information.

No it doesn't. I have filed numerous Returns via HMRC website (maybe 200+ for 2017) and only entered bank details when a repayment arose, on about 20 occasions. It really does depend on your answer to the preceding question.

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to AndrewTall
05th Mar 2018 18:38

Birdman is absolutely right. If you do not complete the previous page, the page with bank details does not appear or does not have to be completed.
I have just checked the copy of my tax return prepared online on HMRC system and the page is blank.

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By SXGuy
05th Mar 2018 10:47

Or use software which doesn't require input of either bank details or a box ticked when no repayment is due?

So are you basically saying that because of a really badly worded option to choose to be repaid by cheque you are forced to disclose your bank details? Come on. I bet you have told a white lie once or twice in your life.

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By tedbuck
05th Mar 2018 11:45

Am I missing something or did HMRC not take powers a while back, or at least talk about it,to take money from recalcitrant taxpayers accounts. That is the purpose behind it I suspect. Ok if you think HMRC always gets it right but in my experience that is far from the truth. I am 100% with your writer. Give them an inch and they'll take your money.
A trustworthy organisation? Not in my book. And also very time costly to get your money back.

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to tedbuck
05th Mar 2018 11:57

You're clearly wrong, if they were deliberately harvesting bank details for this purpose then the API given to third party developers would make bank information compulsory as well., which it doesn't, as has already been said in the comments.

This is just a badly coded form which in itself is something of a disgrace but not a reason to break out the tinfoil hats.

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By tedbuck
05th Mar 2018 11:45

Am I missing something or did HMRC not take powers a while back, or at least talk about it,to take money from recalcitrant taxpayers accounts. That is the purpose behind it I suspect. Ok if you think HMRC always gets it right but in my experience that is far from the truth. I am 100% with your writer. Give them an inch and they'll take your money.
A trustworthy organisation? Not in my book. And also very time costly to get your money back.

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05th Mar 2018 13:31

There is a similar issue with CT returns where you have to say if the company is a member of an LLP or not.

A while back Keith Gordon noted that HMRC were asking questions relating to IR35 in the return which were strictly not required in law.

The problem that I find with bank details is when HMRC issue a repayment in error. If HMRC don't have your bank details they have to issue a bank giro, which can be returned unbanked to retain the original payment date. If you provide HMRC with the bank account details then the payment is made directly to your bank (which HMRC have told me saves them about 90% of the transaction cost), and you then have all sorts of fun returning the payment 'unbanked' to retain the original payment date.

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05th Mar 2018 15:25

This situation does not arise when HMRC's software is accessed by an authorised agent. The overpaid tax page is very similar but has an option button directing the repayment to be made to yourself or a nominee, either choice requiring the input of bank details. However, if the button is left at its 'Please select' default option then the tax return completion proceeds without the need for the offending bank details to be entered at all. To solve Wendy's situation simply requires HMRC to put an equivalent selection button into the window where a taxpayer is preparing a DIY return from their own tax account.

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05th Mar 2018 22:06

Chance are they will already know our bank account details anyway, this has certainly been the case when RBS volunteered info from my account of an interest payment I received in a previous tax year, the tax was deducted at source, now I’m battling with HMRC over late penalty fines which are now getting ridiculous. Not to mention repetitive phone calls to the revenue. Almost two years down the line and still at it!!. Grrrr.

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09th Mar 2018 13:51

I have complained about the bank detail page of HMRC's tax return software to HMRC. HMRC's software is inefficient and should only ask for the bank details after the calculation has revealed there is a refund. There are many other aspects that I don't like for example GOV.UK knows my name because it prints it at the top of the screen but when I start filling in the tax return it puts both my initials in the first name box and doesn't put my full name anywhere. Another example? It asks me if the income of myself or my partner is over £50,000 (for HICB purposes) but why not wait until the calculation is done when it will know exactly what my income is and only needs to ask about my partner if my income is less than £60,000 and my partners is more.

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