Save content
Have you found this content useful? Use the button above to save it to your profile.
Tardy HMRC guidance throws sand in tax’s gears | sand in gears | accountingweb
iStock_lermannika_sand_in_gears

Tardy HMRC guidance throws sand in tax’s gears

by

The late or non-arrival of HMRC guidance is a constant frustration for tax advisers, and increasingly this information vacuum is filled by publications on the professional bodies’ websites. Rebecca Cave asks why is this happening.

30th Aug 2022
Save content
Have you found this content useful? Use the button above to save it to your profile.

UK tax law is complicated, and different interpretations are possible, as illustrated by the opposing views of the Institute of Chartered Accountants in England and Wales (ICAEW) Tax Faculty and HMRC on the tax treatment of charging electric company cars

HMRC’s view of the tax law and practice is expressed in the HMRC manuals. These are written for HMRC staff, and are now available for anyone to read online, subject to redactions under the Freedom of Information Act. Prior to around 1995 the HMRC manuals were not available to anyone outside of the tax department.

However, navigating the tax system requires more than a good knowledge of tax law. Tax advisers also need to understand the systems that HMRC impose to collect tax data, how and when tax payments must be made, what penalties can apply and how to appeal against them. Some of the law governing these functions is set out in the Taxes Management Act 1970 (TMA 1970), but much is scattered in regulations and schedules to other Acts.

Register for free to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:


Content lock down, tick icon

View all AccountingWEB content


Content lock down, tick icon

Comment on articles


Content lock down, tick icon

Watch our digital shows and more

Access content now

Already have an account?

Replies (18)

Please login or register to join the discussion.

avatar
By Hugo Fair
30th Aug 2022 17:00

"I was not impressed." Best review I've read so far of the (laughingly mis-titled) new Guidance.

It's more like copy'n'pasting all my paperwork generated by garages who were servicing my car over the last 5 years ... and calling the result an engineer's Guide to Car Maintenance.

Thanks (12)
Tornado
By Tornado
31st Aug 2022 10:42

"Tax administration should not be a game of cat and mouse between HMRC, GDS and the tax profession. These organisations should work together to make the tax system run as smoothly as possible and enable taxpayers to easily pay the right amount of tax at the right time.

Putting barriers in the way of publishing necessary guidance in a timely manner, and designing systems that cut out tax agents, throws sand into the gears of an already creaking machine."

This statement says it all, but just a dream I fear.

Thanks (11)
avatar
By Winnie Wiggleroom
31st Aug 2022 13:06

As I have said many times on here, and I mean this as no exaggeration, almost all of the problems with the tax system could be solved by a meaningful engagement with the agent community right the way through the process from your step 2 onwards. If that was done with both sides being willing to listen and implement suggestions the whole system would become efficient.

A typical agent will deal with almost all aspects of the system during a given year, both technically and practically, dealing with both Mr & Mrs public and HMRC.

It's really not complicated, take the 30/60 day CGT farce for example - as soon as the idea was mooted, asking for (and implementing) of agent feedback would have made the system actually work efficiently, agents would have been on board from the start as they would have helped design the system.

Thanks (7)
avatar
By Gerry Brown
02nd Sep 2022 09:22

A great article. A copy should be sent to every MP.

Thanks (6)
Replying to Gerry Brown:
Morph
By kevinringer
02nd Sep 2022 09:33

And HMRC.

Thanks (3)
Replying to Gerry Brown:
avatar
By johnjenkins
02nd Sep 2022 09:34

Who will do sweet FA.

Thanks (3)
avatar
By snickersinatwix
02nd Sep 2022 09:52

Last week I received a reply from HMRC self assessment department to a letter I sent on 19 August 2021!!!!! SO over a YEAR later.
And even then they totally disregarded what I said in the letter, said I had provided the wrong info and would need to do it again.

So half an hour on the phone and they agreed we had sent the correct info and it would be reopened. We can expect a reply within 12 weeks apparently.

So I say it again. GET YOUR OWN HOUSE IN ORDER HMRC BEFORE YOU BRING IN THESE HUGE CHANGES WHICH WILL CAUSE MANY CLIENTS ADDITIONAL UNNECESSARY COSTS AND ADMIN.

And yes I am cross.

Thanks (8)
avatar
By AndrewV12
02nd Sep 2022 10:01

"However, navigating the tax system requires more than a good knowledge of tax law. "

That's putting it mildly

Thanks (1)
Replying to AndrewV12:
Morph
By kevinringer
02nd Sep 2022 10:12

Tax law doesn't enter into it, the "tax system" is HMRC's creation of a myriad different forms, online and paper, and knowing what department processes what, and what failings they have, and how to work around them, and what to escalate and when and how. No amount of degrees or professional qualifications can prepare you for this. It takes years of pulling your hair our in exasperation to be able to navigate HMRC's labyrinth of chaos.

Thanks (4)
Morph
By kevinringer
02nd Sep 2022 10:08

An excellent article Rebecca, but as HMRC don't listen to anyone, what good will the article achieve? Take MTD as an example. The profession has reached the point of screaming at HMRC but HMRC has its fingers in its ears. I had thought HMRC was at least listening to the software industry but no, https://www.accountingweb.co.uk/tech/accounting-software/mtd-itsa-guidan...

"“If we raise something that’s important it tends to be sidelined and HMRC presses on ahead regardless – they don’t seem to be listening to software developers."

So HMRC is not listening to anyone. Any business that does not listen to its customers will lose those customers. HMRC has a monopoly so we can't take our business elsewhere, but if HMRC's regimes become unworkable, our clients are not going to pay us to workaround them. So we'll end up not even attempting to make them work.

I feel the problem is HMRC has lost contact with its customers and in its isolation HMRC has become arrogant and developed a misconception of what the typical taxpayer is and what that taxpayer can reasonably be excepted to achieve in terms of compliance with tax requirements. In its arrogance, HMRC have forgotten that all these small businesses owners have businesses to run: HMRC now feels those taxpayer's primary duty is to HMRC, and not the taxpayer's means of survival, their business. Whilst forming this arrogant misconception, HMRC themselves no longer consider their own purpose (the assessing and collection of tax) as being of importance, so HMRC cares not that HMRC take a year to respond to correspondence and that they are making mistakes and their IT is not fir for purpose. I blame Jim Harra and the culture that has developed. HMRC needs to unplug its ears, listen to its "customers" and remember what it exists for.

Thanks (5)
Replying to kevinringer:
By Nick Graves
02nd Sep 2022 16:02

It's been a slow, steady progress (I still remember being amazed that the Citizens' Charter did improve matters) but recently it has descended into total ineptocracy.

It's got to be deliberate - even allowing for groupthink, no-one could be quite so stupid.

Crash the tax system & then use it as an excuse to round up the taxpayers for failure to pay/file/etc?

So which is it, Harra?

Thanks (1)
avatar
By digitalabacus
02nd Sep 2022 10:17

2 September 2022 10:04
Wonderful article Rebecca

This adds to my belief that the Manuals together with Toolkits will become, especially in an automated digital MTD world, the be all and end all of taxation rules.

This will ignore, inter alia :-

1. Tax case law
2. The Taxes acts and their interpretation
3. The decisions made by Tribunals
4. the experience of years of continuing education and reading of wonderful tax books

It is not that they are a bad source of information it is just that it only sees the world of tax through the viewpoint of the Government that sets the legislation, it will not necessarily be helpful in helping the taxpayer to plan for the best outcome and legal solution to their tax problem.

Thanks (2)
avatar
By Brightster
02nd Sep 2022 10:39

When I worked for HMRC, many moons ago, the prevalent ideology of the staff was that accountants were a pain simply because they held the staff to account for mistakes far more readily than the taxpayers did. It seems since then, all HMRC are doing with any 'improvement' (and I advise that word is used under extreme caution in relation to anything HMRC do) is try to cut out the accountants at every opportunity. This will not end well.

Thanks (6)
Replying to Brightster:
Tornado
By Tornado
02nd Sep 2022 11:00

Brightster wrote:

When I worked for HMRC, many moons ago, the prevalent ideology of the staff was that accountants were a pain simply because they held the staff to account for mistakes far more readily than the taxpayers did. It seems since then, all HMRC are doing with any 'improvement' (and I advise that word is used under extreme caution in relation to anything HMRC do) is try to cut out the accountants at every opportunity. This will not end well.

The fact is that HMRC are solely responsible for getting Making Tax Digital to work. It is NOT our responsibility, so they can try and cut us out of the system is they wish (fine with me) but this will then mean that they will have to deal with the Project virtually on their own. This may get worse for them as it seems the Software Developers are getting fed up with them as well and of course, it is NOT the responsibility of these Developers either to make MTD work.

It also seems now that we will have to use MTD for ITSA software (highly complex), Self-Assessment Software and PAYE Software all at the same time. This may sound good for the Developers, but the amount of customer support they will be required to provide will be massive, expensive and largely pointless.

Thanks (4)
Replying to Brightster:
avatar
By johnjenkins
02nd Sep 2022 11:14

HMRC have been trying to destroy the small business (mainly the one man band) for years now. They try in various guises to clamp down on what they perceive as the "tax gap" totally attributable to the One man band business.
We actually got somewhere with "agent strategy", however as Accountants saw it as a good way forward, HMRC have knocked it on the head.
I don't think anyone actually believes MTDITSA will work.
QU for those earning above £10k, absolutely ludicrous and a waste of time, money and energy. There is only one way to stop HMRC and that is for Accountants to flatly refuse and carry on with the tax return. I think if everybody refused, Government would have to take notice.

Thanks (4)
avatar
By Ralphgab
02nd Sep 2022 15:20

Further evidence of HMRC shirking its responsibilities and letting the professions and the taxpayers do their work for them.

Thanks (2)
Mark Lee headshot 2023
By Mark Lee
14th Sep 2022 09:47

Superb analysis Rebecca. I agree entirely. Some of the comments here though (and elsewhere) blame HMRC for problems which are actually caused by the PM and Chancellor.

I'm not saying HMRC are blameless but we should be clear who is at fault for specific problems and then we can focus our complaints and advice accordingly.

Thanks (1)
Replying to bookmarklee:
Morph
By kevinringer
14th Sep 2022 10:39

I accept HMRC are not responsible for tax policy but they should implement it correctly. A good example is the complexities caused by the Dividend Allowance and Personal Savings Allowance which were introduced by George Osbourne (in the same Budget he announced MTD). These first applied 2016-17. Despite being announced in October 2015, when HMRC issued its SA calculator for 2016-17 it was wrong and it took HMRC until October 2017 (2 years after the Budget) to issue a corrected calculator. Months later HMRC decided they'd got it wrong and issued SA302MMs to affected taxpayers. Only a few months ago in 2022, HMRC decided HMRC had got it right in October 2017 and issued a further batch of SA302MMs. The annoying point is that Tim Good had warned HMRC during 2016-17 that their calculator was wrong, but HMRC failed to act and took HMRC until 2022 before HMRC finally decided Tim Good had been right 5 years previously. It was not HMRC's fault that the allowances caused complexities (though I assume they would have been consulted prior to the Budget and should have pointed this out), but it is HMRC's fault for getting it wrong and failing to act when pointed out, then getting it wrong again latter.

Thanks (0)