What organisation can get away with overcharging up to one in ten of its customers an average of £40 to £50 per year and get away with it? Answer: the Inland Revenue. Who can get away with promising to send copies of invoices to customers' representatives, then deliver only about one in three? The Inland Revenue. Who can get away with promising that, over a period of many months, it would check the bills of one in ten of its customers, then pick 90% of the targets in the last few days before the time limit expired for the simplest of checks? Well, maybe you're getting the idea by now, but that would be the Inland Revenue. Who announces a scheme that lets it avoid checking the bills of 400,000 customers, because their bills are too small to be worth checking? Or invents rules that are so complicated that three years on, their own staff struggle to make sense of them? Or, while its staff are struggling to operate a new system, stamps on morale by announcing plans to lose 10,000 staff through natural wastage. Yup, that would be the Inland Revenue. Readers will be all too familiar with some, if not all, of the above. My personal favourite is the 'Interest Scam'. We've all seen consumer programmes on TV featuring the con-artists who send out invoices for £49.99 knowing that many companies will pay them without question. How many clients of accountancy firms have received a statement of account in the last year or so, charging a net £40 or £50 of interest and just paid it, believing that it is not worth checking. After all, the firm is supposed to receive a copy of the client's statement too, so surely if something was amiss, the accountant would have spotted it and let them know. If, as my personal experience leads me to believe, up to one in ten taxpayers are receiving demands for such sums as a result of the Revenue computer's continuing insistence on charging interest and allowing repayment supplement until payments and liabilities are matched up, then up to 900,000 people are paying up to £50 each. This nets the Revenue £45,000,000 in extra income. And why? Because the Revenue's computer works that way! I wrote to the local self-assessment unit, pointing out that it costs CLB's clients as much as it saves every time we have to ask them to remove one of these erroneous charges, and asking if there was anything we or they could do to stop them. I asked if the Revenue could not introduce some sort of 'quality control' procedure to catch statements of account containing parallel interest or supplement charges and refer them back to someone to correct. The answer was 'no'. Somerset House is aware of the problem - it has been aware of the problem since self-assessment was introduced - but it is not known when a 'fix' will be available for the computer software. In the meantime, it is up to the taxpayer or the agent to contact the tax office and ask that the charge is removed. Another favourite is the 'Statistics Fix'. How many readers received a flurry - or deluge - of enquiry notices at the end of January? How many of the enquiries were anything more complicated than requests for pension premium receipts? I'll bet not many, but then the Revenue had to meet their statistics and an easy enquiry, settled by return, shows up on the statistics just as well as a lengthy enquiry into a client's return. Minimum effort, maximum result for the Revenue. How many clients incurred costs just so the Revenue could meet the target Somerset House had set? In addition, how many accountancy firms receive the copies of clients' statements of account, as is their right? How many of us found ourselves writing to clients telling them how much tax to pay at the end of July, based on statements which had been issued in April? How many readers have had problems with claims to carry back pension premiums or claims to make reduced payments on account? There are many faults with self-assessment, and I have no doubt that it is the man or woman working in the local office who bears the brunt of complaints from taxpayers and agents. But it is not the local office that is at fault. It is time that those in Somerset House, who are hiding behind the local offices, take responsibility for the system that they admit is defective - and act. It's time for Hector to take the pressure off those on the ground who are taking the flack for a flawed system of taxation and a poorly programmed computer system. - John Bowman is senior tax manager at CLB London.
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