Thursday, February 09, 2012

The tax man, the musician and the poet: a cautionary tale.

It couldn't last. All that laid-back, chilled cheerfulness induced by some out-of-season sun and warmth had to be dissipated, didn't it? So for pricking the bubble - in fact, for the prick of the year award - I nominate the tax-man. I suppose he mightn't like it if I named him, the almost-anonymous jobsworth who signed the letter to Mr B with a diagonal dash that bore no resemblance to the name typed beneath, and I actually don't know the gender as there is only an initial, but here's to you, AD, for raising a rant.

For a start, the letter dated 7 February comes in response to a written query dated 25 November which arrived in the tax offices on 28 November. Nothing unusual there - the workings of HMRC are glacial. The joyful tidings can be summarised in the opening of the second paragraph: I can confirm that you are still due to pay the amount as shown on the tax calculation that we sent you. They go on: You are obliged to obtain and retain all original documentary evidence of all allowances, reliefs, income, pay and tax, even if you are not required to complete a Tax Return, to allow you to check your liability and to allow you to inform HMRC of any income which has not been fully taxed. 

I hope you're paying attention. I hope you're doing this - are you?

The letter goes on, in impenetrable jargon, to tell him that he was issued a notice of coding blah blah for the year 2009-10 in January 2009. It's the following sentence that seems particularly impenetrable "HMRC have checked with your pension provider, SPPA Finance and HMRC agree that no error was made for which action can be taken." Quite apart from the weak punctuation that arouses doubt as to what the writer is actually saying, it looks to this non-accounting mind as if what they are saying is "We made a boob; your pension provider took it as being correct; it's not their (SSPA's) fault - because "they acted with reasonable care, based on the information they held at the time." The letter goes on: "You were notified of this decision on 2 November 2011 and that decision stands. I reiterate that your pension provider is not to be held accountable for the liability notified because it is your liability and remains due ..."

The letter goes on to make it clear that all these codes with which HMRC issue us have intrinsic meanings and that it's our duty to understand these and check them. "It is your responsibility to check (these) and to check your liability and you would then have had knowledge of any errors occurring and then would have been able to inform HMRC." Eh? Let's clarify the actual situation here. We have someone who has not filled in a tax return since PAYE was introduced, someone whose salary was publicly known and who never worked in a private capacity to earn extra money, someone who, furthermore, has been retired and in receipt of the same pension for the past seven years - and suddenly HMRC decide to send him a new tax code and get it wrong and it's his responsibility to check it? What precisely are these tax people paid to do?

The nastiest paragraph states "... you were fully aware that your tax affairs were not in order (as you have stated that you know that the incorrect PAYE tax code was being operated when compared against the notice of coding P2 dated 16 January 2009, yet you did not act to try to correct the issue. The evidence you have sent confirms that you were aware, (sic) of the situation, (sic) but did not act." Seeing that a different coding has been applied and automatically knowing that it's a mistake are two different things, surely?

Given that figures and taxation are part of a foreign country into which I have recently had to travel because of consultancy work, I know that these people blunder - but had they not done so quite so blatantly at the end of last year when they sent me two different codings within a week and then took a chunk off my pension as a result, I would not have assumed this. (I did not, by the way, ever recoup any money lost in the month when I was waiting for the repayment of this chunk).

Seems to me that the operatives at HMRC get things wrong rather too often for comfort and then send out these missives of hectoring and patronising jargon which threaten rather than apologise and assure us that they will take the money and there's not a thing we can do to stop them. We are expected to have a grasp of their arcane procedures, be we musicians or poets - even though their letters are so badly written that they could well do with the blethers' course in Plain English. Do the rest of us get off with blunders on such a regular and harmful fashion? Doctors, maybe? Dentists? (ouch)

From now on until I pop my clogs, I'm going to phone HMRC every time a bit of official paper arrives chez blethers, be it a tax coding or an allowance. I'm going to query every last thing. Join me. They asked for it.


  1. As an American who has been in this country for over 30 years I find the tax system here totally incomprehensible! Fortunately for me my husband is not only able to understand how it is supposed to work, he is also capable of dealing with the innumerable cock-ups that have dropped through the letter box over the years. And the older and grumpier he gets, the more he seems to enjoy the task. Good luck with the battle, Christine.

  2. My husband - whose affairs could not be better ordered - had three tax investigations in his working lifetime...each time down to HMRC's inability to follow their own rules.
    Could you not offer your services (paid) to them as a communication consultant?

  3. Ouch, I feel for you, Christine, not last about the dreadful letter. I think either DH and I have been very lucky, or our Tax Office in South Wales is uniquely efficient, but we have had virtually no problems over the nearly 40 years we've been dealing with them. Good luck with getting it all sorted - I love Fly's suggestion.

  4. Colin2:09 AM

    As a Scot who has been in America for 12 years (lol!), its profound that an American finds the UK tax system incomprehensible, because the US system is beyond reason, comprehension, and fairness! Since I earn1 penny in UK income in interest on my paltry cheque account balance, my incentive to file is low and I'm accumulating a hilarious multi-year penalty for non-compliance with self assessment filing. The beauty of the situation is, that when you don't actually owe any tex (they owe me the 25% of my accumulated 5 pence over the years that has been deducted ar source), all penalties and interest get eliminated. I look forward to the filing day with some glee - but I think I want to see a few hundred more in penalties before I feel enough incentive to face up to the form filling! I'm expecting :a letter" someday though - I'll let you know when it comes and we can collaborate on the response!

  5. Oh dear. You have my deepest sympathy and I hope you have the energy for the fight! As a self employed artist I know where you are coming from..

    Good luck.