Where Taxpayers and Advisers Meet
The Taxpayer Strikes Back - The Tax Inspector
14/03/2010, by MARTYN ARTHUR, Tax Articles - General
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HM Revenue & Customs (HMRC) Investigations specialist Martyn Arthur shatters the perception of some taxpayers and accountants about HMRC officials.

Who or What is a Tax Inspector?

The start is probably as good a point as any to consider just who or what exactly is this entity, the Tax Inspector, who is capable of striking fear into the hearts of otherwise brave people? Are Tax Inspectors demigods, human incarnations of the Norse God Thor, able to strike us down at whim with a bolt of lightning? I think not!

Fortunately the general understanding of the authority / power situation as regards the Tax Inspector, as frequently expressed to me by taxpayers and accountants alike, is a complete misconception which I am pleased to be able to correct here.

  1. First and foremost Tax Inspectors are salaried civil servants, administrators occupying junior management positions within Her Majesty's Revenue and Customs (HMRC). The term “junior management” is not intended to be in any way derogatory. The civil service, of which HMRC is a part, operates on the basis of a tiered management structure, in respect of which the grade of Tax Inspector is very much at the lower end.
  2. The Tax Inspector's job is simply to assist with the general administration of the UK Tax System, nothing more.
  3. Tax Inspectors specifically do not have any personal powers, by comparison with, say a Police Officer who has the power of arrest without a warrant and even the power, in appropriate circumstances, to take a human life.
  4. Tax Inspectors have a certain amount of delegated responsibility to implement certain procedures such as the implementation of penalty procedures.
  5. Tax Inspectors do not have ownership of the cases with which they assist in their day to day work. If an alternative administrator takes over the case their importance in relation to it reduces to nothing.
  6. HMRC has recently changed the title of the job description to remove the term Inspector. Since then I have heard talk of a loss of status! But what status? HMRC staff are ordinary rank and file individuals doing nothing more than junior managerial tasks.
  7. In the process of undertaking his job, part of the function of the job of a Tax Inspector is to assist in a pragmatic assessment of the facts with a view to arriving at a factual assessment of a situation.

Just the Facts...

As a slight but relevant digression, within the conduct of a pragmatic assessment I see no scope for the use, by Tax Inspectors, of emotive expressions such as amazement, belief or disbelief, disappointment, surprise and many others that one meets from time to time.

The Fast Track

Consider, around the end of July annually, final year university students across the country will have finished their exams and many will become graduates. Some of those graduates may well become Trainee Fast Track Tax Inspectors and, following on from this, in a relatively short period, they will have started to work their own cases under varying degrees of supervision. Yet just a relatively short time before they may have been just ordinary students, maybe propping up the bar of the students' union and going to wild end-of-year parties. They weren’t creatures to be dreaded then, so what has changed?

The individuals haven't changed per se; they are still the same people that they were a relatively short time before! What has changed is that they have become employed by HMRC in the position of assisting in the administration of the UK Tax System. Those individuals who will become the subject of their attention, generally accountants and taxpayers, will have neither knowledge of their background nor a detailed understanding of their role in Tax Investigation work.

Just the Job

When considering and discussing “the” Tax Inspector it is essential to be clear that we are not considering in any way the Tax Inspector as a private individual in his capacity as a human being going about his private, not work related, daily business. We are considering him very specifically within the cohesive whole “System” that is HMRC, and in the context of the manner in which he undertakes his work within that System. We will consider the way Tax Inspectors undertake their duties within the System, and how the System overall influences their performance, approach and attitude.

I do not have any formal psychological qualifications and as such it would be inappropriate for me to endeavour to introduce amateur psychology. I am however competent to speak about matters associated with education generally. The book Lord of the Flies, by William Golding, (ISBN 0 571 06366 7) whilst fictional, is recognised as a classic and is extremely well acclaimed. Whilst covering a lot of other ground it provides a fascinating insight into the interactions, of human beings when in a cohesive system, and how those individuals interact with and become immersed into that system. It could maybe be an excellent piece of further reading should you be so inclined.

The above is an extract from 'The Taxpayer Strikes Back' by Martyn Arthur.

About The Author

Martyn F. Arthur has some forty years’ experience of dealing with tax, accountancy and business issues from every conceivable angle. He joined the Revenue in 1968 and worked there and in the wider Civil Service for some twenty years. Latterly in the National Assembly for Wales, he drafted legislation that was laid before Parliament, giving him an exceptional ability to be able to interpret statute and case law. Following his time in the Civil Service he developed a thriving accountancy practice where he found himself increasingly supporting other accountants involved in HMRC investigations. On selling his practice his in depth experience of business was broadened by three years as Principal Business Mentor for South Glamorgan Training and Enterprise Council.

Martyn "retired" in his early fifties and rapidly became thoroughly bored lecturing college and university students in the theory of business and accountancy. He returned to the cut and thrust of business life some five years ago and since then has worked exclusively providing support in relation to HMRC Tax Investigations. To date he has assisted with in excess of a thousand investigations. The complaints made in Martyn’s first book, “The Taxpayer Strikes Back” found significant favour amongst accountants and HMRC has set up a special team, with a remit of ensuring the propriety of treatment of complaints, to work directly with him.

Miles Waterman Accountants, Bexley Heath, have commented:

"In all my years dealing with HMRC enquiries I have never come across anyone like Martyn, he is truly unique. His tactics? You just wouldn't dare, but Martyn does dare, and wins!"

(W) www.martynarthur.com

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