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Does She Mean Us?

TW Ed thinks the public might be better served if HMRC’s Chief Executive got off her backside and did something useful, such as learn about tax and HMRC's duty to taxpayers. 

For those who think the comment a little strong, it should be read in light of Miss Homer’s remarks as reported in the national press at the end of last week.

As we advised a few days ago, HM Revenue & Customs (HMRC) is keen to ensure that people who may be affected by the new High Income Child Benefit Charge register for Self Assessment by 5 October. HMRC is apparently concerned that there may still be 200,000 or more taxpayers who are affected but who have not registered under the Self Assessment (SA) regime.

Now, you might expect HMRC to say to the stragglers, something along the lines of, “Don’t worry: so long as you have settled your tax bill in full by the end of January next – including any additional tax due for the Child Benefit charge – then the penalty will be nil.”

Certainly, that would appear to be in line with HMRC’s Charter  – somewhere between promises 2, 5 and 9.

But according to reports in the national press last week, HMRC’s Chief Executive, Miss Lin Homer, preferred instead to suggest that those taxpayers who were potentially ‘caught’ but had failed so far to register for SA, needed to “get off their backsides and do something”.  Backsides do not feature in HMRC’s Charter, nor in the legislation, such as I recall.

 What I do recall from the legislation, and in particular FA 2008 Sch 41 Para 7(2), is:

“In the case of a relevant obligation relating to income tax or capital gains tax and a tax year, the potential lost revenue is so much of any income tax or capital gains tax to which [the taxapayer] is liable in respect of the tax year as by reason of the failure is unpaid on 31 January following the tax year.”

And if there be no Potential Lost Revenue, there can be no penalty – or no charge at least.

So, a taxpayer does not need to “get off his or her backside and do something”,  save settle up by 31 January next.

I infer that HMRC has two fears:

• They will be inundated by taxpayers telephoning to ask for a payment reference, in the last few weeks in January.
• There will be so many people who fail to enrol for the SA regime that HMRC will be forced either to offer a penalty amnesty, or risk humiliating reversals in the tribunals over whether or not the penalties are ‘reasonable’, or the new tax charge itself is legal.

I might have some sympathy for HMRC in having to administer a poorly-devised tax charge but that sympathy soon evaporates when its Chief Executive stops helping taxpayers and starts trying to shift HMRC’s responsibilities onto the taxpaying public. Under Self Assessment, there’s been enough of that already.

Regards all,

TW Ed