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TaxationWeb says HM Revenue & Customs is not always to blame for complexities in tax

Last week I was accused of being a little bit critical of the new IR35 guidance in HMRC Publishes New IR35 Guidance - Whom does it Really Help? It's probably true, although I'd happily repeat, to anyone who'd listen, that the new guidance was pretty non-committal, and fought shy of comprehensively tackling the underlying issue(s) of/with status. And then of course we also gave HMRC a bit of a hard time over digital exclusion last week with The Digital Divide is Hurting Some Taxpayers - although I hasten to add "Not me, Guv" (or should that be ".gov"?) but the Low Incomes Tax Reform Group and Robin Williamson as Guest Editor.

Which is not to say that I don't share LITRG's concerns on behalf of taxpayers who find it difficult to engage with HMRC - or other government agencies for that matter - as communication channels are drastically cut to save money. I suspect that 'cost displacement' from government to citizen will be a theme to which we might return in future.

So does being 'nice' about HMRC this week mean that I have to be critical of someone else? Well, yes it does this time. There have been a few articles in the general press about there being millions of HMRC 'errors' on 2011/12 coding notices, with tax bills and refunds following as a result. As LITRG and others have calmly pointed out, these are not 'mistakes' but simply a part of the Pay As You Earn process of reconciliation: incomes and taxable benefits (or allowable deductions) can change in a tax year, resulting in under- or over-payments in tax which have to be reconciled. (And yes, we have criticised HMRC about PAYE in the past but mainly because of the time it took to deal with those reconciliations and because they were then asking taxpayers for tax that was several years old).

I doubt that the people who wrote those articles misunderstood the PAYE system but simply put, that unfortunately, 'reconciliation' doesn't grab the public's attention as much as 'HMRC error'. But I'll take accuracy over hyperbole any day. (Knowing as I type that it will probably not be too long before I am adding 'hypocrisy' to the list of my sins). So that' s a bandwagon TW will not be catching, since PAYE is basically doing what it's supposed to, reconciliations and all.

Regards all,

TWed