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I love HMRC - Do you?

Tuesday 25 October 2011, 20:56
By John Smith

No. I haven't lost all reason. I have simply come to the conclusion that HMRC is so inefficient and in such a shambles that they make me feel good about myself. I realise that I am not as bad as I thought. Why do I say this? Well, have you ever received a letter like this?

A friendly letter from HMRC 

Pay particular attention to the paragraph highlighted. This seems to me a very last resort statement to be used only when all avenues have been exhausted. So why did I receive this final straw letter? Maybe my story will resonate with some of you out there. If so let me know.

Like all self-employed businessmen I dutifully have my accountant complete my accounts and they are submitted using the HMRC online submission facility. I then receive their assessment and make my first payment to HMRC at the end of January 2011. So far, so good. Well done HMRC.

Life and business carry on normally day to day. Well not quite, because I am not the most disciplined or practical of people. So for once, I use my calendar to remind me to pay the second tax instalment to HMRC on 22nd July 2011, as I will be going to visit my father in Scotland and I don't want to miss the deadline and get charged interest.

Half way through my week in Scotland I get a call from my wife to tell me that I have a letter from HMRC saying that I haven't paid the second instalment of my annual tax bill. Ok, now I am worried. Remember that I am not the most practical person in the world. Did I send the payment or didn't I? I am suddenly feeling vulnerable and my confidence is somewhere near the U-bend waiting for someone to pull the flush. There wasn't a lot I could do from Scotland so I left it till I got home in early September.

I first check my file containing all my payments and there, to my astonishment and part amazement is a copy of my assessment clearly marked "Paid Online Co-op 22/07/2011". I hadn't forgotten (self-esteem starts to climb out of the U-bend heading for the rim of the bowl).

So what happened?

I check my online statement at Co-Op Bank. Bummer! No sign of the payment anywhere. My self-esteem is now heading back to the U-bend. This is looking pretty bad. Should I run for the hills, or immigrate to Grand Cayman?

I decided to ring Co-Op Bank. I love their online banking system, but it's nice to know that you can also ring them. They are really nice people who actually talk to you like you're a human being. They confirmed that no payment had been made to HMRC, so at least I still had the money. Phew! After a bit of research my Co-Op friends come up with an answer that was quite astonishing in these modern times. Their answer revealed a weakness in the Co-Op system and a complete mess at HMRC.

  • My payment had been made in all good faith.
  • My payment to HMRC, made on 22nd July 2011, failed because HMRC have not signed up to the "Faster Payments System" of banking. Considering that all banks were under pressure to adopt this system to help business cash flow I find it completely unacceptable that UK Gov. PLC has a tax office that doesn't accept faster payments. I pay all my bills with faster payments so that my suppliers have minimum inconvenience, and they see me as a good payer. So for HMRC to use "Citi Bank" who doesn't accept this system is nothing short of scandalous.
  • I also asked Co-Op why, when I logged onto my system, I didn't get a red flag showing a failed payment. The facility is there but it seems you have to dig for it.
  • I ring HMRC and explain fully what has happened. They say all is not lost and that it is Ok to make an online payment using the normal three-day method. However... I now owe them just under £3 in interest for late payment. I what? I explain again that I made the payment in good faith, and that it wasn't my fault the payment failed. I am told that I can make the payment, less the interest part, but that this small amount will remain on my account as unpaid. Arrrrgggghhhh!
  • I now get into my Co-Op online account and make the payment via the three-day system. The payment is confirmed and I print off the proof. I write a very nice letter to HMRC to express my concerns. I also take the time to check the payment terms on their assessment document in case I missed something. I find absolutely nothing that tells me I can't use "Faster Payments".

I guess this is where the story should end. After all we are dealing with HMRC, an inanimate non-thinking entity that doesn't know one end from the other. Put it down to a life experience that we can all laugh about in years to come.

Under normal circumstances I guess that would be possible. But then I receive the above letter that is the straw to break the camel's back. I have paid the bill, including interest, but they then send me a threatening letter telling me that if I don't call they will visit my home and start to take my goods to pay the bill. What would you do?

I have nothing against the very hardworking people in HMRC. I do, however, think that HMRC has a jobsworth system that allows little or no flexibility. It's a system controlled by faceless wonders who sit behind large desks in plush offices leaving the poor front-line workers to catch the brunt of the frustrations of people like me. They still get their bigger-than-deserved salaries and golden handshakes. Why is it that self-employed people have no confidence in the system? Why does the system not change? Could it be that HMRC are incapable of listening to, communicating and cooperating with businesses at grass roots level?

Am I alone in this? Is my experience unique? It would be a comfort to know that I am not alone. It would be a relief to know that I haven't just gone loopy. Who knows, we may even help each other feel a little better about daily life.


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