Earlier this year, for example, the website accountingweb reported an ongoing problem with HMRC charging for late tax return filings for trusts. It transpired that these are not as automated as personal returns and the information on the return has to be input or re-keyed by staff. As a result, even if the tax return is filed on time, any delay in inputting and the HMRC system will flag up a late return and send out a penalty notice.
But HMRC’s system has also been found to not have recorded payments on account on online personal accounts and on paper statements, allegedly a “widespread problem” according to the website.
Other examples have been staff ignorance of the NI (National Insurance) system as it relates to PAYE, of employment allowances, and even miscalculation of tax owed after statements have been submitted, again resulting in incorrect communications.
It is fair to say that HMRC is extremely diligent in following up on late filings, penalties and late payments and in passing cases to its debt recovery teams and in taking swift action to recover monies owed.
At the same time, the Government has been pushing for more and more transactions and communications to be done online.
However, MTD (Making Tax Digital) for example has already overrun deadlines and had to be scaled back – presumably because of problems with the software.
The Treasury was recently accused by the, until yesterday, business minister Richard Harrington of giving SMEs trading with EU States inadequate guidance, which consisted simply of a letter from HMRC advising them to “buy customs software and seek the advice of specialist agents”.
While Adam Marshall, director general of the British Chambers of Commerce, has called for a one-year delay to “Making Tax Digital” – which HMRC still intends to switch on three days after the now-postponed March 29 Brexit deadline.
He argued that it would “give businesses and the Revenue needed breathing space to deal with change.”
When so many Government-inspired digital initiatives have to be either abandoned, delayed or launched but riddled with flaws perhaps it is time to remember that these systems are devised and managed by human beings.
Human beings, even IT developers and HMRC staff, are fallible, but in order to do their jobs the first thing they need is realistic, accurate, clear and detailed information with which to operate.
The orchestra needs to be ready before the conductor can begin.