Keith Williams - CPTT
Shirley Davies - CPTT
Chris Edge - CPTT
Bill Martin - CPTT
Alice Gunn - HMRC
Jeff Smith - HMRC
John Neale - HMRC
Athene Cronshaw - Ernst & Young
John Foxon - HSBC
Susan MacKenzie - Philanthropy
Ian Haughton - Grant Thornton
Mark Levitt - Hazlams Fenton
Andrew Tailby-Faulkes - Ernst & Young
Andrew Statham - BDO Stoy Hayward
CE welcomed everyone to the meeting and ran through the action points from the previous meeting held on 27 September 2007.
AP1 – Position of co-chair carried forward to next meeting.
AP2 – SG agreed to provide an update on Donor Rules FA2006 –
on agenda today.
AP3 – Members to confirm agenda items – CE apologised that the
only Agenda item requested – Residence and Domicile had to be postponed
till the next meeting due to the pending budget.
AP4 – SM agreed to provide details of any agreements used by those
representing Expats. This is still being put together and will be produced
at the next meeting.
BM advised:
On 10 January 2008 HMRC published three Modernising Powers, Deterrents and
Safeguards consultation documents.
1. Payments, Repayments and Debt: Responses to Consultation and Proposals
2. A New Approach to Compliance Checks: Responses to Consultation and Proposals
3. Penalties Reform: The Next Stage
These consultation documents have been published on HMRC’s website.
The deadline for submitting comments on the three consultation documents is 6 March 2008, with a view to legislation in Finance Bill 2008.
The document includes a summary of responses to the June 2007 consultation and proposes four changes to the statutory framework which allows HMRC to collect tax debts and ensure that taxpayers pay what they owe.
The document includes a summary of responses to the May 2007 consultation and puts forward proposals for a new framework for HMRC to check that taxpayers are paying the right amount of tax and claiming the right amount of repayments.
The document puts forward proposals for extending the new penalty regime enacted in Schedule 24 Finance Act 2007 beyond the five main taxes to all other taxes, levies and duties that HMRC is responsible for, except for tax credits and national minimum wage.
The document also proposes a new single penalty provision for failure to register a business for VAT or notify HMRC of a new taxable activity, to replace the existing provisions.
BM also advised that:
On 10 January 2008 Financial Secretary to the Treasury, Jane Kennedy, announced that HMRC would begin the process of working with interested parties on the development of a Taxpayers’ Charter, which will set out both taxpayers’ rights and responsibilities in a single accessible document.
The announcement was made alongside publication of Modernising Powers, Deterrents and Safeguards: Safeguards for Taxpayers: summary of Responses and reflects the Government’s commitment to ensuring the tax system is useable and accessible for all taxpayers.
BM advised members were welcome to comment on the ‘What a Taxpayers’ Charter might look like’ by email to Powers Review or by post to:
HMRC Powers Review
Room 1/72
1st Floor
100 Parliament Street
London
SW1A 2BQ
or by fax to 020 7147 2375
AFT welcomed consultation on a new taxpayer’s charter.
JN advised that unfortunately because of the pending budget he was unable to give an update on the Donor Rules FA 2006. However, he was able to advise that a detailed submission had been made to ministers bringing together all concerns raised.
SM asked when a reply was expected JN added 12 March or shortly after.
BM updated members on Culpability in Enquiry cases (when HMRC seek penalties).
HMRC use the word culpable to describe any act (or failure to act) which triggers any of the various penalty provisions.
The first stage is to establish the facts as to why/how the error arose. Only once the true facts have been established can the appropriate degree of culpability and penalty be applied.
HMRC assume that a reasonable man would:
1. comply with the requirements of the law by, for example, notifying his chargeability
2. make, promptly, a complete and correct return of his income and gains
3. keep such records as are necessary to enable him to make accurate returns or prepare accurate accounts etc.
4. read carefully the notes supplied with the return form, so far as they affect his own circumstances
5. seek professional help with matters which he is unable to cope with satisfactorily himself
A taxpayer cannot however delegate responsibility for his own returns and accounts etc. even though an agent is employed. The taxpayer must take personal responsibility for the accuracy of the return and the declaration that to the best of their knowledge it is correct and complete.
ATF highlighted there was still confusion about Veltemar; KW advised that if members felt it useful a rep from TAA could be asked to attend the next meeting.
JF asked what process was in place for recommending the level of penalty. KW advised that a suggested penalty was initially calculated by the Enquiry Officer and authorised by a Compliance Manager who generally would not be involved in the case personally and then when settled looked at again by someone else.
SD advised CPTT had put a lot of work on to ensuring there was a consistent approach to penalties following a benchmark exercise when CPTT was set up, where inconsistencies were identified. AS asked how many cases resulted in penalties of less than 10 per cent. BM said that whilst he did not have any figures to hand he could assure the forum that in some cases penalties of less than 10 per cent were taken. KW asked members to let BM know whether there were any problems with Penalty charging in CPTT. Is this correct?
SD gave an overview of the Review by Lord Cater of Coles and how it affected the complex/wealthy customer:
There is to be an overhaul of the existing PAYE system (known as COP – been around since 80’s)
The new system goes live in Oct 2008.
For employers, the main impact is the mandatory filing of In-year forms (EOY Returns (P35 & P14s) online submission has already been staged in):
This is a huge change for all Employers and indeed for HMRC staff.
For SA, the changes relate to a strong steer for online filing of Self Assessment returns and a change to the enquiry window. This will now be linked to the date the return is filed (12 months) not the current Fixed Filing Date of 31 January.
If a customer wants to file on paper they must do so by 31 October. Online Returns can be filed up to 31 January. Anyone filing a paper return after 31 October, and not paying all their tax due by 31 January, will incur a penalty.
SD provided some CPTT Filing statistics (since updated as below):
CPR: 91 per cent of the 2006-07 returns issued were filed by 31 January 2008, of which 62 per cent were filed in January.
Expat: 62 per cent of the 2006-07 returns issued were filed by 31 January 2008, of which 50 per cent were filed in January
CPTT: 74 per cent - 52 per cent in January
Return |
2006-07 Return - Internet filed to date |
2005-06 Return |
|---|---|---|
CPR |
52% (64% in Jan) |
38% |
Exp |
21% (41% in Jan) |
14% |
CPTT |
35% (57% in Jan) |
25% |
National |
43.5% |
34.20% |
Expats file late because of the difficulties in obtaining their financial information from their overseas employer and tend to steer away from online filing because of complex issues relating to Tax Equalisation/Modification. But there has been a big improvement and SD is working with Expat Employers and Agents to try and overcome their problems.
For the complex/wealthy, the CPTT online filing rate is far higher than national.
Members discussed some issues and concerns they had with online filing and JS agreed to take these forward.
KW advised that CPTT dealt with a specific segment of the individual segment – ie complex wealthy individuals and certain individuals who came to work in the UK. They were now considering the benefits of further segmenting various groups of these individuals within the CPTT teams. This would mean a more customer focus approach as they would be dealt with by specialists who better understand their issues. This would also hopefully enable better links between CPTT and the specialists in accountancy firms etc.
CPTT’s recent restructuring into groups means we have the capability to do this and the introduction of MPPC will allow us to move our work more easily.
CPTT are interested to know what members think:
KW advised that CPTT proposed to initially centralise certain types of sectors – for example the football industry, entertainment and barristers. Once finally decided CPTT would write to its customers to let them know. Other types of sectors etc would be reviewed for specialist teams over the coming months.
It was confirmed that the grouping of the types of sectors initially proposed was not because they were perceived to be of higher risk than other sectors or that it was planned to increase the level of enquiries into their personal tax affairs.
If however when centralising the work of any sector in the future it became evident that there had been an inconsistent and inappropriate approach in the past this would need to be addressed, but there would be appropriate liaison with customers if that materialised.
ML asked whether CPTT had consulted with firms who had specialists in these areas already. KW advised he had consulted separately with some representatives who had been generally supportive of the proposed approach, but the reason for bringing this issue to today’s forum was to seek much wider views.
AS asked whether specific training would be given to staff? KW said individuals would build up more knowledge about a specific sector from a variety of means – which would hopefully include having closer links with external colleagues who have particular expertise and knowledge.
The general view of the forum was that further segmentation within CPTT would be a positive move.
KW advised that CPTT now had lead technicians in place within CPTT with responsibility for individuals’ personal tax affairs that involved:
One would soon be appointed for Business issues.
He stressed these individuals were not there to replace Head Office Specialists. They are in place to ensure a consistent approach across CPTT and to build better links with external and internal customers on these issues. Also working under these lead technicians would be others who would specialise in specific topics. Names of these people will be available shortly and they should be contacted if customers had any issues they wished to discuss about the general CPTT approach on such topics.
HMRC has pulled together following various consultation channels with Agents a list of issues that ‘irritate’ agents when dealing with HMRC.
CPTT has managed to obtain a copy of these and we will be looking very closely at them over the next few months to see whether we can learn anything about the level of service we provide.
CE advised that work is currently taking place on the HMRC Internet Site and members may see changes April 2008.
In particular this will affect how members find our addresses/telephone numbers.
From April you will find us in the A-Z contact list, not under Specialist Teams as now.
CE advised that at a previous meeting members were asked to complete a short questionnaire about measures of quality, used by CPTT to enable them to gather information about what is important to its customers you in respect of processing of Self Assessment returns and post.
The purpose was to assist a review of our quality measures to ensure they are Customer Focused. We are using these comments to inform our processes from April 2008.
AG – The HMRC payrolled benefit review consultation ends on 14 March for anyone who would like to comment.
AG reminded everyone that the new CG pages (2008 Return) require a CG Computation to be attached with the return.
Next Meeting will be on 18 June in Euston Tower.
