Wednesday, 8 September 2010

PAYE - Precisely As You'd Expect?



So, the recent PAYE fiasco has brought The Smart Frog prematurely out of hibernation. How could such a debacle go by without comment?

To summarise:

Almost six million people are embroiled in the biggest tax blunder for years.

About 1.4 million will have to fork out an average of £1,500 after underpaying through absolutely no fault of their own. Some will face far higher bills, though the Treasury insists no immediate repayment will be required if the sum is more than £2,000. Let's wait and see, shall we?

For 4.3million, the news is better. They will be told they are owed money by the taxman after having too much deducted from their earnings. The total in overpayments is £1.8billion, meaning an average rebate of £418.

For those who owe tax, there is an option. It's a little-known (certainly not in the general public-domain) rule called "official error" which broadly works to write-off tax which is owed under certain circumstances. Have HMRC publicised this? Have they heck.

The irony behind all this is that almost all of those affected are employees and therefore unrepresented and will, in all probability, know nothing about the "official error" rules and their rights.

Whatever eventually happens, The Smart Frog thinks that one fact is now glaringly obvious - the management of HMRC is grossly incompetent. Isn't all this just precisely what we've come to expect? They stagger from one crisis to another. Tax bills are wrong. Confidential data is routinely lost. The tax credit system is a total farce.

Should their management really be getting bonuses and appearing in honours lists or should they be dispatched to the nearest job centre? In the real-world outside the comfy arms of the Civil Service they wouldn't survive a minute.

Rant over. Night night.