Tax computer says no…

IN AUGUST 1986, just 25 years ago, HMIT (tax inspectors’) office at Selby North Yorkshire was closed down and their “customers”, transferred in the main to the offices at Goole and York. Despite being a small tax office, it was one of the most efficient in the North of England.

We were not particularly inconvenienced by its closure but that personal touch that helped resolve so many minor problems for our clients and the Revenue disappeared, I suspect to everyone’s detriment.

The past 25 years have seen the professions’ relationship with what has become HMRC change out of all recognition. Centralisation, computerisation and impersonalisation have progressed at an ever increasing rate. Yes, if one wants to reduce costs computers have to be part of the progress but the introduction of Self-Assessment in 1977 saw a more adversarial attitude being taken.

You could sense that the Revenue was glancing jealous eyes across the Atlantic, hoping that the accountancy profession would struggle with their own computerisation and become more fragmented and that they could become the equivalent of the big, all powerful Internal Revenue Service. But somehow the accountants kept on striking back and holding their own.

Now HMRC, already struggling under the weight of their administrative burden, are to lose even more staff. Of course computers will fill some of the gap but what no one takes account of is the demoralising effect of yet another round of job cuts. As to who stays and who goes, the impression is that experience has taken early retirement and that the delivery in customer service is being diluted.

Whether you like it or not, our tax system is complex and the technical input is essential. Not just at head office where the policy is dictated but at the sharp end out in the field. None of this has been helped by HMRC pronouncements on new targets for tax amnesties, statistics that don’t agree with independent figures on tax enquiries and an apparent frustration with the tax advisors who just keep on finding new ways to poke holes in the system.

The newly introduced Business Records Checks may well provide more ammunition for HMRC’s view that we, as taxpayers, have to be kept in line or we will fail to pay our dues. Generally, most are honest here but part of Greece’s problems is the determination of the citizenry never to pay their full taxes.

There is a problem looming.

The increasing tax burden, the impersonalisation of the tax service and the increase in complexity may, at some time in the future, positively encourage the taxpayers of this country to adopt some of the attitudes of our southern European neighbours . To combat this, one just hopes that we don’t see further powers being granted to HMRC that will take us into an Orwellian nightmare of state control.

David Ingall has recently retired from UK200 Group practice JWPCreers

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