HMRC: All your dosh are belong to us

Sometimes I ponder on this blog, its future, the direction it has taken and will in future, and not just because the rest of the writing team seems to be permanently on holiday.

We originally set out to expose institutional stupidity, but during the Election campaign wrote much from our joint perspective of EU-scepticism, broadly supporting UKIP. We are also, by nature, Libertarians, and strongly so, but are, again by our collective nature, broadly Conservative (EU excepted). We are painfully aware of the contradictions those positions throw up which explains our reservations about David Cameron and especially the Coalition Government. There are much more focussed blogs out there, strongly one thing or the other, but I think we’ll just have to accept that we come from too broad a church to be so tightly focussed.

However, our Libertarian hat has just been blown from our collective head…

We have endured 13 long years of New Labour ineptitude, incompetence, lies, war-mongering, cheating, stealing, waste, and most of all assaults on our civil liberties. I, for one, doubted it could get much worse, despite the fact that I believe Cameron is a Socialist and has become more of one since he teamed up with the Liberals. In giving him the benefit of the doubt I knew I was being credulous; the evidence was there. The non-appearance of the promised EU referendum, this nonsense with AV, the new right for EU police forces to come in and press-gang British citizens back to European courts with no evidence required, and lots more. But this… This is a step too far: way too far.

Government, of whatever hue, has form on this. The best examples are all the dozens of civil liberties removed or severely curtailed in the name of “The War on Terrorism”, an existing trend which exploded after 9/11. This however, is in another league, and is actual communism, and surely the ultimate in State control.

For those of you still with this, and wondering what I’m banging on about, I shall explain.

The Government, in the guise of the tax authorities, is consulting accountants, lawyers and businesses on plans to reform the pay-as-you-earn (PAYE) system. The spin today is that this has been triggered by the current debacle in the news currently surrounding HMRC’s massive cock-ups with PAYE. Fair enough, but, as ever, the devil is in the detail…

The Telegraph article says:

“Instead of employers deducting income tax then paying gross salaries to employees, the gross monthly payment would go to an HMRC-run tax “calculator”, which would then pass the net salary to the worker.

The reform would mean the end of traditional monthly payslips, because employers would no longer be able to tell workers how much tax they had paid each month. “

and…

“Under the centralised deductions system, employers would pay workers’ monthly salary into a central calculator run by HMRC.

There, income tax deductions would be made automatically and the net salary then passed on to the worker by HMRC.

Instead of a payslip detailing pay and deductions, workers would only find out how much income tax they had paid by asking HMRC. “

Have a little think about that for a moment…

• You will give HMRC your bank details and your actual gross salary, as in, the salary, not the figure it amounts to, every month/week.
• You will also trust them to make the right deductions and pass on your correct net salary every month/week, on time.
• You will no longer get a complete monthly/weekly payslip from your employer.
• You won’t have a clue what has been deducted except by asking HMRC.
• If there has been an error you will have to rely on HMRC to correct it (and tell you about it first).
• You will have no way of stopping them from deducting cash for some of the new and exciting ways they have discovered for fining us under some of those lovely new laws the last Government foisted upon us. Sort of “We take it now, and we can argue about it later”…

and here’s the justification from the Government:

“Treasury sources said ministers had made no decision on overhauling PAYE, but insisted the Coalition is determined to make the system more accurate.

A source said: ‘Labour left the tax system in a mess and we are determined to clean it up.’ “

Sound familiar?

Makes you feel all warm and fuzzy, doesn’t it?

Laughably, they really do think we’re stupid. Apparently, due to a massive cock-up inside HMRC, in the two years from 2008-10, almost six million people paid the wrong amount of income tax, leaving some facing demands for repayment and others qualifying for rebates. The Daily Mail has covered this in detail here and here, reminding us that HMRC “lost in the post” the personal details, including Bank account information, of 25 million, that’s 25 MILLION, people in November 2007. It appears that HMRC also has more than 18 million open cases relating to wrongly paid tax predating 2008. As the Daily Mail points out, HMRC knew about this on-coming disaster as long ago as September 2009, but they pressed ahead anyway.

So, no cause for worry there then.

Clearly, as when the cure for Socialism not working is more, stronger Socialism, the cure for HMRC incompetence is to give them more to do. Way to go Cameron…

PS. Anyone unfamiliar with the phrase “All your dosh are belong to us” (hat-tip The Register), see here.

Update: Old Holborn has some good advice on this. Speaking as an ex-contractor myself, I can’t argue with it…