HMRC keeps us holding on!

As many as 17m people waiting more than five minutes on the phone for a tax query to be answered is 'acceptable', according to HMRC’s boss when grilled by a panel of MPs.

The startling assertion was made by chief executive Lin Homer during her appearance before the Public Accounts Committee (PAC), defending the tax department’s record in dealing with calls from members of the public and business community.

Referring to the figures released in a National Audit Office report, which revealed that 76% of the 80m calls for the period of 2011/12 were answered, Homer said: ‘If we can answer 90% of calls – like the last quarter - we think that people will wait up to five minutes. People believe that ... is reasonable.’

The HMRC boss also admitted that a four minute call waiting time did not include up to two minutes spent listening to pre-recorded messages but that from April, 80% of calls would be answered within five minutes.

PAC chair Margaret Hodge, who began the session by stating how ‘disappointing’ HMRC’s call centre results were and that ‘it was difficult to know where to start’, described the target of five minutes waiting time as ‘unambitious’ and ‘miles below the industry benchmark’.

Calculating that the remaining 20% of callers - who would have to wait longer than five minutes to speak to a person – would be 16 or 17m, Hodge said that ‘was a heck of a lot’ of callers.

In other exchanges, Homer also acknowledged that it wasn’t acceptable that callers had to fork out a combined £136m in call charges, declaring ‘we have got to do better’.

The PAC hearing is available to view from

Parliament TV

Swiss pay HMRC half a billion

The UK-Swiss tax agreement which came into force on 1 January 2013 has delivered £342 million as the first tranche of revenue to the UK. This is the first instalment of a levy on the accounts of UK taxpayers in Switzerland to cover arrears of tax that should have been paid to the UK.

Current and future tax liabilities will be covered by a new withholding tax of 48 per cent on income.

Under the agreement, people with taxable assets in Switzerland have a choice of authorising their financial institution to disclose the details to HMRC or have the levy and withholding tax applied by the institution.

Exchequer Secretary David Gauke said:

'Our agreement with the Swiss Government will deliver around £5 billion of previously unpaid tax to the UK.

‘The first down payment of 500 million Swiss francs has now been received. This is money which was owed to the UK and has now been paid.

‘Offshore evasion costs the UK billions of pounds every year and we are determined to tackle it. One of the ways is through information exchange and this agreement makes it easier for HMRC to obtain information about UK taxpayers suspected of hiding money in Switzerland.’

HMRC has recently published guide to the agreement. As well as explaining the options available under the agreement, this factsheet provides details of the other ways in which individuals can ensure that their tax affairs are brought up to date. It includes contact details for those who now wish to make a direct disclosure to HMRC.

The guide is available from HMRC.

NIC rates

HMRC has published draft regulations and an order setting out the National Insurance contributions rates, thresholds and limits for the 2013-14 tax year. The draft regulations and order are subject to approval by both Houses of Parliament.

The relevant draft regulations are the Social Security (Contributions) (Limits and Thresholds) (Amendment) Regulations 2013 and the Social Security (Contributions) (Re-rating) Order 2013.

Accompanying explanatory memorandums have also been published by HMRC. Further details are available from HMRC.

Two Budgets about to be scrapped?

Another one of Gordon Brown's great ideas that ultimately proved to be a waste of time!

Tax warning to direct sellers

HMRC is warning anyone selling directly to customers and who haven’t paid all the tax they owe, have one month to come forward and pay up.

Under the time-limited opportunity, direct sellers - often called agents, consultants, representatives or distributors - must tell HMRC about the tax due and make arrangements to pay before 28 February 2013.

Direct selling involves selling directly to customers and taking commission on sales without the need for a shop. It can involve demonstrating a product in a customer’s home or selling at a party. Some agents sell door to door, and many use catalogues.

From today, HMRC will be writing to direct sellers to let them know about the Direct Selling campaign. After the 28 February deadline, HMRC will begin contacting direct sellers who did not come forward to take part in the opportunity, if HMRC believes they owe tax.

HMRC is inviting direct sellers to a live Twitter question and answer session, with tax experts who will answer questions about the campaign, on 7 February, between 1pm and 2pm. Follow @HMRCgovuk and tag questions #dsqa in advance or on the day.

Marian Wilson, head of HMRC Campaigns, said: “Anyone involved in direct selling who has not told HMRC about all of their income might not be paying the right amount of tax. The Direct Selling campaign is a chance to bring their tax affairs up to date, on the best terms. Anyone with questions should join our Twitter Q&A on 7 February, where our experts will be available to help.”

Direct sellers are generally considered to be self-employed, and are therefore responsible for telling HMRC about what they earn, and for calculating and paying their own tax. For information on tax for the self-employed direct seller, visit HMRC or watch the YouTube video.

No win no fee

Creditors pursuing unpaid debts in court will be exempt from new rules on no-win, no-fee lawyers, thanks to legislation introduced by the government.

The exemption for insolvency practitioners (IP) means that payouts awarded in successful cases will not be restricted, as would have been the case before the legal amendment.

Liquidators, trustees in bankruptcy and administrators will all be exempt from a clampdown on the controversial no-win, no fee litigation funding and – significantly – with no time restrictions imposed.

The Association of Business Recovery Professionals, R3, welcomed the exemption that is similar to the one made for defamation cases.

Frances Coulson, R3 council member, said: “The exemption allows Insolvency Practitioners to pursue errant directors who have run off with company funds, or in serious cases, committed fraud. This costs the business community and the taxpayer hundreds of millions of pounds each year. Directors, who act improperly and strip value out of businesses, should not be allowed to benefit at the expense of legitimate business.”

Legislation was introduced to outlaw conditional fee arrangements (popularly known as no-win, no-fee deals), following recommendations made in a government-commissioned report.

Shortfall of accountants

The UK faces a shortfall of 10,200 qualified accountants by 2050, due to skills shortages, an ageing workforce and restrictive migration policy, according to Randstad Finance and Professional, the specialist recruiter.

The UK workforce as a whole will have a deficit of 3.1m by 2050, a figure which represents 9% of the required workforce. Using employment rates from the most recent European population analysis from Eurostat, the statistical office of the European Union, as a measure of demand, Randstad analysed the projected changes in UK population and working age rate for 2050 to establish the gap between employment demand and workforce supply.

The analysis showed that with a population of 74.5m, in 2050 the UK will require a workforce of 35.4m to meet demand. However, with a pool of just 45.1m people (60.5% of the population) forecast to the eligible to work in 2050, even if the employment rate matches pre-downturn levels of 71.6%, an ageing population will leave the UK with only 32.3m people in employment – 3.1m short of the 35.4m required to meet demand.

Despite the shortfall, the accountancy and finance sector is set to fare better than others. Qualified accountants represent 0.3% of the entire UK workforce, assuming this proportion remains constant, by 2050, the UK will have a deficit of 10,200 accountants. The education sector faces the biggest shortfall with the prospect of a deficit of 128,000 teachers by 2050.

Tara Ricks, managing director of Randstad Financial and Professional, said: “If the UK economy is to grow and overcome the difficulties of the last few years then it requires a strong workforce capable of meeting demand. Our projections are conservative but they still portray a worrying scenario for the country over the coming decades. With an ageing population, we need to ensure we are open for business and welcoming talent from around the world to bolster our workforce. Unfortunately, with a stagnant economy and crippling work related migration policy, the UK represents a much less attractive option for both domestic and overseas talent.”