To Archive List PageIt's sad but true that when it comes to dealing with money; either grabbing it as taxes or handing it out as benefits; government departments are notorious for making a bog of things . . . as this further example shows

The thing about the Department of Inland Revenue, or HMRC as it now calls itself, is that it has a bad a habit of making things up then insisting that people pay taxes on the basis of a purely invented "reality". Take this example from the 20th century . . .

To the victim's local Inspector of Taxes
4th March
Dear Sir,

There doesn't seem to be a space on this form to tell you that I am operating my business as a sole trader, and using it as a conduit for earnings from all other sources, which do not fit in to the usual "job description" of the company.

Yours sincerely,

To the victim's local Inspector of Taxes
20th March
Dear Sir,

I wish to appeal against both of the income tax demands received; the one for an advance payment for the current year and the one for the previous tax year. I also wish to ask for postponement of the amount demanded which, I believe, has been overcharged.

As I have already informed you, I have been operating my business as a sole trader since its start-up in January last year. The following is a summary of my actual business accounts for my first year of business.

[Infomation redacted]

I noticed that you included my personal tax allowance in the assessment for the current tax year but not in the assessment for the year before that. Would you please include my allowance in any recalculation of your assessment.

Yours sincerely,

Postponement notices received dated 30th March.

From a different tax inspector at the same local office
1st April
Dear Sir,

Thank you for your letter dated 4 March. I should be grateful if you would advise me of the date of cessation of the partnership [name redacted], and when I may expect accounts to the date of cessation.

Yours faithfully,

To tax inspector #2
10th April
Dear Sir,

I refer you to my letter of 20th March addressed to tax inspector #1 of your office.

The business has never been a legally constituted partnership. So there are no accounts to a date of cessation. I have been operating the business as a sole trader since day 1, and all tax affairs related to the business apply to me and me alone.

I trust this letter clarifies the position.

Yours sincerely,

4th May

Two enormous tax demands received from the tax office in Cumbernauld [not the local office]; the documents purported to be "Payment Reminders"

To tax inspector #1
10th May
Dear Sir,

I have just received two documents, which are described as payment reminders, from the tax collection office at Cumbernauld. They were addressed to [company name redacted] at [address redacted] rather to me personally at my home address.

The first is a demand for [data redacted] for the last-but-one tax year and the second is a demand for [data redacted] as a first installment of tax and national insurance for the tax year which finished in April of this year.

The text of the demands says that I have been asked already for the amounts shown. I did receive tax demands from Cumbernauld in March, but for £0.00 and £150.00 rather than the above amounts. I sent an appeal against the earlier assessments to your office and you sent me forms acknowledging receipt and granting postponement of the amounts demanded.

The current demands seem to be based on assumed incomes of [data redacted] and [data redacted] respectively for the two years. I would be grateful if you could explain, under the terms of the Taxpayers' Charter, how you arrived at these numbers as they bear no relation at all to my actual income.

Yours sincerely,

Note: At this point, the self-employed victim of this attempted mugging had just completed his first year of trading. He had not yet sent in a tax return and he was under no legal obligation to file accounts with the Inland Revenue before the end of the calendar year.

From tax inspector #2
17th May
Dear Sir,

With reference to your letter dated 10th May, I have now amended my records to the correct business address of [data redacted]. I apologise for the erroneous issue of tax demands for the two years which are under appeal. The assessments were originally prepared on the partnership on estimated figures in the absence of accounts.

Yours faithfully,

Note: The tax inspectors got themselves into this mess by inventing the partnership and by making "Think of a number" estimates "in the absence of accounts" for partnership accounts which never existed.

Two further guesses as to the amount of tax owed by a sole-trader arrived from tax inspector #1 dated 21st June.

Further postponement notices were received dated 6th July for the "Think of a number" tax demands dated 21st June.

There is no further correspondence surviving, but the victim's tax affairs were sorted out. Eventually. It would appear that there are gangs of tax inspectors, at the same and different offices, who never talk to one another and whose sole occupation is to invent estimates of incomes and threaten people with all sorts of terrible sanctions if they fail to pay up, even though they don't owe the taxman a red cent.

Closing Note: The victim of the above mess retired from self-employment on reaching the age of 65, and informed HMRC of his change of employment status. HMRC now sends him an annual PAYE Coding notice. Apparently, he needs a tax code because "we believe you are currently between jobs", which is another example of a tax inspector making stuff up — which leaves us wondering how many tax inspectors are beavering away, making work for themselves by issuing unwanted tax codes to people who don't need them at vast and unnecessary expense to the public purse.


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