Contractor travel & subsistence expenses, HMRC, and a Ford Cortina

Contractor travel & subsistence expenses, HMRC, and a Ford Cortina

On Remembrance Day I had an appointment with senior officials of HMRC in Parliament St London – a stones throw from the Cenotaph. The meeting was concerning the coding of expenses incurred in travelling to temporary workplaces.

This is of major concern to employees who work directly for an end user and have to fund their own travel expenses, either in whole or in part, from their income. This will not normally concern employees who work through umbrellas or via their own companies as their expenses are reimbursed by their employer and as this website is generally aimed at contractors who work in that manner there may be no direct relevance to individuals but what I have to say is more widespread and may affect us all at some stage.

In 2006 I retired after 39 years distinguished (?) service with HMRC. I hired the Council Chamber of Chester Town Hall for my retirement “do” and there were one or two senior members of staff present. Now, your retirement “do” is the only time that you can say what you feel without fear of any come back at a later date. I did the usual thing of saying that the department that I was leaving was not the department that I had joined etc etc but, with the utmost sincerity, I said that the one thing that had upset me more than anything else was the deterioration in the standard of service that was being provided for the general public.

On and off for a number of years I managed the HMRC office in Chester and of particular concern to me was the level of service that we provided to the general public. I was of the opinion that a person could telephone without actually leaving their armchair – to write and post a letter involved considerably more effort but if a person took the time to leave their home, to travel into Chester and to call in at the office then I was of the opinion that the least we could do was to respond promptly by providing that person with the best possible service. Over the years leading up to my retirement in 2006 that standard of public service was in decline.

In my retirement speech I said that my aim had been for Chester to provide a service equivalent to the football Premiership Division but unfortunately the then current standard of service was now Fourth Division – Chester and District Sunday League. Those were my words and they didn’t go down too well with the senior officials present but – tough – unfortunately that is the way it was – my main concern was that the fourth division of the Chester and District Sunday League would accuse me of dragging their reputation down by likening them to the tax office service to the public.

Back to the meeting at Parliament St last Wednesday – it became apparent that a new HMRC computer system (hereinafter referred to as “it”) is being introduced as from 6 April next year and will have, built into “it” certain, but limited, parameters. “It” will not, for example, recognise that a person has changed employment. “It” will know that a change has occurred but “it” will not take that into account when determining the PAYE code.

This can have a serious affect – for example – you work directly for an end user and incur allowable, but non-reimbursed, travel expenses of £10000 in 2009/2010. In September 2010 you submit your 2009/2010 self assessment tax return containing that claim – your 2010/2011 code (the code for the following year) will be amended to include £10000 expenses even though you may have changed jobs and are not incurring travel expenses. Your code will be amended just the same and the onus will be on you to ring the tax office and get them to put it right – except they have already got it wrong. Say you are liable at 40% and the code change happens in October – half way through the tax year – you will get a repayment of £2000 to which you are not entitled. If you let it run throughout the year you will get tax relief of £4000 – you will be £4000 underpaid and HMRC will want it back.HMRC are public servants but this, in my opinion, is not serving the public and when I pointed this out to the HMRC reps present and compared it with what happened years ago when the public were served I was told that HMRC do not provide the Rolls Royce service that they provided in the past.

I was told that HMRC staff have been cut to the extent that standards have had to drop and that the new computer will mean that even more staff can go ……..When I had overall charge of the public counter at Chester I aimed to provide a Rolls Royce service – I think that most of the time we did very well – it was workmanlike and on the whole more than met expected standards – probably a Ford Cortina. What HMRC have now isn’t Rolls Royce – it isn’t a Ford Cortina – it isn’t even a push bike with a motor – it’s a pogo stick..

© 2009 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Ford Cortina GT by johnrobertsheperd

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