How is your HMRC experience.................... ..

[dazzer6666]

No offence but whoever set the programme up to link NIC with Income Tax has totally ****ed up.

Yer systems cant cope with people who hit the Max NIC at one source of income but who have a secondary source of income.

HMRC systems still charge the secondary source to NIC - Now they are using internal workarounds to correct this after they alter taxpayers lodged ITRs. And they are only doing it when challenged by Accountants and Agent, a lot of whom don't even notice it themselves because many are not up to speed on NIC issues.

When you consider that Software manufactures can get the computations correct but HMRC cant get their own systems to calculate correctly, it is a sad state of affairs. Especially when HMRC have to agree the contracts for the programmes beforehand.

They signed off on the Accountants software programmes and then got their own programmes wrong.

And here in lies the problem and wait for the backlash - Anyone who filed using HMRC systems and who hit the max NIC at one source will have potentially pay too much NIC. Surprises me that the Press have not been all over this yet.

And anyone who has an Accountant who is not well versed on NIC issues are overlooking this as well.

So anyone who has more than one source of income with both of them quite high should check their calculations again especially if their secondary source has been charged to more than 2% class 4 NIC because HMRC don't seem to be holding their hands up publicly to this YET.

Interesting - Accountant I was chatting to at the weekend said exactly this too - and that the basic SA software was nowhere near as user-friendly as the package he uses,

 

[Gazwag]

No offence but whoever set the programme up to link NIC with Income Tax has totally ****ed up.

Yer systems cant cope with people who hit the Max NIC at one source of income but who have a secondary source of income.

HMRC systems still charge the secondary source to NIC - Now they are using internal workarounds to correct this after they alter taxpayers lodged ITRs. And they are only doing it when challenged by Accountants and Agent, a lot of whom don't even notice it themselves because many are not up to speed on NIC issues.

When you consider that Software manufactures can get the computations correct but HMRC cant get their own systems to calculate correctly, it is a sad state of affairs. Especially when HMRC have to agree the contracts for the programmes beforehand.

They signed off on the Accountants software programmes and then got their own programmes wrong.

And here in lies the problem and wait for the backlash - Anyone who filed using HMRC systems and who hit the max NIC at one source will have potentially pay too much NIC. Surprises me that the Press have not been all over this yet.

And anyone who has an Accountant who is not well versed on NIC issues are overlooking this as well.

So anyone who has more than one source of income with both of them quite high should check their calculations again especially if their secondary source has been charged to more than 2% class 4 NIC because HMRC don't seem to be holding their hands up publicly to this YET.

There is also an issue with Class 2 NIC. Now that its part of the SA liability despite the fact that its SELF assessment I have had a few cases where the £145.60 charge is correctly on the return but it gets deleted from the HMRC calculations so the tax payer isn't charged it. Apparently its due to two different computer systems being used still. Only way to get round it is to re-register as self employed even if a client has been self employed for ever.

 

[knocky1]

Found it interesting that they have added the info. on personal State Pensions on the on-line Self Assessment this year. Shows how many years fully paid, how many missing and the projected pension receivable. Up from 30 years to 35 years. Still a few missing on mine as only voluntary NI required on my income of last 20 years. Need to do some calculations based on life expectancy and the £3,000 I could voluntarily pay. Mrs K would be mad if I died before 68 and paid the 3 Grand for nothing.

Don't pay voluntary Class 3 contributions. They are about £15 per week. Start a small business with small profits just enough so you can pay Class 2 at £2.85 pw, with no tax to pay on the profits, to catch up on your missing years

Thanks that is just the advice I need. Unfortunately we have just sold off three properties and now only have income from one. I presume that is certainly not enough to say I am employed in running a letting business? I do not wish to build up the portfolio at the moment.
A small business such as gardening could be started but as I have an aversion to working for other people what would be the lowest profit I would have to make to pay full NI 2 at £2.85 for the 52 weeks?

 

[NooBHA]

Thanks that is just the advice I need. Unfortunately we have just sold off three properties and now only have income from one. I presume that is certainly not enough to say I am employed in running a letting business? I do not wish to build up the portfolio at the moment.
A small business such as gardening could be started but as I have an aversion to working for other people what would be the lowest profit I would have to make to pay full NI 2 at £2.85 for the 52 weeks?

No sadly you cant pay Class 2 NIC on rental income. NIC is not payable on Rental income.

You don't want the sale of Properties to be treated as a business. You would lose Capital gains exemptions

It cant be hard to come up with a small source of self employment. Even if it is buying and selling on ebay at virtually the same price. You have the option to pay the class 2 even if you don't break the LEL (Lower Earnings Limits)

 

[NooBHA]

There is also an issue with Class 2 NIC. Now that its part of the SA liability despite the fact that its SELF assessment I have had a few cases where the £145.60 charge is correctly on the return but it gets deleted from the HMRC calculations so the tax payer isn't charged it. Apparently its due to two different computer systems being used still. Only way to get round it is to re-register as self employed even if a client has been self employed for ever.

Yes there is an issue with both class 2 and class 4 NIC

 

[Gritt23]

Imho the self assessment on-line process improves every year. Was a breeze when I did it yesterday. It's a tough gig and generally my experience has been decent and improving

I tend to agree.

Also, the hardest part does seem to be the laborious start in the first year to get registered, validate your identity, then getting teh activation code, and working out where various bits go. But now I've been doing it a few years, it does seem to go a lot more smoothly.

The year I've just filed was a very messy year for my tax, but even so, it seemed to all go pretty smoothly considering.

 

[NooBHA]

The NI regime is managed by Accenture - I don't know that system at all and especially any batch interface with CESA.
If you have two sources of income, just make sure they are both using identical NINO [NI Number] - you'd be surprised ....

LOL

When an ITR is lodged declaring both sources they are obviously declared using the same NI No in the Return - The issue is with HMRC software in that it cannot recognise the UEL (Upper Earnings Limits)

 

[WATFORD zero]

I have to say I think it's quite straightfoward now. I was a software supplier when the government first introduced the Electonic Gateway. As per usual, politicians were making stupid statements, cutting budgets and handing out large contracts to the normal suspects. The poor *******s at the sharp end took all the shit as usual.

However, 10 years on, they seem to have sorted a significant part of it.

 

[maltaseagull]

Always found them helpful and efficient

 

[Grassman]

Always found them helpful and efficient

Well, they efficiently took the cash from my card this morning. The quickest bit of the whole process.

 

[rippleman]

I wouldn't say that they're lenient or compassionate to big businesses. Just spineless and too scared to take them on.

Having worked for HMRC (albeit some years ago) and for the largest professional services firm in the world, you have hit the nail fair & square on the head.

And it isn't going to get better with HMRC insisting that small businesses will shortly have to "file" quarterly using digital software to upload their accounts. HMRC using digital technology! That isn't going to end well. They still refuse to communicate by e-mail!

 

[rippleman]

Ahem ... I work for HMRC .... in their IT department ..... aka CDIO

# prepares for deluge of abuse #

The system you are referring to is called "CESA" [Computerised Environment for Self Assessment] and has been running for many many years and is incredibly robust - what has increased over recent years is the popularity of online SA submissions, and for some reason, folk like to leave it right up to the wire which puts a massive strain on the network [not the CESA system itself].

If you think about is for a moment, the option to do your return quarterly is an all round winner.
Doing a SA return once a year is a mare for many - they can't remember what they did a year ago so its always new / strange to them - doing it once every 3 months will make SA more familiar and less daunting.
If there are any adjustments [either way] these can be identified and settled sooner - the payment should therefore be smaller and thus less "painful".
The load should be more evenly spread through the year rather than big bang in the last week of Jan.
The challenge will be to adapt all payroll systems to churn out quarterly P60s

Believe me, HMRC are currently going through major trauma change as they close the Aspire contract with Capgemini and Fujitsu but there is no doubt they are becoming more "customer focused" with their IT as they strive to deliver a digital tax system. Very different to what they were doing 15 years ago.

Remember too that HMRC is not the bad guy, we only collect what the politicians tell us to collect, no more, no less. If you don't like the tax you pay, the chancellor is the man to "hate".

Last point, I don't work on CESA so can't fix any UTP IDs to favourable mates rates ....

Don't you think that the leap to a "digital strategy" is a trifle optimistic bearing in mind HMRC haven't even got round to using e-mail yet?

And what security guarantees are HMRC providing for their "customers" (sheesh that really does wind me up! Customers have a CHOICE!) forced to use third party software to upload the quarterly returns. I think "none" is the answer. And what consideration is there for the small owner-managed business, perhaps struggling to make ends meet anyway, who have to find the money to buy the new software?

And whilst I agree that to "hate" HMRC is plain daft, not enough is done to provide a helpful and efficient service to its "customers".

 

[Normski1989]

You only have four returns to do tomorrow? I wish! [emoji6]

If only they were four small returns. Each one should really be 5 to 8 hours work... Not sure where I'm going to find 32 hours in one day from.

 

[Official Old Man]

Self employed so yep, deadline day has a different meaning to me.
But let's be honest here. If we keep our books up to date then it should be easy to do the calculations and submit the paperwork at some point between April 2016 and January 2017. As for paying, well you've earnt it so you must have it.

 

[LlcoolJ]

Have submitted about 50 returns today. Only 8 to go.........and the website is crashing.

 

[Springal]

Genuine question, I was previously filling out self assessment but was not required to for last 2 years. I did start doing one as my employer only pays 25p a mile so thought I was owed about £800 or so in business mileage difference. After filling out, but not submitting it seems to think I owe them £2k which is not the result I expected. My tax code changed (down) this year presumably to correct this, but where do I stand. I wasn't asked to fill out a tax return but have one in draft now which says I owe tax.

 

[Shropshire Seagull]

Don't you think that the leap to a "digital strategy" is a trifle optimistic bearing in mind HMRC haven't even got round to using e-mail yet?

And what security guarantees are HMRC providing for their "customers" (sheesh that really does wind me up! Customers have a CHOICE!) forced to use third party software to upload the quarterly returns. I think "none" is the answer. And what consideration is there for the small owner-managed business, perhaps struggling to make ends meet anyway, who have to find the money to buy the new software?

And whilst I agree that to "hate" HMRC is plain daft, not enough is done to provide a helpful and efficient service to its "customers".

And yet you claim to have worked for HMRC ?

Must have been a very long time ago that you worked for HMRC if it was pre-email - the typing pool for memos and letters went in the late 80's like most other organisations. Were you EDS @ Barrington Road per chance?

HMRC take security VERY seriously - I'm not going to go into any details [OFA] - but I'm only aware of one major breach [child benefit recipients] in the last 15 years. Given the petabytes of data, across multiple data-centres, that need looking after, that's probably not a bad effort.

It might not always be obvious to the tax payer [you and I] but I assure you the HMRC direction now is to make paying tax as easy and as simple as possible - unfortunately, successive governments post Thatcher have significantly added to the complexity of tax tariffs - each attempting to be more specfic in its targeting - think of Stamp Duty as a prime example - was a single flat rate in the 80's but now has multiple tiers. Same has happened to many personal and business taxes - as tax gets more complex, its a real challenge to try and keep payment methods simple for the man in the street to pay quickly and easily. Especially when there is always a reluctance to "play ball".

Others have already said above, if you keep you books tidy and do your SA return early Jan [9 months after year-end], it should be a breeze - certainly easier online than paper returns? If you have complex personal tax affairs and chargeable events - maybe wise to seek professional help before Jan. But so many seem to enjoy the last minute rush ....

 

[NooBHA]

Having worked for HMRC (albeit some years ago) and for the largest professional services firm in the world, you have hit the nail fair & square on the head.

And it isn't going to get better with HMRC insisting that small businesses will shortly have to "file" quarterly using digital software to upload their accounts. HMRC using digital technology! That isn't going to end well. They still refuse to communicate by e-mail!

And quite rightly so............It would leave their systems even more open to hacking. Some Admin Assistant or Non computer savvy Inspector clicking on a corrupt link that gets sent to them.

Also comprimises Taxpayers as well. Have you seen how many scam emails there are out there claiming to be from HMRC ?

 

[knocky1]

No sadly you cant pay Class 2 NIC on rental income. NIC is not payable on Rental income.

You don't want the sale of Properties to be treated as a business. You would lose Capital gains exemptions

It cant be hard to come up with a small source of self employment. Even if it is buying and selling on ebay at virtually the same price. You have the option to pay the class 2 even if you don't break the LEL (Lower Earnings Limits)

Thanks for your advice. Will save me almost £5,000 making up 9 years to get to 35 years and somewhere around £2,750 to take the wife's contributions up to 35 years. May ring them up to see if they will give me a full year or two for my PGCE in 91/92 and a Degree sandwich year spent in Australia in 82.

Will chat with friend who is an accountant about the EBay venture and NI. Thanks again!

 

[LlcoolJ]

Two clicks to submit the last return............and it's totally fallen over now. I just want to go downstairs and watch the frikkin football.