Tag Archives: HMRC

Astonishing: Working Benefit Claimants To Face Financial Penalties If Their Boss Files Tax Information Late


OOB refers to the requirement that payroll data is submitted On Or Before the date employees get paid.

Chaos is on the way for the lowest paid workers as new rules come into force which link payment of vital in-work benefits to employer’s compliance with providing tax information on time.

From this month almost all employers will finally be expected to provide payroll data to HMRC every month as part of the Real Time Information (RTI) system. This change has already been introduced for larger employers but businesses with nine or less employees had been given a 12 month ‘easement period’. That ran out on April 6th this year.

For those on low incomes this payroll data will be used to calculate their entitlement to Universal Credit.  If this information is not filed on time then bosses are warned by the DWP that their workers may: “receive too much or too little Universal Credit”.  This means those with irregular hours and earning patterns, such as people on zero hour contracts, could be left up to several hundred pounds short at the end of the month. For workers dependent on benefits to meet rent payments this could prove devastating. Try explaining to your landlord that you can’t pay the rent because your boss didn’t file their tax return on time this month.  Of course some claimants could also end up receiving too much Universal Credit and not know why – or even that they have – calculations are already breath-takingly complicated.  This will lead to involuntary debt and unforeseen repayment demands in the future.

Perhaps the most chilling problem is that many bosses just don’t care about their employee’s in work benefits. Research published by HMRC late last year found a small number of ‘micro’ businesses had no intention of changing their payroll systems to meet the new requirements – as the quote above this post demonstrates. Many more employers were still confused about the changes, or were not even aware that Real Time Information was being introduced. Others said they could’t afford updated IT equipment to run the software required to manage this reporting system. Some claimed that only one person does the payroll returns and if they are off sick then it doesn’t get done.

When it was pointed to these non-compliant businesses that late reporting would affect the payment of in-work benefits to staff the employers fell into two groups according to the researchers. There were those who said they would strive to comply with the new system so as to not affect their employee’s income. And there were those that were ‘unconcerned’.

In a meagre effort to make them more concerned HMRC have introduced a penalty system for employer’s who don’t provide payroll information on time. It is, as you might expect, a bit of a joke. Employers will not be fined if it’s the first time they’ve filed late that year. Even then they will be able to appeal due to ill health or IT difficulties. And the fine is just £100 for the smallest employers and a trivial £400 for those with over 250 employees. This is likely to be considerably less than the financial penalty that workers could face for their employer’s negligence.

Despite several HMRC reports into the introduction of Real Time Information there appears to be little information being published on how many businesses are compliant with the scheme all of the time. If only a tiny percentage of employer’s file information late – because they are careering out of business anyway for example – then this could impact on the impact of tens, or even hundreds of thousands of people. Errors in the system alone are likely to lead to significant suffering and confusion. For anyone who’s ever had a real job or had to deal with inept Jobcentre busy-bodies the end result is easy to imagine. When payments aren’t correct the DWP will blame your boss and your boss will blame the DWP. The worst kind of employers may just sack workers who get too uppity about PAYE information being filed late. And then possibly lie to the Jobcentre about why they left and cause them to lose eligibility to benefits completely. It is an astonishing amount of power for an employer to hold over their workers.

In the mind of bungling toff Lord Fraud, the unelected Minister for Welfare Reform who helped design this new system, bosses are all wonderful people who would never abuse their staff and always pay their taxes on time. Recent revelations about the UK’s own Prime Minister shows what bollocks that is. But so entrenched is the capitalist class’s delusion of their own fucking wonderfulness that they are now designing administrative systems that depend on this honourable behaviour amongst the rich.

You don’t get rich by behaving honourably though. You get rich by using every tool you can find to dominate and exploit those surrounding you. And as more people are slowly transferred onto Universal Credit then they will be more vulnerable to exploitation and abuse by their employers than working class people have been in generations. Behind all the lies about making work pay and incentivising hard work, that is the real reason for the Tory government’s welfare reforms.

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Tax Dodging Soars Under Tories To Seven Times Entire Bill For Unemployment Benefit

tax-gapDespite Tory claims that they would cut down on tax evasion and avoidance, the amount of tax dodged each year soared by £3 billion to £35 billion in the first two years of this Government.

The tax gap means the difference between the amount of tax HMRC believe is legally due, and the amount lost to fraud, evasion, error, avoidance or simply going unpaid.  The Tax Office last week published the latest estimates for the year 2011/12, although they themselves admit their figures are far from perfect.  Some research has indicated the true figure is around three and a half times higher than Treasury estimates at around £120 billion a year.

These figures do not include the many and varied ways global corporations choose to avoid tax, such as the widely publicised failure of Google, Amazon and Starbucks to pay for the services their businesses depend on.

Even taking the HMRC figures at face value the sums of money involved are staggering.  £35 billion was evaded, avoided, stolen or went unpaid in 2011/12 – £3 billion more than in 2009/10 – the year before the current Government weren’t elected.

The latest statistics show that £5.1 billion was unpaid due to tax evasion, which means illegal tax dodging and a further £4 billion through the slippery forms tax avoidance which HMRC consider is just about legal tax dodging.  To place this figure in context, the amount lost through illegal evasion alone is enough to pay for the entire budget for the mainstream unemployment benefit Jobseeker’s Allowance, and still have change.  The total amount of missing tax is around seven times higher than the entire budget for the dole.  In another stark comparison, the amount estimated to be lost to fraud across the entire social security system was just £1.2 billion in 2012/13.

Most workers on PAYE don’t even get a change to dodge their tax.  For the rich it is a very different story and it is theft every bit as much as a disabled person caught playing golf or a single mum who doesn’t tell the Jobcentre she has a partner straight away.  The thieving rich expect a fire brigade to turn up if their mansion burns down after all, and a police force to help them protect their wealth.  But many of them don’t want to pay their rightful share of the profit they make from our work to pay for them.

To read HMRC’s guess at how much the rich are fleecing us download Measuring Tax Gaps 2013 (PDF)

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The Mass Middle Class Benefit Fraud That Could Soon Cost Us All A Fortune

benefit-cheatsHMRC have reported that up to 200,000 high earning scroungers could face fines for failing to register Child Benefit payments with the tax office.

The cut to Child Benefit for higher earners was one of the first welfare cuts announced by George Osborne, although it has been one of the last to be implemented.  Osborne demanded that families with an earner over £50,000 a year should have Child Benefits reduced and those earning over £60,000 should be stripped of the benefit completely.

In typically bungled fashion the implementation of this cut has turned out to be a bureaucratic shambles.  As well as penalising parents who choose to stay at home with children – dual income families could earn a combined wage of just up to £100k a year and not be affected by the cut – the DWP, who administer Child Benefit claims, have no record of how much Child Benefit claimants earn.

This means that these families will still receive the weekly payment, but will now have to register with the self-assessment system to declare the cash to HMRC who will then take the money away from them in their tax bill.  Unfortunately HMRC do not necessarily have details of whether tax payers have children, which means if people don’t register then they are unlikely to be discovered.

This is why HMRC chief executive Lin Homer said to BBC Radio 5 Live “We think there is about 200,000 people who need to get off their backsides and do something.”

This is the number of people estimated to have failed to register to pay back Child Benefits on Friday (3rd October), just 24 hour before the deadline.

In truth the situation could be far worse than the tax office is admitting.  Those on over £60 grand a year can simply opt out of Child Benefits, as they stand to lose the lot anyway.  There has been no estimate so far from HMRC on how many people in this group have failed to do so.  Most likely because HMRC don’t know.

Yet this group of benefit fraudsters needn’t worry as they can expect to be treated with kid gloves by the authorities.  Whilst there are penalties for those who are caught still claiming when they are no longer entitled, HMRC say that those who don’t bother to register until long after the deadline will probably not be fined.  They are unlikely to face ten year prison sentences, or be named and shamed on the DWP website.  There have been no posters placed on bus shelters in Chipping Norton encouraging millionaire residents to grass up their neighbours.

If the 200,000 people who have not yet registered fail to do so, then assuming they have on average 2 children, this mass scale benefit fraud could cost over a third of a billion pounds a year.  Astonishingly this is more than is lost due to fraud in the main out of work benefits, and around the total amount lost to fraud in the Housing Benefit system.  And it could be the tip of the iceberg.

It says everything about the character of the ‘aspirational’ middle classes that along with the rich they may soon become the largest group of benefit fraudsters.  Unlike those on out of work benefits, who may do a few hours work and not declare it for a similar sum to child benefits, they don’t need the money.  They just want it. And having lots of money, no matter where it comes from, is increasingly seen as the highest form of moral attainment.  Which is why there is one set of rules for the rich, and another set of quite different and draconian laws for the poor.

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Universal Jobmatch Makes A Mockery of Minimum Wage Clampdown

internships_UJEarlier in the year Jo Swinson, Minister for Employment Relations at the Department for Business, released a stern press release in which she declared that:  “Paying less than the minimum wage is totally unacceptable.”

This accompanied a story from HMRC which detailed a £4 million pound combined pay out to workers denied the minimum wage by unscrupulous employers.  Several of those compensated had been working as unpaid interns, the latest fad amongst some employers keen to avoid paying young people a wage.  HMRC have announced that they are fast-tracking investigations into this form of unpaid labour:

“Anyone who believes they are not being paid the National Minimum Wage can call the Pay and Work Rights Helpline on 0800 917 2368. Calls to the helpline from interns, who are working for nothing or for “expenses only”, are being fast-tracked to HMRC enforcement officers for investigation.”

Yet if Jo Swinson wants to track down businesses breaking minimum wage laws then perhaps the first place to look would be the Government’s own Universal Jobmatch website.  This is the website which unemployed people are increasingly forced to sign up for as a condition of receiving benefits and which is riddled with scams, spoofs, sex work and dubious self-employment vacancies.

Nestled alongside the adverts for lap dancers and Mafia drug couriers, the website features a whole host of unpaid work.  Those who are prepared to work for a daily lunch allowance can have the privilege of working full time for this recruitment agency as a ‘volunteer’.  Astonishingly they even expect applicants for this unpaid role to have “previous sales or recruitment experience”.

Other opportunities for people to line the pockets of bosses by working for free include a role at Mansion Estates, London.  This involves working six days a week propping up the profits of an estate agents and ‘may’ even lead to a real job.  It is unclear whether this role is unpaid, or whether it attracts the £500 a month salary listed in the side bar.  Either way it breaches minimum wage laws.  Another London estate agent is also on the look out for free workers.  Simple E14 Ltd are keen to recruit a ‘voluntary receptionist’.

Some of the unpaid work advertised on Universal Jobmatch may be legal, but only if it is part of a recognised Government scheme.  So this position, as an unpaid office volunteer with Aquaseal,seems to be part of the Work Experience scheme and is likely to be legal.  This one however, ten weeks unpaid work for the law firm Adonai Beulah Solicitors, seems to be completely illegal.  You’d think a bunch of solicitors might know better.

Another exciting opportunity is this vacancy advertised by david@sign-meup.co.uk who wants people to spend the Summer working without pay answering the phone, filing and ‘mainly data entry’.  Be prepared to work hard for no wages, the company warn: “You will be set daily targets to meet and be expected to reach that target.”

According to Jo Swinson: “Whenever we find examples of businesses breaking the law we will crack down on them.”

Perhaps she should have a word with Iain Duncan Smith who seems to be aiding and abetting employers who break minimum wage laws on a national scale.  It is not just unpaid workers who are being ripped off by these companies.  The tax payer is paying benefits to fund these unpaid workers whilst the companies are dodging the National Insurance they would have to pay were these workers on wages.  The renegade DWP is making a mockery of the minimum wage laws, and we are all paying the cost.

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