Deputy fears income tax delays will follow US pact

A TAX transparency agreement with the US will put more pressure on the Income Tax Office, which is still struggling to clear its backlog of returns, a deputy has said.

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Michelle Le Clerc

A TAX transparency agreement with the US will put more pressure on the Income Tax Office, which is still struggling to clear its backlog of returns, a deputy has said.

However, income tax director Rob Gray said the office could cope with added work resulting from the Fatca agreement, which was approved by the States at its December meeting, without disruption to return assessments.

Deputy Michelle Le Clerc feared the pact would lead to ‘teething problems’ and place more pressure on the office.

‘It takes time to settle in,’ she said.

‘The requirement for Fatca will mean there is more information sent out and to collate. I am concerned because we are already behind the processing of assessments.’

Mr Gray said responsibility for the automatic exchange of information lay with the office’s Compliance and Investigation Unit, not its assessing staff.

‘If additional inter-governmental agreements are negotiated, or there are significant additional calls on the team, such as a consequence of enquiries arising from the US, the UK or any other future IGA partner jurisdiction, workloads within CIU will be reviewed to identify whether further staff are required, whether through reallocation or reprioritisation of work,’ he said.

Comments for: "Deputy fears income tax delays will follow US pact"

BadDonkey

And so it begins pressure for compliance from a debt ridden nation that can't even balance its own books.

Tail wagging the proverbial dog. Thanks a lot finance sector !

BadDonkey

I am more concerned about the recent NSA scandals and the right of Data protection of the island than compliance .

BadDonkey

Mr Gray said responsibility for the automatic exchange of information lay with the office’s Compliance and Investigation Unit, not its assessing staff. <<<

Mr Gray FATCA is virtually one way traffic. Exchange is an overstatement.

Matt T

"Without disruption to return assessments'

Is Mr Gray having a laugh? When returns are submitted on line I believe it states they will be reviewed within six weeks. If they need to be manually assessed it will then be 10 weeks. After recently calling the tax office to find out when we will get our return the estimated time frame, from submission to return, is 38 weeks. How in the hell can it take 38 weeks to process a simple personal return?

Income tax appears to be seriously understaffed. Either that or there is something very wrong with this department. I cannot see how Mr Gray thinks the department can cope with extra work when it is struggling so much under the current load.

Toby

As of a couple of weeks ago there were some 12,000 returns outstanding. And there was still a backlog processing the ones that had been submitted.

By my maths that means that income tax can't keep on top of ( at best ) 2/3rds of their expected workload, let alone taking on any more ....

Anders

Do the US provide tax details to other jurisdictions?

markB

I feel that all this transparency is going to be the undoing of the Channel Islands, the UK and USA tax people will be going for everything they can get, especially from the small man.

Jon

Merge SSD and Income Tax, they must duplicate so so much work!

Woeful

Bring back Ken Forman, this Gray character clearly isn't up to the job, it takes weeks or months to get answers to queries that should take minutes or hours, it's a very unfunny joke. Quite why a UK revenue man had to be brought in as head man is unclear, there are many locals who could quite capably do the job, this fella's clearly not right for the job.

PB FALLA

100 % correct unbelieveable that he is still in a job,ive seen him at first hand dealing with people,words cannot explain his arrogance and un professional behaviour.

BadDonkey

Even the staff are sick of him. Get him out.

Tax Office Blues

Unfortunately the current regime under Mr Gray is very focused on the compliance and investigation part of the Tax Office and the remainder of the team do not appear to be making much headway in administering and collection of the everyday tax that individuals and some companies pay.

Interestingly Mr Gray has overseen the introduction of the totally disproportion late filing penalty regime and the also utterly heavy handed surcharge regime. I do recall reading that a very fair chunk of the additional income collected by the compliance and investigation unit of late was indeed penalties and surcharges - and not the additional taxes reaped.

So in a cash strapped Island you can understand why Mr Gray wants to focus his team on compliance and investigations - as that leads to lots of lovely extra penalties, surcharges and tax.

But at what cost?

Certainly the cost to all other taxpayers is that the remainder of the Tax Office seems to be woefully under staffed and also suffer from a lack of training and experience on the job - which means that we all have to wait a lot lot longer for our assessments, we can't get through on the telephone to correct mistakes made, or request a coding, or ask a question, or enquire about how to make a payment…or any of the other every day things that are vital for the smooth running of the tax system. If you send an email to their enquiries address you get a middle finger reply that states something like, 'please be advised that your email may not be dealt with for 3 or 4 weeks if not longer'. In my experience I think such emails go to someone's junk folder - they VERY rarely elicit a response. Customer service award…?

So the tax office are closed to the public on Thursday afternoons at the counter, and closed all day to telephone calls! If in this article Mr Gray is confident that his staff have the time to deal with FATCA then are those staff sitting about twiddling their thumbs at the moment? If there is capacity at ITO will we soon see a re-opening on Thursdays and also see a return to getting your assessment in the same year as you sent the return in?

I doubt it.

HMRC in the UK operate under quite strict deadlines - but the late filing penalty regime or the surcharges (or interest) on late paid tax are a lot less than are levied in Guernsey! HMRC also operate via a taxpayers charter and there are things that they must do and must inform you of within certain time periods - and they stick to them. For example if you file a UK tax return they must tell you within two years that they plan to investigate it or raise a query or similar. In Guernsey they can have your tax return in hand and sit on it for years - and then raise a query up to six years down the line! And it happens in practice because I have seen several cases!

I would like to see some statistics on how many current year and prior year returns have been submitted but not yet assessed by the Tax Office. I am certain those figures would be particularly illuminating about the current crisis the department is in.

I am not on a Tax Office staff bashing exercise - the staff I deal with there are lovely (once I can get through to them). However something is going very badly wrong at T&R and the higher management levels.

In my humble opinion the woes of the ITO can be laid squarely in a few key camps:

Zero ten still causing a LOT of headaches for companies and shareholders - infecting assessments and generating onerous tax bills like a plague. These are very tricky to sort out at ITO and customer level.

ITO will randomly change figures from the tax return to the assessment - meaning they have to spend time on telephone calls explaining the changes.

Dealing with queries on surcharges and late filing.

Dealing with queries in respect of online returns not showing as filed or filed but lost in the ether or taxpayers who simply have not got the first clue about how to fill the online form (or paper form) out.

Payment enquiries and quibbles. Lost payments, cheques to wrong tax reference.

Chasing assessments from returns filed long ago.

Chasing repayments from assessments issued long ago.

So much of this could be avoided with better information on the website, the tax return being better laid out (both paper and online), the ITO being pro-active and writing to you to tell you what they have changed and why, giving online users access to their payments and statement balances - would cut a whack of queries to the collections department. More staff to turn around assessments and a team that makes sure when you are due a repayment you actually get it sent to you!

So come on Gavin St Pier - sort this mess out!

Dan

It took 9 months to receive my tax return which was as simple as it could possibly be. No mortgage, no savings account, no income other than employment. The state of the Income Tax Office is a joke. Why haven't they hired more staff to at least try and keep up with the current load?

VoiceOfReason

Being a tax officer requires a lot of knowledge and the training period can be quite arduous. You cannot get staff in immediately and expect them to make an impact. I believe a new group have just been trained to office standards.

What is happening is a vicious cycle. FTP budget cuts means less overtime which has been the usual way of alleviating the backlog. Pressure on tax officers is increasing and more experienced members of staff have decided it is not worth it and have jumped ship or gone for promotion. This leaves the less experienced staff to fight a losing and often frustrating battle. I guess it also doesn't help that once/if the on-line tax returns become more automated that their jobs will become redundant.

GsyGirl

Well said voice of reason.

Mr Gray has been in the island for almost 30 years so comments about him being a 'UK revenue man' are actually quite inaccurate. 30 years is a pretty large chunk of anyone's career.

markB

And why are income tax sending out Standard letters saying "you haven't submitted your end of year returns" when I full well know I have and so do they.

Covering their backsides that's what it is!.

And Another Thing

'Being a tax officer requires a lot of knowledge and the training period can be quite arduous. You cannot get staff in immediately and expect them to make an impact.'

That maybe so, however it would be nice to receive some level of service on the front line. If you send an e-mail to the tax office, it doesn't even get acknowledged. Or you phone to ask a simple question, only to be told someone will call you back and they don't.

Rustylink

Do we the people of Guernsey really approve of automatically assisting the USA to tax an American citizen who has been resident (perhaps some one's wife or child) in the island for 30 years and has an account in a local bank?

The American way of taxation (we are accepting in accepting FATCA and its like is an assertion of extraterritoriality that precludes the existence of 'no taxation without representation' and undermines or destroys any fiscal independence.

Are we are giving away our island's inherited rights and privileges to facilitate the short-tern activities of some large financial institutions?

Are we seeking short-term advantages (and photos with Cameron) at th expense of our long-term interests?

PB FALLA

I concur

Bring back Ken the peoples champion

Andy

Now we have sold out to the worlds no 1 arms dealer and hypocrite. Banking going fast elsewhere so its back to Farming very soon.