Tuesday 10 February 2015

HMRC End of Year report: "Must try harder"

By Amanda Vigar, Managing Partner, V&A Bell Brown LLP
It was heartening to read that I’m not the only one that feels that the HMRC’s service falls well below what hard-pressed taxpayers (and their advisors) should be able to expect from it. 

At the end of 2014, the Institute of Chartered Accountants surveyed a large number of its tax practitioner members.  Over a third of us felt that HMRC’s performance had declined and over 50% felt it hadn’t changed. The handful that felt it had improved either don’t deal with HMRC very often or have even worse experiences in the past than we have!

The biggest frustration reported is, surprise, surprise: HMRC’s inability to get things right first time.  How many apologies have we heard that they’ve sent out batches of thousands of incorrect or inaccurate letters?  And isn’t it strange that the “errors” always seem to work in HMRC’s favour? I’ve lost track of how often they allocate payments to wrong years or have wrong information about clients – for example counting the same income in two different years or sending out demands for payment in relation to periods before a company was even formed.  Sorting out these issues costs us and HMRC time and, therefore, taxpayers’ (read clients’) money to do this – and it’s simply not necessary!

You can add the costs of: the time we spend on hold on the phone waiting for a response only to be told to ring back another time; the cost of faxing/posting documents because HMRC in the main doesn’t accept or send emails; and the lack of certainty about a taxpayer’s position because of the sheer length of time HMRC can take to respond to correspondence (if in deed they do at all).

The ICAEW tax faculty are of the opinion that HMRC is being starved of resources. Our view is that penny pinching coupled with a dogmatic belief that every taxpayer is trying to “pull a fast one” are costing HMRC dear now and in the long run.  The public needs to have confidence that they get the right answers and they get them when they need them.
As this is election year, I will be looking kindly on whichever party puts forward a commitment to an HMRC Service Covenant – one which puts experienced staff back on the front line who can actually answer queries and which has real teeth when HMRC fail.  That covenant would also make HMRC accountable for the extra administrative costs they inflict on taxpayers.  

It would drag the organisation into the 20th (and no, that’s not a typo) century in terms of communicating with the people they are supposed to be there to serve – and even, maybe, us accountants.

Alternatively, how about a party (beyond our friends in the Monster Raving Loonies) being brave enough to suggest we should put our tax collection system out to tender or introducing some of the consumer choice and competition that they talk about so enthusiastically elsewhere in our society?

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