MPs refute HMRC reasons for poor service standards

PROBLEMS WITH the implementation of the National Insurance and PAYE Service (NPS) was not a convincing excuse for poor service standards at HM Revenue & Customs, MPs have said.

The Commons Treasury select committee, chaired by Andrew Tyrie (pictured), released its report on the administration of HMRC on Saturday. It welcomed HMRC's acknowledgement that service standards have been unacceptable. However, the MPs said that the problems were more wide ranging than those caused by the implementation of NPS.

The issues surrounding service standards have been ongoing for "many years", the report said. The committee was "disappointed" that more work was not done to develop "performance indicators that credibly reflect customers' end-to-end experience", as its predecessor committee recommended in 2007.

There were three main areas of concern in HMRC service standards, the report said: access to advice over the phone; response to post; and offering offline alternatives to online filing and guidance.

HMRC department heads said that the failings in these areas could be put down to problems with implementing the NPS. It became apparent in autumn 2010 that 6 million taxpayers paid the wrong amount of tax in 2009/10 because of the delay in launching NPS, which meant that two tax years had to be reconciled in 2010.

However, the MPs said: "We do not accept the Department's explanation that these problems are primarily the result of reconciling of multiple PAYE tax years at once."

HMRC's claim that £1.1bn worth of savings had been made without negatively affecting performance "lacked credibility", the MPs added. The report said there was "near unanimity among our witnesses" that the decline in service standards was linked to cuts in budgets.

The MPs also called on the government to refrain from making further reductions in HMRC's budget.