HMRC cuts wasting advisers' and clients' valuable time

STAFFING CUTS at HMRC are causing hours of wasted time for small and medium sized businesses, the Commons Treasury select committee was told.

Chas Roy-Chowdhury, head of taxation at the ACCA, told the MPs that the 25% staffing cuts that occurred after the merger between Inland Revenue and HM Customs and Excise in 2005 “were not helpful”. He said there was a fear about the implications of the further cuts of 25% proposed. HMRC’s contention that there had been no reduction in quality of customer service was “nonsense”, he added, and there was a perception that HMRC staff are not fully trained and “are not tax people”.

Paul Aplin, chairman of the Tax Faculty Technical Committee at the ICAEW, warned that many of the staff at his south west firm (AC Mole & Sons) spent much of their time dealing with simple enquiries with HMRC.

“The experience with the HMRC five or six years ago is completely different to now. To get a relatively simple thing done, like changing a tax code, would have taken a phone call. Now it can take months. In that period, I have to waste HMRC’s time and my clients grow frustrated.”

Richard Baron, head of Taxation at the Institute of Directors, said that 37% of its members said that HMRC had a “poor or very poor” understanding about their business.

Aplin warned that the situation “is not as bad as it is going to get”. He added that further cuts are undermining trust in the tax system, which could lead to greater tax leakages.