‘INADEQUATELY FUNDED’ HMRC should be the subject of a thorough government review, the president of the ATT has urged, just 24 hours after a damning report into HMRC exposed gaping holes in its customer service department.
ATT president Michael Steed warned that an under-funded and under-staffed HMRC will continue to produce an “inefficient operating tax system” that will be harmful to taxpayers and tax experts alike.
“The here and now”
Commenting on a National Audit report that roundly criticised HMRC’s cost-cutting procedures between 2010-2011 and 2014-2015, Steed said that HMRC should spend less time focusing on future digital projects and concentrate on “the here and now”.
“It is imperative that HMRC ensures that a well-functioning and well-informed service to personal taxpayers is in place before it goes further with digitalisation,” explained Steed.
HMRC cut the number of staff working in personal tax from 26,000 to 15,000 between 2010-11 and 2014-15, according to the NAO report. Some of the problems caused by this loss of staff was supposed to be dealt with through the digitalisation of its services,
“A digitally distracted HMRC is focusing so much on the projects related to the future delivery of services that it has evidently been paying far too little attention to the here and now,” said Steed.
HMRC has experienced recent problems concerning its Making Tax Digital plans. The government department recently put its plans to release consultation documents on digital tax accounts on hold until after the EU referendum, prompting the ATT to urge HMRC to delay the documents by “at least a year”, in order to avoid the ‘huge’ embarrassment to HMRC if the project goes awry.
“Ludicrously long phone waiting times”
The NAO report revealed that between 2014 and 2015, HMRC had to move staff from essential work to maintain PAYE records to help improve service levels in 2014 to 2015, a move which “collapsed” the taxman’s quality of customer service.
However the NAO admitted that HMRC has improved its quality of telephone advice services in recent months.
“We are concerned that even though telephone service delivery has improved, the responses show that HMRC staff lack training on basic aspects of tax and so incorrect advice is too often given to taxpayers,” Steed added.
“The under-funding of HMRC has inevitably taken its toll on HMRC staff. It is to their credit that the front-line staff continue to attempt to provide some form of service to a public that has become increasingly frustrated by ludicrously long phone waiting times and other major shortfalls in service as outlined in this welcome report.”
Responding to the ATT, a HMRC spokesperson said: “Our customer services have fully recovered from their low point with their best performance in years with average call answering times at around 6 minutes. Our digital transformation is also well underway with digital Tax Accounts being used by millions.”
On 13 June, HMRC leaders Edward Troup and Jon Thompson are to appear before the PAC to take further evidence on these issues, as well as HMRC’s crackdown on tax fraud.
At HMRC, Dmitri Surendran was responsible for leading the London team of the offshore, corporate and wealthy unit of the fraud investigation service
Rosamond McDowell looks at key changes to inheritance tax policy, which apply from April this year
Richard Asquith of Avalara looks at the non-tariff barriers the UK will face when selling into the EU post-Brexit
Vernon Dennis of Howard Kennedy LLP explores recent and future challenges faced by the insolvency sector