A commons Treasury committee meeting last week provided fascinating insight
into the negative effect of HMRC’s efforts to meet targets upon advisers, and
morale levels of its own staff. Advisers warned that
HMRC’s restructuring and
efficiency targets had led to more work for accountants that was hard to justify
passing the cost down to their clients.
Frank Haskew, head of the tax faculty at the ICAEW, said the institute’s
initial research into lost chargeable time by advisers due to issues with HMRC’s
services could be as much as £100m a year. While the figure was not ‘hard and
fast’, more research into the effect of problems with HMRC services could be
undertaken across the tax bodies, and even on a regular basis.
‘It describes an order of magnitude of what the real figure might be. It’s
given us a taster for doing it on more depth, and perhaps on a regular basis,’
John Whiting of the CIoT said HMRC took longer to process routine requests as
there are fewer ‘frontline staff’ to handles advisers’ queries: ‘They’re taking
longer to do the relatively simple things like VAT registrations or checking tax
coding notices,’ said Whiting.
‘There is good dialogue with HMRC, but it comes back to an acceptance that
there’s a tri-partite interaction between advisers, taxpayers and HMRC, things
must work for all three in different ways,’ he added.
There were also calls for more email communication between HMRC and agents.
Civil service unions said morale among HMRC staff was low. ‘Staff feel
undervalued,’ said Peter Lockhart, HMRC group secretary, PCS. ‘Our members feel
there isn’t a great deal of certainty or future.’
Secretary for the Council of Civil Service Unions Charles Cochrane argued
that the Gershon efficiency review suggested no further job cuts across
government after its completion in 2008, yet HMRC was set to lose another 12,500
jobs between 2008 and 2011.
HMRC’s Paul Gray said that the extra job cuts lined up by 2011 were his own
target, designed to meet the government’s spending review targets for that
period. He added that the department was even slightly ahead of its target to
shed 12,500 jobs by 2008.
He also revealed that 1,800 HMRC staff had been turned down for voluntary
redundancy as their skillsets were required by the department.
‘They are frustrated they’ve not been retired because we need people in some
positions,’ said Gray.
Last week HMRC also released its findings into its controversial
interventions programme. A number of taxpayers were investigated by the
department despite being promised that non-participation in the project would
not result in further investigation.
HMRC admitted in documents summarising and evaluating last year’s
interventions project that ‘less than 20’ non-participants were referred for
further enquiry, even though participation was voluntary.
‘Procedures were put in place to prevent further recurrence,’ the report
Grant Thornton senior tax partner Mike Warburton said the enquiries would
discourage taxpayers from taking part in the future.
Does Darwin's theory apply to taxation? Colin ponders...
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