Advisers call for HMRC reform after huge data loss

The taxman should face a duty of care to taxpayers, and face a formal
enquiry, following the revelations that it has lost millions of records of child
benefit claimants, said advisers this afternoon.

After the shock announcement that vast swathes of confidential bank details,
names and addresses have been lost, advisers said HMRC should be made liable to
pay compensation in such instances.

‘HMRC rarely has to compensate the taxpayer, no matter how much damage has
been done – this simply cannot be allowed to continue,’ said PCG managing
director John Brazier.

The ICAEW has asked for a formal inquiry into the disaster. ‘We think that
there needs to be a formal and independent inquiry into this incident,’ said tax
faculty head Frank Haskew. ‘The lessons need to be learnt so that this does not
happen again.’

ACCA chief executive Allen Blewitt took the opportunity to lay some of the
blame of the latest problem on the department’s move to a more aggressive
approach to individual taxpayers following the merge between the Inland Revenue
and Customs & Excise.

‘While it performs a crucial, intricate and difficult job, HMRC has too much
to achieve in too little time with too many customers. The working culture of
the organisation needs improvement,’ said Blewitt.

‘ACCA’s practicing members say that the aggressive and investigative
mentality of Customs & Excise has triumphed over the Inland Revenue’s
traditionally more measured approach in the merged HM Revenue & Customs.’

While advisers accepted that HMRC chairman Paul Gray was right to resign, his
departure was disappointing because he had begun to achieve some headway in
improving customer service.

‘While it is true that customer service has been particularly poor
throughout 2007, steps are now being taken to make meaningful improvements at a
time of continuing reductions in staffing levels and rationalisation of the
property portfolio, and that reflected Gray’s common sense management style,’
said Smith & Williamson national tax director Richard Mannion.

Baker Tilly head of tax, George Bull, said Gray had done ‘great work’ but bad
practices obviously still occurred within the department.

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