Advisers agree with NAO's concerns with HMRC

Advisers have flagged up their own personal experiences of problems at the
taxman, after the National Audit
Office criticised its backlog of unresolved cases.

Tax specialists cited problems with the construction industry tax scheme,
variable quality of advice and a lack of joined up thinking.

“One client of mine is owed over £60,000 in
Construction Industry
Scheme (CIS) tax. The client is chasing and so are we but nothing
appears to be happening. They are being asked to do lots of extra work but
funding it will be a problem without this cash,” said Nick Forsyth, a partner at
Lambert
Chapman.

“Banks take a lot of stick for failing to deliver. HMRC is also a banker to
many small businesses so it has a responsibility to collect effectively from
those who owe and repay those whose deposit accounts they manage.”

Ellacotts
tax partner Alan Boby said that once a case fell into the backlog, he thought it
would take much longer to deal with than a case that could be resolved
relatively quickly.

“More up-to-date cases are given priority,” said Boby.

“Furthermore, there is clear evidence that particular tax offices are
struggling with resources (for example those dealing with non-residents) and so
anything out of the ‘main fairway’ is much more likely to sit in the ‘long
grass’.”

David Challenger, partner,
Watts
Gregory, said: “HMRC is struggling generally and the system is not
‘joined up’, with debts being chased by one department without reference to
system notes causing aggravation between us and clients who have been advised on
what should happen.”

An HMRC
spokesman said in response: “The introduction of a new computer
system will go a long way to making the amounts of tax deducted at source more
accurate. But we have a lot of work to do to deliver the quality of service to
which we are committed.

“Just like every government department we are going to have to do more with
less, and yesterday’s [Wednesday’s] report will help us to focus on those areas
of our business that need to improve.

“Most tax refunds are made within in a couple of weeks, some may be slightly
delayed for additional security checks but this is to protect all taxpayers by
ensuring we only make refunds to those who are due them.

“We don’t consider it’s ‘unreasonable’ to expect people to pay their tax in
full and on time in order to fund the UK’s vital public services.

“Where an individual or business thinks it will have difficulty paying its
tax, the most important thing is to contact HMRC straight away – things never
get better by being left or when HMRC notices to pay are ignored. The sooner
people contact us the sooner we can begin working with them to find a solution.
”

Further reading:

Overpaid
tax could run to £3bn

Read
HMRC’s annual report