Inquiry finds serious dissatisfaction with UK’s HMRC

There is considerable dissatisfaction among the public and tax professionals with the service provided by the UK’s tax department HMRC to such an extent that it risks undermining respect for the country’s tax system.

A Treasury Committee report into the administration and effectiveness of HMRC has identified serious concerns in a number of areas, including unacceptable difficulties contacting HMRC by phone during peak periods; endemic delays in responding to post; and an increasing focus on online communication that may exclude those without reliable internet access.

The Committee recognised that the Department performs a crucial role and operates under significant external pressures including continuing resource reductions, deficiencies in tax legislation and the legacy of the merger.
 
It acknowledged the commitment of management to tackling these problems and the dedication and professionalism of HMRC staff. However, it concluded that the Department has a difficult few years ahead of it, as it attempts to improve its service to taxpayers and benefits claimants, stabilise the PAYE system and introduce Real-time information.

The Sub-Committee is holding further hearings on HMRC's compliance work, and the Committee may report on this later in the year.

The Committee has made a number of recommendations. It says HMRC could improve the service provided by contact centres, particularly in relation to escalating complex queries and providing alternatives to 0845 numbers.

It suggests providing robust alternative to online contact, including more cost effective ways of providing face to face advice and ensuring greater awareness of the impact of process changes on individuals and businesses, in particular recommending senior staff spend time with tax practices, charities and businesses.

It also recommends that it should ensure reductions in resources are managed in a way that is commensurate with the enabling IT and process improvements and minimises the loss of Departmental tax expertise.

And there should be a review of the division of responsibilities between HMRC and HM Treasury in relation to making tax policy, to ensure practical considerations are taken into account at the earliest possible stage as well as better targeting of letters that threaten serious consequences against individuals.

It says that having the National Audit Office externally audit preparations for Real-time Information should be approves to ensure Ministers can be held accountable for progress against the Government's ambitious timetable and there should be an examination of how the Department can achieve better accountability around the settlement of large tax cases.