MPs criticise 'smug' HMRC over debt recovery plans
HMRC directors are complacent, smug and are proposing powers that go against the principle of the Magna Carta, MPs claimed. Senior managers were due back for another grilling at the PAC on Wednesday 16 July.
The criticisms were made by the Treasury Committee when they questioned HMRC leaders including Lin Homer, chief executive and Ruth Owen, director general of tax on Tuesday 8 July.
During the session, which lasted for more than three hours, HMRC faced some tough questioning, particularly about the quality of its phone service.
George Mudie, a Labour MP, said Homer was being "complacent and smug" about HMRC not answering one in five calls to its call centres.
He said: "One in five calls unanswered… that’s old people and worried people who are trying to get through. And every year you dismiss it. When the hell are you going to get to the 93[%] industry standard. And if you don’t get to [this target when are you going to] put some resignations on the table?”
Homer denied that HMRC was complacent about not answering calls (a common complaint among accountants including Accounting WEB columnist Philip Fisher) and said it was improving its phone service.
MPs also raised concerns about HMRC's proposal to allow it to take money owed to HMRC direct from their bank accounts.
John Thurso, a Liberal Democrat MP, said the proposal to take tax debts from the bank accounts of an estimated 17,000 people went against the principle of the Magna Carta, a document in 1215, which aimed to protect citizens' rights from the king
Homer defended HMRC's proposal, arguing that it was a fair and efficient way to collect tax owed.
"[There are] around 17,000 people who don’t dispute the the fact that tax is due, they just don’t pay and we will have written to them and engage with them and they just fold their arms and wait for us to to take other action," Homer said.
The cost in time and money of going to court will often outweigh or seriously diminish the tax collected, she said.
Tax authorities in other countries including the US and France have similar powers for collecting debts from bank accounts to those proposed by HMRC, she said.
MPs also asked how low morale at HMRC is affecting workers' performance and recruitment.
Homer admitted that worker morale was low but said that its workers' performance within Whitehall was "second to none".
One problem has been that there has not been "a lot of love" for for the "overall organism", of HMRC which created in 2005 by the merger between Inland Revenue and Customs & Excise, Homer said.
Homer was confident and unruffled when answering the committee's questions.
She may face a tougher time on Wednesday (16 July) when she appears before Margaret Hodge's Public Accounts Committee.