Contacting the inspector?

Eion Riggs was completing simple claims for a group of individuals, and was frustrated at having to deal with junior staff within HMRC, as explained in his query [1] of 22 August 2007. Eion wanted to speak to/call on an inspector of taxes to discuss the nature of the claims and to agree a criteria for making the claims. However this had not been possible.

Eion had called the HMRC enquiry line at his local tax office, but they could not put him though to an inspector. He also tried making an appointment at his local tax office, but no inspectors were available. While at his local tax office he was put through to a technical inspector 200 miles away who was sympathetic but was unable to help. Advice from members was required as to how to work within the HMRC regional call centre administration.

It later emerged that the issue at stake were claims under section 336 for a whole group of employees in respect of tools purchased privately for work purposes, but not reimbursed by the employer. Eion was not also acting for the employer. The first claim, involving his brother, took 12 months to be agreed due to misunderstandings by HMRC junior staff and the apparently usual six week delay in opening the post.

Eion was now in the process of preparing several hundred claims under the same criteria, and wanted to find a way to reduce the administrative time of both HMRC and himself in dealing with the matter. The claims were all for the same type of tools, were backed up by invoices, and confirmation was supplied by the employer showing that the tools were necessarily required in connection with the employment. Eion wanted to challenge the disallowance of a toolbox, in which the tools were stored, and had a detailed argument that he wanted to put to an inspector. Employees in the industry are not highly paid, earning between £15,000 and £20,000. There is a flat rate allowance of £85, presumably given in the PAYE coding, but the actual expenditure amounts to between £250 and £1,000 a year.

‘Sally’ had a mole within HMRC who was astounded that telephone calls had not been passed on by revenue executive officers to an inspector. That is what should have happened. However each claim had to be dealt with individually, and bulk claims would not be accepted, but receipts would not be required. Sadly, this type of claim is regarded as ‘low priority’; and delay can be expected. Sally suggested that a way round the current problem would be to ask for a PAYE coding adjustment in the current and future years.

‘Mike’ had left HMRC three years ago. He suggested that Eion should get the Employer’s Unit of HMRC to agree a coding adjustment for that type of employee with the employer.

Alan Gibson took another angle and suggested that short self assessment tax returns should be submitted for each relevant employee, as well as making the request for coding changes. Eion had disclosed that the first claim was for his brother, and therefore all the other relevant employees should be dealt with by the same tax office. This course of action would cost a bit, but if claims were made for all in date years there should be a reasonable repayment due, out of which Eion could charge his fee in each case. The net result will be that the revenue will wish that they had responded more quickly to Eion’s request in the first place.

This case illustrates a number of principles. The first is that HMRC is a large bureaucratic organisation. The second is that the affairs of employees taxed under PAYE are a low priority, unless they are ‘highly paid’. The third principle is that communication personally with any member of HMRC is extraordinarily difficult.

One is tempted to ask if Eion is a member of a professional institution, and whether that institution could raise the matter in their negotiations with HMRC. To be really cheeky, a personal letter to Dave Hartnett outlining the facts might stir those at the top of HMRC to have some understanding of what is happening at the coal face!

Newth Talks Tax Archive [2]