Do we need an HM Inspectorate of Constabulary ..

.. equivalent for HMRC?

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In the news today, for delivering a damning set of warnings, His Majesty’s Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS) may be a bit of a mouthful but it oversees, inspects and reports upon the efficiency and effectiveness of all Home Office police forces (plus other forces and agencies by invitation).

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The HMICFRS report says: "Time is running out if the police and the government are to restore public trust in policing ... police are failing to keep up with rising demand from the public and too often are not doing the basics right."

"I can't recall a time when the relationship between the police and the public was more strained than it is now," Mr Cooke (the Chief Inspector of Constabulary) said, noting the difficulties in vetting new recruits and the inexperience of a workforce which lost many established officers during David Cameron's time as prime minister.

He called on Home Secretary Suella Braverman to grant new enforcement powers to enforce compliance with the Inspectorate of Constabulary's recommendations by the end of this year - citing examples where Forces had taken too long to respond to recommendations made in the 2016 State of Policing report.

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Obviously the specific actions (and inactions) are different, but am I the only one to see a direct parallel with the status (and declining state) of HMRC?

Isn't it time for a creation of a similar body to "inspect and report upon the efficiency and effectiveness" of HMRC - particularly its tax collection arms and their (lack of) interaction with taxpayers/agents?  Even a toothless, but official, body would shine some light on the rusty recesses that pass for patched-up systems ... and as with HMICFRS it might even gain some enforcement powers if there is a change in government.  Does anyone have the ear of Starmer or his colleagues?

[N.B: that last point is not partisan politics, just a reflection that a change in government (as with a change in a business' CEO) is often the catalyst that allows other changes .. if only to show that they're different].

Replies (15)

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By David Ex
09th Jun 2023 11:28

Have any of the inspection quangos ever brought about improvements in the organisations they inspect? Genuine question though I am biased in assuming the answer is no.

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Replying to David Ex:
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By Hugo Fair
09th Jun 2023 12:18

Well it can be hard (in the absence of said quangos being given enforcement powers) to differentiate between cause and effect ... but there have been quite a few where recommendations are actually implemented (not just 'noted for consideration in the future').

And then there's the 'is zero the absence of a value?' conundrum.
Even harder (actually impossible) to prove but there are likely to have been some potential policies/decisions that were put forward - before being canned on the basis that it won't play well with the relevant quango (who tend to have good PR contacts).

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VAT
By Jason Croke
09th Jun 2023 11:38

The Public Accounts Committee (PAC) is meant to be the body that keeps HMRC in check, but it's powerless, only being able to raise the questions and then listen to the entirely made up nonsense from HMRC and the PAC don't question the stats or probe deeper....bit like PMs Question Time on Wednesdays, ask a question, smug jokey reply with incorrect facts and move onto next question please, nobody says "hey stop, those figures aren't correct" but box ticked, question asked, move on.

I am fully in support of an Inspector of the inspector of taxes, but even with the Inspectorate of prisons or Police, even they are just pointing out stuff, they cannot force change and absolutely nobody will be sacked and zero motivation to change, so it just ends up being another waste of space like Ofgen or Ofwat, there to wag a finger and tut-tut but so what?

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Replying to Jason Croke:
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By Hugo Fair
09th Jun 2023 11:59

Fully agree both that PAC is supposed to occupy (some of) that role ... and that it is essentially toothless (even if it occasionally generates 'interesting' headlines).
But it has a core weakness that I hope would not be shared by an Inspectorate - in that it only meets to a limited schedule and gives loads of prior warning of questions that might be seen as awkward.

A full-time Inspectorate (appointed independently) should have a permanent team of employees who between them have relevant expertise in various taxes and in the associated reporting/collecting processes.
At the very minimum they should have the powers to demand real-time stats from HMRC ... and the platform to publish 'findings' publicly on a regular basis (so that the metrics are consistent and reveal what's actually going on).

Ideally there would be another (and separate) new body - OFFTAX (office for fair taxation?) - whom the Inspectorate could unleash on specific topics for rapid-fire 3-month turnaround of investigation/recommendations for improvement.

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Replying to Hugo Fair:
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By Hugo Fair
09th Jun 2023 12:07

And whilst I'm on a roll ...

... how about giving OFFTAX the power to fine HMRC (if investigations uncover poor adherence to to its own procedures or charter) - with the monies used to fund (a means-tested) service akin to CAB, but specialising in all forms of personal taxation, for those who can't afford representation but are being right royally shafted by HMRC (and then left to moulder as per P.O. postmasters)?

On current performance that would be a very well funded advisory service ... and if HMRC don't appreciate being fined then (as they so often say to the rest of us) it's in their hands to rectify the situation.

[And of course professional advisers would be able to focus on those with greater needs and deeper pockets ... whilst hopefully finding that HMRC slowly start to mend some broken systems].

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Replying to Jason Croke:
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By AndyC555
09th Jun 2023 15:32

"only being able to raise the questions and then listen to the entirely made up nonsense from HMRC"

To be fair, when PAC and HMRC meet, the nonsense flows in both directions.

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By Tom+Cross
09th Jun 2023 12:26

Surely the question is: which Government department is meeting its obligations and expectations, in a satisfactory manner?
I’m edging towards - none!

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By taxdigital
09th Jun 2023 13:18

HMRC's problems are not about lack of internal discipline; it's about lack of vision.

With an aging population, HMRC have been losing experienced staff through retirement for nearly a decade now. Post 2008 financial crisis, as austerity measures started biting, HMRC too had to find savings and the axe naturally fell on recruitment. Overall, they're left with not only far less staff, but far less staff with expert knowledge. The staff morale too is very low given all the bad press they get everyday. They can't attract the best talent in tax as they can't afford to pay market rates. An inspector nearing retirement age gets something like £80k?

Also bear in mind that unlike NHS, or businesses in general, HMRC cannot bring in people from overseas! Trained staff come up through the ranks.

So, the problem we have is unlikely to go away anywhere in the near future as there is no quick fix available for trained staff shortages.

But they could definitely try some interim measures:

1. Work with the members of the main tax and accountancy bodies and give them access to clients' data. This was what was promised with their original agent strategy proposed about a decade ago. Depending on success HMRC should go further down this road and engage with the prof bodies. This step may alone ease some pressure on the ADL.

2. use e-mail (encrypted if you like) as the default medium of communication at least with agents. The so-called digitally focused HMRC still getting stuck in an analogue age is laughable! Most of the tax authorities across the world communicate through e-mails.

So, having a chief inspector is unlikely to solve any of their problems; what they need is a large number of well-trained officers, higher officers and inspectors with expert knowledge which is hard to come by.

May be time for robots (AI) take over?

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Replying to taxdigital:
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By Hugo Fair
09th Jun 2023 14:11

I don't disagree with any of your analysis (I doubt that many would) ... BUT my point (or suggestion if you will) was NOT about "solving any of their problems".

It was about introducing some more direct accountability AND removing the ability for HMRC to restrict their public observations to non-answers (currently safe in the lack of ongoing/regular questioning).

It's not a quick win or guarantee of improvements, but should (however slowly) apply the pressure of public opinion for changes (including those you mention).

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Replying to Hugo Fair:
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By taxdigital
09th Jun 2023 16:08

Hugo Fair wrote:

It was about introducing some more direct accountability

Of course, there should be accountability.

If HMRC can be the force behind the legislation making senior accounting officer of large companies 'PERSONALLY LIABLE' for non compliance
https://www.legislation.gov.uk/ukpga/2009/10/schedule/46

charity begins at home; all the animals sitting atop this food chain must be held accountable for the current state of affairs and be interviewed by the MPs:
https://www.gov.uk/government/publications/hmrc-organisation-chart/hmrc-...

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Replying to taxdigital:
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By Hugo Fair
09th Jun 2023 19:41

That org chart (or rather the 'hierarchy list' that it is really) is quite wonderful in an Alice in Wonderland kind of way. I've never seen so many 'champions'!

[My father-law, from Lancashire, would have been astounded as that's not what he had in mind when he described something as being champion].

Oh, and 104 Directors below Board level is probably the simplest stat to illustrate the decrepitude of the organisational beast.

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Replying to taxdigital:
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By AndyC555
09th Jun 2023 15:35

The rot started in HMRC in 1997.

Have I mentioned I left HMRC (or rather HMIT at the time) in 1997?

That was shortly after the announcement that henceforth, taxpayers were to be referred to as customers.

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By John Kat
10th Jun 2023 10:19

For "customers" they really should have been honest and used the term "victims".

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Replying to taxdigital:
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By RetiredTax
09th Jun 2023 17:14

"an Insp'r nearing retirement age gets £80k"
That might be a senior Insp'r but not the majority. There are many grades of Insp'r. An Insp'r friend - recently retired had not had a salary increase for a number of years due to the way the "total pot" was distributed -- part used for lower pay staff & increments.
The reorganization of the Dep't has meant many jobs being moved many miles to large offices -- e g. in E Anglia many jobs are now in Yorkshire or London! Is it not surprising that staffing has low morale?

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Replying to RetiredTax:
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By whitevanman
10th Jun 2023 14:16

I'm not sure what level of Inspector would get £80k and this perhaps says a lot about the problems, not least the perception of those who regularly criticise.
A "basic" grade Inspector would be lucky to get £35k. A fairly senior one might be on a "scale" with a max of £56k (ish). But there is no realistic possibility of getting up that "scale". So most will be stuck around the £45k mark. So about 55% of what some people seem to assume.
Between 2008 and 2017 most experienced staff would have had pay rises totalling 6% (or less) whereas official inflation rate for the same period ran at about 28%.
Perhaps the real problem is "pay peanuts..."

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