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Is HMRC fit for purpose?

30th May 2018
Partner An unnamed firm
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worried business hipster calling HMRC
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AccountingWEB's regular columnist takes a look at HMRC's failure to answer four million calls, as highlighted in its annual report.

I doubt that very many people reading this column would answer the question in its title with a resounding “yes”. Even beleaguered employees of HMRC are frequently heard harking back to the good old days when they were able to do their jobs properly.

The latest blow comes with the revelation in its annual report that last year the department failed to answer four million telephone calls. If that sounds bad, it is only the tip of the iceberg. In addition, 14% of calls took over 10 minutes to answer and then anyone lucky enough to get through was subjected to an additional four minutes of Muzak and messaging before they could speak to a real live person.

I don’t want to be unkind, but judging by my own experiences over the years what we are now talking about are large numbers of phone calls never being answered, those that are answered leading to a frustrating 14 minute wait and, the coup de grace, when you finally hit a human being, speaking to somebody who does not have the training to answer your question (if you can even remember it after the wait).

Without wishing to pile on the criticism, last September that 14% figure rose to 20%, presumably as wannabe taxpayers attempted to call through prior to completing their paper tax returns.

We all know the reason for these astonishing failures. At the behest of succeeding governments, HMRC has cut its staffing to the bone, created low morale which causes its own problems and leads to an even worse service. The excuse from the powers that be appears to rest on the proposition that telephone calls are no longer necessary in a technological world. Unfortunately, the 43 million people who call through every year do not seem to have realised this fact.

That last statistic tells its own story, given that there could not conceivably be 43 million people needing tax advice. It strongly suggests that many gluttons for punishment are making multiple calls, presumably because they can’t get through in the first place or get lousy advice.

It says it all that an HMRC spokesman is boasting about the fact that phone call handling has got much better in that the average response time is now below five minutes. This might be a sign of old age, but I can remember ringing a local tax office and having the phone answered immediately by an individual. That is proper “customer” service. If we run our practices like this, we would not have practices to run.

I fear that the consequences could be far more damaging than a bit of bad press. There has to be a strong possibility that many of the potential taxpayers who do not get through either actively or passively give up. This means that potentially in millions of cases, tax that people were willing to pay goes begging.

I don’t know about you, but I pay my taxes relatively willingly in the knowledge that I am obliged to comply with the law but also by doing so I am helping to provide services that the country needs. However, I also do so on the basis that there is a level playing field and everybody else is also paying the taxes that they should.

If it becomes apparent that the tax system is failing, which might be indicated by this kind of inability to get the basics right, I wonder whether we could get to a situation where tax avoidance and tax evasion become even more prevalent? That might then begin to create a vicious circle where tax revenues reduce, leading the government to cut HMRC costs further leading to tax revenues reducing.

Replies (22)

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By Justin Bryant
30th May 2018 11:39

Couldn't agree more. The HMRC helpline number 03000 534 226 in the link below was engaged all day yesterday and is still engaged all day today. https://www.gov.uk/government/publications/disguised-remuneration-detail...

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Replying to Justin Bryant:
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By HMRCVictim
01st Jun 2018 10:36

Interesting, as yesterday was the deadline (not sure if HMRC ever announced this outside of letting tax advisors know) for people to register an interest in settling.

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By KevinMcC
30th May 2018 14:19

A resounding no has to be the answer I'm afraid.

What gets counted as an answered call?

Chap in our office tried calling yesterday, to be met with a message saying how busy the department is and to write to them, and cut off with the lovely £Goodbye".

Does that count as a call answered? I hope not.

The lack of training and consistency when you do get through only adds to their problems. How many times have you gotten nowhere with 1 operator, only to put the phone down, call again, then get things dealt with no problem.

I go for a 3 strikes approach to calling now. If I get 3 operators in a row telling me they can't do what I'm asking then fine. Rarely need to use more than 2 strikes though.

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Tornado
By Tornado
30th May 2018 14:44

IF ONLY ..

If only HMRC knew how the tax system worked, life would be so much easier.

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By Michael C Feltham
01st Jun 2018 09:56

"The excuse from the powers that be appears to rest on the proposition that telephone calls are no longer necessary in a technological world."

Indeed; however, HMRC don't do emails!

Except, on the rare occasion when they want to chase you...

To even c0nsider if HMRC is service-ready to handle MTD is simply a joke.

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Replying to Michael C Feltham:
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By johnjenkins
01st Jun 2018 12:05

Michael, HMRC don't have to handle MTD. It's up to the software companies, us and our clients. You can tell from the "update" webinars that HMRC have completely washed their hands of all responsibility.

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Replying to johnjenkins:
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By Michael C Feltham
04th Jun 2018 10:07

John: Who will the poor benighted taxpayer call, when HMRC send them seriously punitive penalty notices for getting their - multiple - MTD returns wrong?

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Replying to Michael C Feltham:
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By johnjenkins
04th Jun 2018 10:51

Nah Nah, Nah Nah, Diddly Dum (repeat). "Penalty Busters".
I'm sure there are some already out there just waiting for the chance. Also I hear that HMRC aren't doing too well when penalties are challenged.
Again if HMRC can be proved "not fit for purpose" then how will that affect decisions.
Exciting times. It must be like a reporter sitting on the iceburg waiting for the titantic to turn up.

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By G Webber CTA
01st Jun 2018 10:06

My view is that HMRC is willing to take on the chin complaints and reprimands over failing to answer the telephone and taking a long time to reply to letters, because it deflects examination and critical appraisal of deeper and more sinister issues.

An MP finds it easy to read a table that says it takes 14 minutes to answer the 80% of calls that do get answered. It's easy for him/her to climb on that soapbox and bash an agency that - as is pointed out - has been pared to bone and has no time or resource to train their people.

It's much harder for an MP to understand that HMRC is applying tax law retrospectively, often in contravention of Parliament's intentions, and completely without any oversight. That lack of understanding becomes a political necessity when the blame can be traced back to the same MPs.

Conspiracy theory? Not to my clients who experience this daily.

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Replying to G Webber CTA:
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By Justin Bryant
01st Jun 2018 10:18

As far as I'm aware HMRC never apply tax law retrospectively contrary to Parliament's intention. Quite the opposite in fact (so I think you a being a bit too kind to MPs there), unless you can give an example where that is the case.

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Replying to Justin Bryant:
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By G Webber CTA
01st Jun 2018 10:26

Have a look at cases heard and pending on EIS/SEIS. Have a look at cases heard and pending on EZ/BPRA. Have a look at cases pending in the contractor space and the application of a 30 year old IR35 policy that flies in the face of the Taylor Report which the Government has accepted.

In the evidence to TSC recently, senior HMRC types were telling MPs that "contractors paid themselves" in ways that were claimed to be tax free and that is avoidance. I've never seen a contractor "pay themselves" let alone in a way that is avoidance.

This deliberate twisting of facts to suit the action of HMRC in chasing individual contactors who operate within the law as advanced, approved and supported by Parliament, demonstrates to me that HMRC is prepared to bend the rules whenever it suits them or whenever they fear missing a target.

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Replying to Justin Bryant:
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By HMRCVictim
01st Jun 2018 10:28

2019 Loan Charge.

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Replying to G Webber CTA:
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By headinthesand
01st Jun 2018 17:58

I assume you are referring to the 2019 loan charge - pernicious, ill formed, poorly coordinated, retro in effect, and highly damaging.

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By HMRCVictim
01st Jun 2018 10:39

Sorry. What level playing field? Large multi-national companies use tax structures peddled by the Big Four Accountancy firms (whose staff rotate through the Treasury advising on tax rules) in order to pay next to zero U.K. tax.
The Duke of Westminster paid next to no tax on his multi-billion pound inheritance in 2017 - because this is allowed by the rules.
MPs expense claims are specifically exempted (unlike any other profession in the U.K.) from being considered to be a taxable Benefit In Kind.
And at the same time a punitive tax charge (2019 Loan Charge) is introduced to club tens of thousands of contractors into submission when they have a reasonable case to argue that the RangersFC Supreme Court ruling has provided a precedent for all tax liability to reside with employers.

I would say the playing field is decidedly tilted.

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By dgilmour51
01st Jun 2018 11:07

One of my guys charges himself to his ltd co at a pretty modest £250/day.
This, he tells me is his minimum loss if he needs to speak to HMRC, even at their behest.
He knows it will be a 'long and tedious session', so he goes to his office at 09:00.
... First task is to find all the potentially needed paperwork
... Next, try to work out which tax specialization is in topic - Personal, Corporate, Dividend, Allowances or whatever as its not always clear - try getting hold of a tax treaty person if your thinking of exporting!!
... Then work out how to explain the problem to the answeree should HMRC grant the privilege of an opportunity to pose a problem
... Then a cup of tea before the onslaught
... Next, dial and wait the interminable
... Next, dial and wait the interminable
... Next, dial and wait the interminable, get through and get cut-off
... Next, dial and wait the interminable, get through and get told you have called the wrong number
... etc.
And so it goes on.
If he ever does get through the experience is just so sapping that he has not the energy to get up and go.

HMRC may have collected £400M, but my bet is the loss to the economy by small people attempting to do the right thing is vastly greater.

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Replying to dgilmour51:
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By raybackler
01st Jun 2018 15:03

My experience is that day rates have increased to compensate. So although HMRC have collected more tax, public sector costs have increased, so the net effect to the Treasury will be a lot lower, possibly even nil.

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By Brend201
01st Jun 2018 12:27

"This means that potentially in millions of cases, tax that people were willing to pay goes begging."

The opposite is also true. My employer lives in another country but has a small amount of UK income. Tax adviser said no liability. HMRC sent a demand for approx £300. He paid it on the basis that the tax adviser would clock up more chargeable time than that in demonstrating that the demand was invalid.

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By Phil Hall
01st Jun 2018 14:10

Unfortunately, the fact that HMRC is failing to answer so many telephone calls comes as little surprise.

A recent survey of AAT licensed accountants highlighted that one of the most important changes they would like to see is an increase in the skills, training and number of HMRC tax inspectors and call centre staff. This is further supported by the findings of an AAT survey of MPs in December last year, which showed 73% of MPs believe there is a need to increase the number and skills of HMRC staff.

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By tonyaustin
01st Jun 2018 16:30

Before considering whether HMRC is fit for purpose, you have to know its purpose. I thought it was to collect as much tax as possible, as quickly as possible, at as little cost as possible, within its understanding of tax law. Everyone else has to work it out for themselves and try to get HMRC to operate as they would like and not how HMRC thinks fit or get the Tribunal to help them. Many suffer as a result, some who have the resources to do so, manage to work it to their advantage.

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By headinthesand
01st Jun 2018 17:53

I think the worst case scenario (but the normal operating practice) appears to be. Disagree with something. Open a case via discovery. Ask for information they are not entitled to. Make a demand. Receive appeal. Acknowledge the appeal, but do absolutely nothing for weeks, months, years. Tax payer calls, and fails. Tax payer calls and fails. Tax payer calls, gets through, and the person promises to pass to the case worker. Case worker ignores. Emails are ignored. Letters are apparently sent (they say) but are never received. They refuse to be chased - have no service level for response. So they ignore as much as they can. Eventually the case will close and they will of course add large amounts of interest that they caused to accrue by inactivity.

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By trecar
02nd Jun 2018 15:41

I have developed a technique for making telephone calls to HMRC. First I put on the kettle then I make the call and put it on loudspeaker, then I make a cup of tea/coffee, then I go to my desk and get on with other work whilst the phone is still ringing. When the call is finally answered I go through the robot responses and then settle down for the extension to be answered. By this time the tea/coffee has gone cold so I go and reboil the kettle and make another cup. By this time its also time for a biscuit break to enjoy the second cuppa. Finally, the phone gets answered and I am advised that the person I am speaking to is unable to help and I am advised to call again later. But all this time I have managed to carry on working on other things. Conclusions? The speaker addition to the phone has to be one of the most wondrous inventions to the office world and whoever is responsible in government for the operational efficiency of HMRC must be the most incompetent individual imaginable.

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Replying to trecar:
Tornado
By Tornado
02nd Jun 2018 16:08

"whoever is responsible in government for the operational efficiency of HMRC must be the most incompetent individual imaginable.2

And there is the crux of the problem .... no one takes responsibility.

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