AccountingWEB.co.uk joined forces with Taxation magazine in 2008 to make representations about the planned HMRC Charter. Now that the draft Charter has been released for comment, I have taken a look at some of the detailed proposals. This could be one of the most important steps in changing the attitude to tax compliance ever taken. But how to reach a wider audience? Please comment on the new Charter proposals - either directly or through AccountingWEB.co.uk. We shall be collating a community response to put forward,
HMRC launched the second Charter consultation on 3 February, with responses sought by 12 May 2009. The consultation invites comment on the proposed Charter, which it is intended will fit on one page of A4 paper, and a Plain English Crystal Mark will be sought for the final product. Because HMRC wants to reach as many interested parties as possible, the consultation has an alternative electronic format, so that respondents can make their comments online. There will also be a separate e consultation aimed at young people.
The development of a new Charter presents a unique opportunity for HMRC to engage with taxpayers and claimants about what they can expect and how they should behave in their relationships with the authority. The draft Charter is very simply worded, and sets out what we can expect from HMRC, and what HMRC expects from us as taxpayers and citizens.
The draft Charter commences with an introductory statement, summarising HMRC's role.
“HM Revenue & Customs makes sure that money is available to fund the UK’s public services. We also help families and individuals with targeted financial support. We aim to make the tax and benefits system feel simple to use.”
The first consultation highlighted that many taxpayers do not see the link between the role of HMRC in collecting tax and the provision of the public services they use, which are funded by tax revenues. If more people understood this connection, they might see HMRC as carrying on a valuable role in society, and thus consider compliance with tax obligations as an important obligation on all citizens. This could potentially change the culture of compliance in the UK.
What we can expect of the tax authority
The proposals cover a number of areas and are expressed as high level statements about what those dealing with HMRC should expect in terms of the way the authority goes about its business. These statements do not replicate legal rights, as the first consultation established that the desire was more for a principles based approach, setting the tone of HMRC’s dealings with taxpayers and claimants. So what can we expect from HMRC?
“You can expect HMRC to :
- Treat you as honest, believing you are willing to pay what you owe, claiming only what you are entitled to, unless we have good reason to doubt you.
- Respect you, listening to your needs and taking into account your circumstances.
- Provide you with accurate information, making it easy for those who try to get things right.
- Recognise your right to be represented by someone else.
- Pursue relentlessly those that break or bend the rules.
- Protect the information that we hold about you."
Obviously some of this touches on some fairly sensitive areas, but a consultation on the Charter is not the time to start measuring past performance against these proposals. I do like the “Pursue relentlessly...” as I believe that this is fundamental to a better relationship with ordinary taxpayers. The more articles that the lay press carries about wealthy individuals and companies “paying no tax at all” the more the ordinary worker will be frustrated and seek his own ways of minimising his tax liabilities.
What does the tax authority expect from us?
This is not a quid pro quo, and whether we live up to HMRC’s expectations will not affect the standards we expect from the tax authority. It is interesting to read just exactly what the authority hopes for in its dealings with “customers”.
“HMRC expects you to:
- Work with us to ensure your payments or claims are accurate and made at the right time.
- Respect our staff, treating them in the same way as you want them to treat you.
- Contact us when you need help, advice or support, letting us know if you have particular needs.
- Tell us about changes in your circumstances so that we can get things right as early as possible.”
Much of this is about communicating with the tax authority in an honest and timely manner, and would therefore cover the submission of returns and other information, and the timely payment of liabilities. I wonder whether there is quite enough on this theme. Appendix B to the consultation includes a range of statements that were not included in the draft Charter. I quite liked Appendix B statement A – “Be honest in your dealings with us” – in my view this really leaves no room for doubt at all. The headings approach in Appendix B is also quite direct – “Fairness”, “Listen and respect” and “Making things easy” for both, plus a heading under what we expect from HMRC on the subject of “Mistakes”.
The draft Charter then winds up with links to information about service standards, data protection policy, complaints and appeals, which are probably the obvious points to support the Charter expectations. These will provide more detail about HMRC’s process to underpin the Charter itself, and it makes sense to provide this detailed information as an addendum.
So what do you think? It has the merits of simplicity and brevity, and the makings of an important “social contract” between the public and the tax authority. Can this really be the stepping stone to a new attitude towards tax and tax compliance in the UK? I would dearly like to think so, but am scratching my head for a way to get the message over.