Save content
Have you found this content useful? Use the button above to save it to your profile.
A picture of Her Majesty's Revenue and Customs building in Westminster, London, UK AccountingWEB - CIOT president: ‘Ministers must resource HMRC’
istock_Treasury-HMRC_smartin69

CIOT president: ‘Ministers must resource HMRC’

by

After the Financial Secretary to the Treasury rebuffed calls from the professional bodies to invest in HMRC’s service levels, the Chartered Institute of Taxation’s new president has restated the need for ministers to resource HMRC properly for the job it has to do.  

2nd Jun 2023
Save content
Have you found this content useful? Use the button above to save it to your profile.

Gary Ashford officially took the helm of the Chartered Institute of Taxation (CIOT) at the tax body’s annual general meeting earlier this week and used his maiden speech to urge ministers to resource HMRC properly to improve service levels. 

“I will always defend HMRC, as I know there are lots of great people there, doing some very important work, but when people can’t get prompt answers to queries that makes it more likely they’ll get things wrong,” he said.

Ashford set out in his speech that tax authorities must provide a framework that makes it as easy as possible for taxpayers to be compliant but “that doesn’t feel the case right now”.

The Financial Secretary to the Treasury’s response

The new president’s call comes after a short response from the Financial Secretary to the Treasury (FST) to an open letter from the professional bodies before the Spring Budget, where they urged the Chancellor to prioritise HMRC service levels. 

The FST Victoria Atkins’ short response apologised on behalf of HMRC for customer service levels not being “where they want them to be” and blamed the delays on unexpectedly high volumes of repayment claims, IT issues and resources being diverted to provide support for Ukraine visa processing. 

She also set out HMRC’s future ambitions of building a digital tax system between now and 2030 that will help taxpayers get their tax and payments right first time, reduce error and fraud and fit “seamlessly with the way people run their businesses and their lives”. 

‘Extremely disappointed’

However, the CIOT’s weekly newsletter branded the FST’s response “extremely disappointing”, saying she has not addressed the full range of the professional bodies’ concerns. 

The tax body added that members are still experiencing problems in progressing matters and getting through to the right HMRC advisers. 

Unsurprisingly then, Ashford led his presidency address by reasserting that service levels are a priority in the CIOT’s engagement with HMRC. 

“When people are stuck on phone lines for hours on end – taxpayers and their advisers – that adds to compliance costs. When people can’t get timely repayments, that harms cashflow and threatens business viability.

“Poor service levels at HMRC are not just a pain for taxpayers and advisers, they harm tax compliance, hinder business activity and hammer away at trust in the tax system. A strong economy needs an effective tax system,” said the CIOT president.

But, as Ashford pointed out, HMRC has 6,000 fewer customer service staff than it did five years ago.

Ministers must resource HMRC properly

Ashford is familiar with the workings of HMRC, having started his career at the Revenue in the 1980s and worked there for 17 years. But as HMRC plans efficiencies through increasing digital interactions, he raised concern about the rapid pace the Revenue is taking in its digital agenda. 

“I’m a true believer in the power and the potential of technology. But cutting staff numbers now in anticipation of efficiencies from digitalisation that has not yet arrived, seems to me to be putting the cart before the horse.” He added, “Ministers must resource HMRC properly for the job it has to do.”

The CIOT presidents have previously used their speeches to influence policy and decision-making and take a stance on the state of the tax profession. Past president Susan Ball, for example, used the CIOT’s 2022 Parliamentary reception at the House of Commons to call for a delay to Making Tax Digital for income tax self assessment (MTD ITSA) and this ultimately set the wheels in motion for the Treasury to change the timetable for the rollout of MTD ITSA until April 2026. 

The new CIOT president’s speech wasn’t just dedicated to service levels. He also defined the tax body’s role as “a candid friend to HMRC. Sometimes critical. But always constructive.”

What else was in the speech?

The rest of the speech was wide-ranging, covering topics affecting tax such as the taxation of cryptoassets, tax simplification, regulation of the profession and the work of the Low Incomes Tax Reform Group as it celebrates its 25th anniversary in July.

The regulation of tax agents also came up in the speech, after the financial secretary told Parliament that this is something she is “considering actively”. 

Ashford, though, said government regulation would likely be “costly and ineffective” and his preferred approach would be for anyone providing tax advice on a commercial basis to belong to a professional body. AccountingWEB reported on this being the CIOT’s stance back in 2020

Ashford also shared his disapproval of the abolition of the Office of Tax Simplification (OTS). He said scrapping it was a “mistake” and instead the government should have strengthened it, “giving it a louder voice, a wider remit and greater resources”.  

On technology, Ashford started with MTD and how the tax body had been critical of the pace of change and underestimates. While he agreed with the idea of using digital tools to increase compliance and customer experience in the tax system, he had doubts that “MTD will reduce taxpayer error by anything like as much as HMRC think it will”.

Turning his attention to the taxation of cryptoassets, Ashford asserted that digital assets will play an essential part in the development of financial services but he encouraged HMRC and the government to help the public understand the tax implications better. “This is an area where a policy vacuum will simply be filled by bad actors, and scams and fraud will proliferate,” he said. “We need to recognise cryptoassets and the broader decentralised finance sector as unique, and therefore needing their own, specific and clear, set of legislation for how you tax them.”

Then on artificial intelligence, Ashford said he didn’t think the profession is going to be replaced by ChatGPT, but believed tax professionals will have to adapt. 

“There isn’t a lot of space in the profession these days for people who can’t use a spreadsheet or the internet. In a few years’ time it could be the same with AI [artificial intelligence].”

Linking the advances in technology to the tax body’s new Diploma in Tax Technology, he advised tax professionals to use AI to free up time for tailored support and for research, writing basic text and coming up with ideas, such as asking which reliefs might be available to their clients.

Replies (11)

Please login or register to join the discussion.

avatar
By Justin Bryant
02nd Jun 2023 15:29

Either that or you massively simplify the madly complicated UK tax system (and I don't mean with even madder MDTfIT). Here's just one example of 1,000s of potential simplifications.

Abolish this relief (that I never knew existed as a potential CGT relief until today and then discovered why as it's of virtually no significant use in practice due to various restrictions): https://www.legislation.gov.uk/ukpga/2007/3/section/126

I doubt anyone has claimed this relief ever and if they have it's wholly disproportionate in terms HMRC resources in monitoring such claims and writing-up/maintaining HMRC's manual etc.

In fact, there needs to be a very big bonfire of such things even if HMRC do get more staff as there's a never ending mad addition to the already mad complexity.

Thanks (2)
avatar
By Tom+Cross
02nd Jun 2023 16:07

From what I can see, HMRC isn't the only Government agency lacking sufficient resources. I'd venture to suggest that the majority of the civil service are also living the nightmare, which is now the trademark of the UK machine.
When you listen to the news, read the coverage in the newspapers, we fail to achieve, in so many areas, we must be a laughing stock, across the world.
For me Rishi and his cabinet have run out of steam but I'm not sure what the alternative could offer.
It really is embarassing.

Thanks (2)
Replying to Tom+Cross:
By ireallyshouldknowthisbut
02nd Jun 2023 16:46

We are a laughing stock.

Read some international press and its deeply embarrassing.

Most of the EU is utterly bemused with us, and things we have lost our collective minds, but are more than happy to exploit the situation for their benefit, shovelling high paid jobs out of the UK by the thousand.

All our core strengths on finance, universities and research as well as the obvious car manufacturing are being slowly strangled by the lack of freedom of movement of both brains and stuff and further suffocated by poor admin for taxes, and dragged down by a failing health system which happily leaves people sick for months or years so long as they are not dying right now.

Sick Man of Europe MKII

Thanks (0)
Replying to ireallyshouldknowthisbut:
avatar
By Justin Bryant
02nd Jun 2023 16:58

Agreed, but that's a different point and the left are as bad as the right re their views on things like non-dom status, banker bonuses, VAT-free shopping for rich tourists etc. that other EU countries can and do easily exploit.

Thanks (0)
avatar
By Hugo Fair
02nd Jun 2023 16:22

When a ship starts to let in more water than it keeps out, or when the framework of a building loses its structural integrity ... you scrap the boat and/or tear down the property (before rebuilding anew).

So why treat HMRC any differently?
Attempts to drag it into the last century (let alone the burgeoning next decade) appear to be nothing more than the world's largest experiment into testing the boundaries of the sunk-cost fallacy!
But worse, like a sinking ship or collapsing building, it is causing massive collateral damage to all and sundry ... except those who don't care because they sit at the epicentre next to the escape hatch.

Thanks (7)
By ireallyshouldknowthisbut
02nd Jun 2023 16:50

Great to see CIOT and Ashford getting stuck in.

No doubt the CIOT will soon be written off as "the blob" for daring to tell it how it is.

Thanks (0)
Tornado
By Tornado
02nd Jun 2023 16:53

Ashford set out in his speech that tax authorities must provide a framework that makes it as easy as possible for taxpayers to be compliant but “that doesn’t feel the case right now”.

On the whole this summary of the situation is good, but again, our professional bodies appear to be offering fatherly advice to HMRC when they should be more forceful about the situation. 'That doesn't feel the case right now" is not a correct statement, in my view ... "This is NOT the case right now" is a more honest statement, even if still a little tame.

Thanks (5)
avatar
By Open all hours
03rd Jun 2023 05:41

£2Bn MTD. They’ve had it so to speak.

Thanks (1)
avatar
By Mr J Andrews
06th Jun 2023 17:18

''I will always defend HMRC as I know there are lots of great people working there.......''
Equally , Ashford , having spent 17 years working in the Department, could have said :-
'' I will always attack HMRC as I know there is no accountability for the declining standards under its current leadership. Whilst lots { to coin the same comfort word } of the staff are dedicated , hard working civil servants , the continual, imbecilic half thought through ideas thrust upon the taxpaying country - before getting the basics in order - has led to an all time low in the Department's moral and consequently a meltdown in public service.''
As for the time ''.....not right now.....'' for a framework to make tax compliance easy for the public, I suggest Ashford looks back to the progression made when he started out with the Inland Revenue back in the 1980s and then plot a graph to see the spiralling downward trend. I guarantee he'll recall how much easier it was for Joe Public in that lost era.

Thanks (0)
Replying to Mr J Andrews:
Tornado
By Tornado
06th Jun 2023 18:01

HMRC - A PATHETIC, DISGRACEFUL ORGANISATION

Against my better instinct, and the thought of a widow still waiting for a tax refund for her husband's Estate based on a Tax Return submitted over three months ago with a follow up letter, all of which have disappeared into the HMRC Black Hole, in desperation I decided to try and phone for an update. After being cut-off after waiting over an hour for "an advisor" first time and then just giving up after another hour had passed at the second attempt, I am no wiser about when my widow client will receive her refund and my Agent Access does not even show that the Return has been received. A pretty useless 'digital' service.

This is disgraceful behaviour from an organisation that we pay for out of our taxes and by LAW should be providing us with a service that is fit for purpose. (See the HMRC Charter)

HMRC try to tell us that there is no crisis but this is their delusion and the endless messages on the 'Helpline' telling us to hang on because our call is important to them is just plain lying. Our call is clearly NOT important to them otherwise they would make sure that we got through. The 'Helpline' also suggests that you can use the Digital Assistant, which I tried , but that did not understand English and in the end it was about as useful as a Tax Return with No UTR (Topical)

And, as many other people have pointed out, we would not need to phone them if they had done their job properly in the first place.

I am trying to deal with an organisation that does not want to interact with us and there seems to be NO ONE doing anything about it. HMRC are a disgrace and someone should be held accountable and urgently DO SOMETHING.

What do I care? You can stick MTD where the sun don't shine for all I care, but I do care about my clients and I think now is the time for the Government to take charge of this pathetic situation and give us the service that we actually need rather than a 'service' that they think we need.

Thanks (2)
avatar
By usedbyhmrc
08th Jun 2023 12:12

and HMRC is closing the general public SA Helpline for 2 1/2 months to catch up on post. (ADL is not affected)

Thanks (0)