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Fresh call for HMRC investments

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A fresh call for investment into HMRC has been made in a bid to “address poor service standards” and “remove a barrier to growth and productivity”.

9th Feb 2024
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The Institute of Chartered Accountants in England and Wales (ICAEW) has made a call for new investment in a bid to streamline HMRC registrations, simplify the tax system and boost R&D spending.

A series of recommendations have been made to all political parties by the chartered accountancy body ahead of the upcoming general election.

The manifesto has been produced on the back of an engagement process with ICAEW Chartered Accountants “across every sector, region and business size” in the UK, with the outcome being a 16-point plan.

It comes amid an existing push for further investment in HMRC.

The manifesto

ICAEW’s manifesto sets out recommendations in several areas including skills, sustainability, innovation, resilience, trust and trade.

So far as HMRC goes, it has called for:

  • the introduction of business start-up passports to streamline registrations
  • a new strategy to simplify and digitalise the tax system and a commitment to increase R&D spending beyond 3% of GDP
  • the next government to explore a new version of the growth voucher scheme, which closed for new applications in 2015

The proposed investments are part of a drive to “address poor service standards, remove a barrier to growth and productivity, and provide equitable redress to taxpayers that have incurred extra costs due to delays”.

Wider call

The launch of the manifesto is against the backdrop of calls for further investment into HMRC, with the authority’s service performance having been discussed at a meeting between the Chancellor of the Exchequer and ICAEW on 16 January 2024.

In a letter to financial secretary to the treasury Nigel Huddleston MP, ICAEW head of tax strategy Frank Haskew set out a summary of recommendations to improve matters.

Among these were:

  • establishing an HMRC taskforce to both clear the backlog of correspondence and keep on top of it
  • a greater consideration of the impact of any tax policy changes on HMRC’s effectiveness
  • a step change in HMRC’s approach to driving improvements along with greater accountability, among other suggestions

Unacceptable performance

In the same letter, Haskew revealed that the ICAEW continues to receive evidence of “unacceptable HMRC service performance on a daily basis”.

“The problems are across all HMRC service areas and include extreme waiting times on helplines, calls being cut off and long delays in responding to post,” he said.

“Members are increasingly commenting that the quality of service that they receive when they do speak to an adviser or receive a written reply has deteriorated significantly with HMRC advisers unable to deal with the issue and giving incorrect information.”

Haskew highlighted that the situation is “currently most acute in the area of income tax self assessment (SA) and individuals’ pay as you earn (PAYE)".

He did note that this is partially seasonal, but added that the situation has been “exacerbated by HMRC’s decision to restrict the SA helpline and the agent dedicated line (ADL) to a limited range of queries”.

Outlook

On the back of the fresh call for investment, Iain Wright, ICAEW managing director, reputation and influence, said that while entrepreneurs are the “lifeblood of our economy, members have told him it “isn’t as easy as it once was”.

“This set of recommendations, grounded in the insight and experience of our members across the country, will help the next government and parliament take the actions necessary to make it easier to start, run and grow a business and boost the resilience and strength of the UK economy."

Replies (9)

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By Justin Bryant
09th Feb 2024 11:15

But it's not just HMRC is it? The UK's public services generally are more or less in total meltdown thanks to this totally useless Government. You only have to read any random newspaper to see that if you're not aware of it personally (e.g. if you're the King or you live abroad etc.).

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Replying to Justin Bryant:
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By Justin Bryant
09th Feb 2024 15:35

For a random example of such a story from today's news, see: https://www.lawgazette.co.uk/commentary-and-opinion/compassion-on-the-ra...

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By FactChecker
09th Feb 2024 14:31

Whilst I haven't seen the full contents of his letter, Frank Haskew's summary of recommendations seems a lot more focussed and practical than the Birtian newspeak of the ICAEW's "new investment in a bid to streamline HMRC registrations, simplify the tax system and boost R&D spending"!
[That is not a focus on improving the core services - just special pleading.]

But the problems at HMRC (and as Justin says repeated throughout the NHS and the public sector in general) are not specifically to do with under investment.
Yes, greater investment *could* (a) give greater returns and (b) improve efficiency in providing the 'service' they claim to give 'customers'.

But ONLY if it is spent on the things which would lead to those benefits (rather than pet projects and politically acceptable claptrap) - which in turn requires two things visibly missing now:
* A clear set of plans intended to deliver 3/5/10-year strategic targets (with established priorities to assist with determining any changes along the way);
* An equally clear set of metrics that are published openly every 6 months (with accountability to an independent Review board and with responsibility for the accuracy of those figures laid at the desk of individual HMRC honchos).

Of course some experienced time-servers will find ways to undermine elements of that brave new world, but it would make it harder for the dissembling to remain hidden and just might 'encourager les autres'!

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Replying to FactChecker:
paddle steamer
By DJKL
09th Feb 2024 20:31

Investment in Education, Education, Education- they need to train their staff far better and once trained give them good reason to remain Civil Servants, the rest is mere window dressing.

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Replying to DJKL:
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By FactChecker
09th Feb 2024 21:41

Yup. 'twas ever thus - and not only in the public sector.

The reason I proposed the 'plans and measurements' is simply because that's the language that the public sector understands (or used to once upon a time), as they can't rely on market forces like (most of) the private sector.
And, again, they *used* to be happy with the concept of independent assessment - although they've developed a tendency to undermine that with non-independent committees and quasi-quangos.

But you're right ... if you can stop senior political/personal interference in setting priorities, then *all* you've got to do is basic HR (resource with the competences needed / train the essential additional skills / provide an environment in which the individual feels they can develop - and where successes are acknowledged & screw-ups are seen as an opportunity to improve, not merely blame).

Easy it ain't, but countless organisations manage this (at least adequately) whilst HMRC is (like a rogue nation) illustrative only of decay & senior incompetence.

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VAT
By Jason Croke
10th Feb 2024 22:03

Best investment HMRC needs is in new leadership, Harra has no care or respect for taxpayers or tax agents or even his own employyees, he's just cutting staff and pretending that digital will fill the gap.

Once HMRC stops pretending all is well and that in reality the ship has hit an iceberg and is going down, then HMRC might be able to correct it's course to a better outcome.

It makes no sense to cut the budget of the only agency that collects revenue needed to run the Country.

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Replying to Jason Croke:
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By djtax
14th Feb 2024 10:08

I agree the Harra era has not been good. The problem though is who comes next? The current number 2 is even more fervent than Harra that all things digital are the magical perfect way forward - and unlike Harra she does not have a background career in tax......

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By Mr J Andrews
12th Feb 2024 14:17

Do I detect, from Frank Haskew's call, a much needed return to ''Working Together'' ? This is surely the investment step needed to restore this failed Govt. Dept. to some sort of respectability - and productive service.
Whichever way you look at the ''poor service standards'' and in particular the ''barrier'' in Matthew's opener, the issue keeps reverting to one stumbling block - Harra.
Frank also mentions ''accountability''. Make as many calls , manifestoes , recommendations as you would wish. Things ain't gonna change whilst the buck doesn't stop with an incompetent incumbent.

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Replying to Mr J Andrews:
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By FactChecker
12th Feb 2024 18:05

Now there's a blast from the past ... ''Working Together'' ... and highly apposite.

I seem to recall at one of the final meetings (well before the convenient excuse of Covid appeared) that the 'reasoning' for winding down the face-to-face groups was that 'digital is where we're headed'!
Despite all the obvious protestations (it doesn't help maintain local relationships and makes it easier for HMRC to ignore uncomfortable issues, plus you don't get the 'interactivity' that historically had produced win:win solutions) - they eventually admitted it was simply that funding had been withdrawn for this 'non-core' activity.

It would be nice (and more likely to be productive) if someone has seen the error of that decision - but my ability to hold my breath whilst waiting is getting poorer!

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