HMRC 's treatment of taxpayers criticised


November 2015

HMRC 's treatment of taxpayers criticised

HM Revenue and Customs has been condemned for its poor customer service and general attitude of lack of care towards taxpayers, which MPs have said has a negative effect on the actual collection of revenues.

Failed prosecutions, lengthy hold times and huge numbers of unanswered calls have led to MPs in the Public Accounts Committee calling out HMRC for "still failing taxpayers." Members of the PAC have said that the problem has become so bad that it may well result in a drop in tax revenue earnings. HMRC has roundly denied accusations of failure and has said that they have hired some 3,000 extra staff in order to help with any problems that had arisen.

The facts, however, speak for themselves. Figures released in early 2015 showed that only 50% of phone calls to HMRC 's customer care centre had actually been answered in the first half of the year ñ a fall from the already somewhat paltry 74% in 2011-12.

The chair of the PAC, Meg Hillier, said that HMRC needs to "rapidly improve its customer service" that she said had already been described as "abysmal" and is now "even worse, to the extent it could be considered a genuine threat to tax collection".

They went on to criticise HMRC 's vague promises to "improve year on year" as being nothing more than exactly that ñ vague promises without any actual grounding or signs of progress.

"It beggars belief" said Hillier, "that, having made disappointing progress on tax evasion and avoidance, the taxman also seems incapable of running a satisfactory service for people trying to pay their fair share."

The "disappointing progress on tax evasion and avoidance" she spoke of refers to the "woefully inadequate" 11 prosecutions that HMRC has made in offshore tax avoidance cases in the last five years.

To put this inadequacy in perspective: HMRC had been given the details of some 3,600 British citizens by a former HSBC emploee(known as the Falciani list) who were found to have been hiding money in offshore accounts in Switzerland. Of these 3,600, only one person was prosecuted. In lieu of more prosecutions, HMRC had decided to offer reduced penalties to anyone who would come forward and disclose information about money they 'd hidden abroad. The PAC complained that those guilty should face more "robust" punishment, and that these reduced penalties given to those coming forward had none of the "deterrent effect" that proper punishment and prosecution should have.

This year, the UK government announced a target of 100 prosecutions a year for serious tax evasion charges and part of this involved creating a new offence based on "strict liability" that would mean prosecutions could go through, whether or not the person in question 's intention to break the law could be shown.

HMRC have admitted that "standards have not been good enough" and that "we are still struggling". However they maintained their defence against accusations of poor customer services, releasing a statement that read: "We are disappointed that the PAC has overlooked HMRC 's results, which include collecting a record of £517 billion in tax revenues."