HMRC Under Fire From MPs For Tax Blunders
People could lose all respect for the tax system because of “unacceptable” flaws in basic services, according to a damning report by MPs.
Her Majesty’s Revenue and Customs (HMRC) is accused by the Treasury Select Committee of “endemic delays”.
A scathing report points to overstretched staff and says many calls from the public go unanswered and letters are ignored for months.
Meanwhile, an “increasing focus on online communication” risked alienating those without reliable internet access.
The criticism comes in the wake of last year’s tax blunder, which saw HMRC admit six million people had paid the wrong amount of tax in previous years.
In February of this year, tax experts told MPs the service was at “breaking point”.
The service has had problems since the computer systems of what were the Inland Revenue and HM Customs and Excise were merged.
But the committee said technical blunders had been made even worse by poor service.
The committee said the “flawed implementation” of the PAYE system had done “significant damage” to the public perception of HMRC and tax system in general.
HMRC operated “under significant pressures” – such as increasingly complex tax legislation – the report acknowledged.
Widespread job cuts and a senior management out of touch with the day-to-day issues meant the future was looking “bleak”, MPs said.
The committee said: “HMRC collects revenue for the Government of more than 100 times the amount it costs to run.
“Given the fiscal position, it would make little sense for the department to be cut back further if resource reductions in addition to those plans already agreed would have the effect of reducing receipts, displacing disproportionate costs on to the wider economy or further eroding public confidence in the tax system.”
The committee made a series of recommendations including rapidly improving its phone service, particularly in relation to complex queries.
It also advocated drawing up minimum-service standards for dealing with post “in a timely and accurate fashion”, plus considering cost-effective ways of providing more face-to-face advice.