Tuesday, August 02, 2011

HMRC performance unacceptable - but are you getting the service you deserve?

The Treasury Select Committee's recently published report on HM Revenue & Customs has pulled very few punches indeed. Our poor performance, combined with a sense that we make it difficult for people to communicate with us, risks the currently high levels of voluntary compliance.

Now, you will note that I have taken their criticism at face value which, given that I work for HMRC, puts me in a slightly awkward position. But I'm not going to attempt to rebut their claims, for two reasons - firstly, that the evidence supplied to the Select Committee by those giving evidence to it speaks for itself, and secondly, I work for HMRC (had I already mentioned that?) so any Liberal Democrat won't believe an 'official' statement, and the rest of you hate/fear us (delete as appropriate).

I will, instead, bring to your attention a number of points designed to make you (hopefully) think.

At the moment, there is tremendous pressure on resources in government, and as one of the greatest costs is people, cutting staff numbers is seen as being highly desirable. This is a perfectly legitimate stance to take, after all, when times are hard, government has to demonstrate that it is seeking greater efficiency. The Coalition Government is proud of its record in cutting spending, and it does need to balance the books. Whilst tax rises might do part, or all, of the job, they are not popular. Thus, spending cuts must pick up some of the slack.

However, whilst one arm of government is taking pride in cutting costs, another is complaining that HMRC is failing to provide a quality service to the public. In order to drastically cut staffing levels, a significant part of the administrative burden has shifted from us, the so-called bureaucracy, to you, the so-called customer. And funnily enough, because it is what we do all day, we're quite good at it. On the other hand, if you do it once a year, you're less likely to be. I get trained (theoretically) when things change, you almost certainly don't.

For just this reason, you may well decide to engage an accountant, someone who may well know more than I do - although I am surprised at how often that assumption is demonstrated to be erroneous. In return for taking the burden out of your hands, you reward them.

In other words, you pay them for a service that we used to perform. It may be that their cost is less than the additional costs of having us do it, although I doubt that too (have you seen how much accountants earn?). So, whilst you are potentially charged less by the State, you may have higher overall costs. You pay your money - literally - you take your choice.

My Liberal Vision friends will doubtless approve of this, as it fits with their view of the State and its role. However, someone running a small business, paying what they might see as a disproportionate amount of their income in order to comply with the requirements of corporate tax law, might see it differently. And trust me, they do.

The temptation is not to bother, or to do it yourself, probably badly. That introduces risk, both to the public purse in terms of revenue lost and additional costs in chasing returns and payment, and to the economy, whereby voluntary compliance becomes less commonplace and the market is distorted by the potential competitive advantage gained by those who do not comply.

So, there is a serious issue here, although it may have, in part, passed the Select Committee by. The irony should not be lost by any of us... 


sewa mobil said...

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Anonymous said...

It would help if HMRC did not behave like such a bunch of unhelpful jobsworths and stopped sending threatening letters to people who might actually be trying to do the right thing.

It would help if HMRC accepted that if/when paperwork goes missing it might not necessarily be the taxpayer's (individual or company) fault it might be HMRC's fault!!!!!!!!!