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  • Writer's pictureCPAA

HMRC: It's time to take action


Never has there been more varied or easier ways for accountants to communicate and improve their service. Engaging events, branded apps, digital newsletters, webinars, podcasts, forums, and social media are just so

me of the ways the industry is embracing to communicate, connect, and build communities. Yet HMRC is not only failing to keep pace, its ability and desire to communicate effectively and offer a decent service is at an all-time low.


Here, the CPAA’s Alison Hale looks at the problems at the heart of HMRC and how change might happen. The service HMRC offers is not up to scratch and they know it. HMRC customer service staff numbers have been cut by 24% in the past five years and there have been instances recorded where HMRC has closed its telephone line when it could not cope with demand.


At the recent stakeholder conference in London, HMRC’s Permanent Secretary and Chief Executive Jim Harra apologised for poor service levels and poor behaviour from bad agents. While it is refreshing to see a HMRC acknowledge what so many practitioners have witnessed and felt frustrated by, an apology doesn’t go far enough. Action is needed to address and resolve the issues, anything less is just lip service.


 

Relationship troubles


CPAA members have been discussing their experiences at the latest regional seminars. Members expressed the view that HMRC is making itself anonymous as possible; there is a delay in handling calls, a dearth of expertise in solving problems, and there is a lack of responsibility and accountability for any issues.


Members also spoke of HMRC’s insistence that its website solves all issues. This tallies with Jim Harra’s assertion that HMRC’s digital services are excellent. He is keen to move taxpayers and agents to ‘self-serve’ online as much as possible. A workshop session at the stakeholder conference explored HMRC’s ambitions for introducing new agent and taxpayer digital services this year to further reduce the need for contact by phone and post.


By signposting digital solutions, HMRC avoids having to engage with those it is designed to serve. It seems that HMRC is pushing the hard graft of navigating ever-evolving tax requirements onto agents or directly onto the taxpayer. Yet it is precisely because businesses don’t want to engage directly with HMRC that they turn to agents. This, in turn, increases the need for agents to access timely and expert advice from HMRC. It is a vicious circle and we are at an impasse.


Members are less enthused by HMRC’s efforts to push everyone online, as there remains a clear role and requirement for personal support for problem solving. We know that so much of the burden of educating businesses about regulatory changes, tax matters and compliance falls to accountants. Agents are there to interpret both sides; to translate the needs of HMRC, and to represent the best interests of clients. A close working relationship with HMRC has to be possible and accessible to make this work.


 

News from the Budget


Ahead of the Spring Budget, a number of professional bodies penned and signed an open letter to Chancellor Jeremy Hunt, urging him to invest in HMRC as a priority action. The organisations joined forces to communicate the impact that inadequate service levels are having on businesses and agents. It pointed the finger at insufficient resourcing and underinvestment in HMRC systems, which cause delay and disruption to businesses.


Despite the open letter and HMRC’s failings acknowledged within its own annual conference, the Spring Budget did not respond with a sign of support that was hoped for and is much needed. Instead, the areas of focus were upon improving customer experiences via interactive guidance; an increased service to recover tax debt; and better digital communication to reduce “the need to contact HMRC.”


Here’s what the Budget policy paper had to say about investing in improving HMRC:


  • Transforming HMRC Guidance and Forms for Small Businesses: The government will collaborate with businesses and representative bodies to undertake a systematic review of tax guidance and forms for small business over the next 24 months to make it easier for small businesses to interact with the tax system as they set up and grow. The government will ensure guidance is clear, simple and easy to find, introduce step-by-step interactive guidance and modernise HMRC forms to improve the customer experience.

  • Investing in HMRC’s debt management capability: The government is investing a further £47.2 million to improve HMRC’s capability to manage tax debts. This will allow HMRC to better distinguish between taxpayers who can afford to settle their tax debts but choose not to, from those who are temporarily unable to pay, ensuring taxpayers are offered the right support. It will support taxpayers who are temporarily unable to pay by enhancing the online Self-Serve Time To Pay service, while also providing HMRC with additional capacity to ensure that those who can afford to settle their debts do so.

  • Tax Administration Framework Review – modernising income tax services: The government is publishing a discussion document on modernising HMRC’s income tax services to support better digital communication with taxpayers and reduce administrative burdens. This seeks views on how to integrate and modernise income tax Self-Assessment and Pay As You Earn processes so taxpayers can quickly and easily manage their own tax affairs online, reducing the need to contact HMRC.


 

Seeking support


The open letter from various accountancy trade bodies showed the Chancellor that industry wants action and called for investment in a failing but vital service. We need to show that this sentiment is shared by accountants across the UK and demonstrate the depth of feeling. The CPAA wants to ensure your voices are heard and believe there is strength in numbers.


We will start an online petition and ask members, other accountancy bodies and their members to all get behind it. With enough backing, a petition with 10,000 signatures gets a response from the Government. We want to take an active stance on improving HMRC services through different means, so we will also create a template letter for practitioners to use to contact their MPs, which puts pressure on the Government to take this matter seriously.

Rather than simply calling for investment generally in HMRC, we believe there are specific steps we can propose the funding tackles:

  1. Reduction of response time: increased staff levels to improve call response times and enable faster correspondence.

  2. Increased training and investment in expertise: have skilled staff who can provide concise answers to queries, and are empowered to take responsibility/accountability, rather than pushing enquiries to the website.

  3. Encourage staff back to the office within HMRC: pool resources, share expertise and manage more effectively.

  4. Increase communication: embrace better strategies for publicising news and updates - clients/agents are often unaware of change.

  5. Continue investment in digital: identify where forms or information are too complex and simplify them. Good digital services matter, but alongside not at the expense of all other services.


 

Time for change


HMRC may say the right things, namely that it respects and values agents, but we need to see this happen – and it needs to go beyond just an enhanced digital offering. Accountants and professional bodies are asked to answer consultations and attend HMRC events, but what impact and influence is this having? Will we see the changes we keep proposing, or are opinions being sought but plans ploughed on with regardless?


HMRC’s Chief Executive understands the importance of functioning relationships well enough. At the annual conference, he said, “we’re stewards of a much wider ecosystem of people who play a part in making the UK’s tax and Customs regime work. That ecosystem is represented by all of us in the room today, which is why it’s essential that we all work together effectively and learn from one another.”


Mr Harra added that he wanted working together to become HMRC’s “default way of doing business.” Now is the time for HMRC to improve its support for agents, not maintain the status quo or scale it back – and we hope to see Mr Harra’s words translate into action. We will keep pushing for improvement and hope you too will join us and show your support.

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