HMRC Put The F Into Failure

Well then, what a "giddy" world it is in HMRC!

For many years this site has been pointing out the inefficiencies and failures of HMRC, comments from staff and loyal readers show that the edifice that is HMRC is crumbling day by day.

Finally those with some alleged "control" over HMRC (ie the politicians) have woken up to the ongoing car crash that is HMRC.

On 30th July (a Saturday for some reason, surely not trying to hide the report were they?) the Treasury Select Committee published a report into the administration and effectiveness of HMRC.

Unsurprisingly it found that there is considerable dissatisfaction among the public and tax professionals with the service provided by the Department. The committee is concerned that if this continues it may undermine respect for the tax system.

Quite!

Serious concerns were reported in a number of areas, all of which have featured many times on this site, including:

- Unacceptable difficulties contacting HMRC by phone during peak periods
- Endemic delays in responding to post
- An increasing focus on online communication that may exclude those without reliable internet access

"we do not accept the Department's explanation that these problems are primarily the result of reconciling of multiple PAYE tax years at once. There is a serious risk that if communicating with HMRC becomes too time-consuming, difficult and expensive, respect for the tax system, and with it voluntary compliance, may be undermined....

The National Insurance and PAYE Service should ultimately make PAYE work more effectively and ensure efficiencies across the Department. However, the problems resulting from its flawed implementation have done significant damage to the public perception of HMRC and the tax system more generally...

Implementing RTI before the system and its interface into HMRC have been properly tested could led to greater delays later on and further damage public confidence in the Department and the tax system. ...

HMRC operates under significant pressures. It has to implement increasingly complex tax legislation, sometimes developed without full account of the practical consequences, whilst undergoing restructuring, delivering substantial resource reductions and job cuts....

We received disturbing evidence of job cuts being made before the efficiencies that were intended to enable them had been delivered, and of a culture of command and control that disengages staff and prevents potential problems from being dealt with effectively. ...

Whilst staff remain dedicated to their work despite the pressures HMRC is under, they have little confidence in the leadership of the Department or that change will be for the better. This has been a long-running problem for the Department. Whilst senior management are very aware of the problem and have made efforts to improve engagement, there has been little evidence of any positive impact to date. "

The committee made recommendations in the following areas:

- Improving the service provided by contact centres, particularly in relation to escalating complex queries and providing alternatives to 0845 numbers
- Providing robust alternative to online contact, including more cost-effective ways of providing face-to-face advice
- Ensuring greater awareness of the impact of process changes on individuals and businesses, in particular recommending senior staff spend time with tax practices, charities and businesses
- Ensuring reductions in resources are managed in a way that is commensurate with the enabling IT and process improvements and minimises the loss of Departmental tax expertise
- Reviewing the division of responsibilities between HMRC and HM Treasury in relation to making tax policy, to ensure practical considerations are taken into account at the earliest possible stage
- Better targeting of letters that threaten serious consequences against individuals
- Having the National Audit Office externally audit preparations for Real-time Information, to ensure Ministers can be held accountable for progress against the Government’s ambitious timetable
- Examining how the Department can achieve better accountability around the settlement of large tax cases

Loyal readers will find none of the above at all surprising. The only real surprise is that it has taken this long for someone to officially admit (albeit politicians passing the buck) that there is something wrong.

Oddly enough Dame Lesley Strathie is off on 3 months sick leave. Thus leaving the response/excuse to Clasper.

Here is what he said to the BBC:

"Stand back and look at the other side of the equation..., receipts £468 billion, £33 billion than more than the year before..." (BBC

All very nice, maybe. Except that there is one small fly in his oinkment.

In 2007-08 receipts were £461.6 billion (only £6.4 billion difference between this year and 2008). Receipts were in fact falling since 2007/08, and are only back now to where they were before.

Anyhoo, as noted many times on this site, the fundamental problems wrt HMRC stem from a.o.:

- insufficient resources of the right quality in the right place
- a botched merger
- lousy management (appointed by management)
- an absurdly complex tax system etc etc.

All of the above issues are in the remit of the politicians, until the politicians get their act together and admit responsibility this mess will never be sorted out. Unfortunately the politicians will not do this, and will continue to pass the buck.

Things will only get worse!

Tax does have to be taxing.

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