How Are We Doing? - HMRC's Performance 2012/13

HMRC have published a self assessment of its performance against a range of compliance, operational and customer service measures for the financial year ending March 2013.

As per HMRC:

"For the year 2012-13 we achieved record revenues, brought PAYE up to date, and our customer service standards are at their highest levels since HMRC was formed in 2005, including telephone calls answered and our speed in answering post. And we have achieved this while continuing to deliver efficiency savings. These performance figures are provisional and will be confirmed in our annual report and accounts, which are published in June."

Amongst HMRC's boasts are that:

- 75.2% of call attempts were handled (achieving HMRC's undemanding target). Oddly though, there are no stats on call waiting times!
- 85% of post was cleared in 15 days (exceeding HMRC's 80% target)

Therefore everything is fine and dandy?

Not according to HMRC's political masters.

PAC have castigated HMRC over its failure to hit a target of reducing tax credit fraud and error, oddly enough this target isn't mentioned in the HMRC document referred to above.

In 2010 the government told HMRC to cut fraud and error by £8BN by 2015.

HMRC has now predicted that this would only be reduced by £3BN.

PAC are critical of the system which, in the committee's view, is difficult for claimants to understand and equally challenging for HMRC to administer.

The BBC quote a number of statistics:

• One in five awards featured an error or fraud which meant the claimants were overpaid
• A total of £1.7BN of these overpayments was written off because claimants were never likely to pay it back
• Some £2.3BN was lost to fraud and error in 2010-11, which was £850M more than HMRC expected
• A target to reduce the proportion of fraud in relation to the total amount of money spent on tax credits to 5% in 2010-11 was missed. It stood at 8.1%
• The 2015 target, set in the 2010 Spending Review, will now be missed by £5BN, according to HMRC estimates

The omnipresent Margaret Hodge said:

"HMRC's performance in cutting the level of fraud and error in the tax credits system has been hugely disappointing and extremely poor.

The department's failure to cut the fraud and error rate to 5% has cost the taxpayer dear. 

In these strained times, the government cannot afford these failures."

Ironically, having castigated HMRC, PAC then seem to take an intake of breath and admit that HMRC be given a "more realistic target" for reducing fraud and error.

Quite!

Targets are all very well and good, but if they are unachievable and unrealistic they are completely useless and indeed damaging to morale and performance.

Tax does have to be taxing.

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