HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Monday, 4 August 2014

HMRC's 94% Error Rate

Kudos to HMRC for making so many mistakes wrt tax demands that the Tax Adjudicator found that 94% of those submitted to the Adjudicator were wrong, necessitating HMRC to issue almost £4M in refunds and write-offs together with £250K redress for "poor service".

Judy Clements, head of the adjudicator’s office, said:
If my office can mediate a complaint, then the department should have been able to resolve that complaint without the customer feeling the need to refer the matter to me.

Customers often compliment the direct personal discussion my staff have with them during the mediation of cases. I feel certain this is the sort of tailored response customers can and should expect from all departments.
She said she had seen instances where there was “no sense of urgency when making decisions on customer issues” and where HMRC staff “do not appreciate the impact matters may have on individual customers.

A total of 12,074 enquiries were made to the adjudicator in the year. The majority of cases it took on related to instances where HMRC had sent shock bills to people who had unwittingly underpaid tax. HMRC was found at fault in 94% of these cases, with the taxpayer issued redress.

The Telegraph has published a guide on how to fight your corner with HMRC:

Sometimes mistakes are not corrected for several years. There are rules to ensure fairness in such instances. The debt should be written off under “extra-statutory concession A19” or ESC A19 if three conditions are met: 

- did HMRC make “proper and timely” use of information provided to it; 
- could the taxpayer have “reasonably have believed their tax affairs were in order”; 
- and was notification sent within 12 months of the end of the tax year in question?

HMRC still routinely rejects applications for ESC A19. 

If this happens, you need to fight your case.

First, ask your local tax office to apply ESC A19. If it refuses, file a complaint outlining what happened, when, what effect the error had on you and why you qualify for the concession, and the matter should be put right. For a guide to the concession, see

For income tax complaints, call 0300 200 3300 or write to HM Revenue & Customs, Pay As You Earn, PO Box 1970, Liverpool L75 1WX. 

If you are unsatisfied, ask for a “formal review”. If this fails, a second review will provide a final response. The next step is to contact the adjudicator. The service is free and impartial. 

You must write within six months of a final response, providing reasons for complaint and a copy of the final decision letter. Call the adjudicator on 0300 057 1111 or write to The Adjudicator’s Office, PO Box 10280, Nottingham NG2 9PF. If you believe justice has not been done, write to your MP and ask for the matter to be investigated by the Parliamentary Ombudsman, who will look into why the adjudicator rejected your claim.

Tax does have to be taxing.

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  1. D'oh! Does Homer still feel justified in taking that £20k bonus now?
    Of course she does, it's based on self assessment (lol)!
    You make sure that what you sign up for can be exceeded before you agree and you make damp sure the real issues don't get a lot in, Kerching! £££££....
    @ny politicians left out there prepared to sound off on this and more importantly see something effective done about it?
    Oh well zzzzzzzz......��

  2. Cheaper to issue the compensation cost that actually reaches the adjudicators office than it is to actually employ staff. Capitalist economics #101.

  3. Also, just to add. ESC A19 (not an actual law) considers the dilemma that HMRC has one year to act on information provided to it.

    So, for example. Taxpayer has a company car in August 2013 - expects company to notify HMRC straight away so apparently absolves themself of responsibility (BTW no employer obligation to report car benefit).

    P46-Car voluntary now. As you didn't personally notify HMRC, then the first notification of company car may be through through 2014 P11D, which won't be submitted until after the end of the tax year (usually around July 2014) and yet still it won't be you notifying them, it will be your employer.

    So, if you are notified of a 2014 underpayment at this present time and the first notification was received after the end of the tax year 2013-14 because you never told HMRC that you had a company car that year, it leaves HMRC a long time to collect the underpayment. Here's why.

    Underpayment occured 2013-14 tax year.
    HMRC first notified of possible underpayment in 2014-15 tax year because you never declared your company benefits.
    HMRC can still request the difference if they send you a calculation in the 2015-16 tax year. Even then, if they issue the calculation in 2015-16, they will be collecting a three year old debt with no interest in certain circumstances.