HMRC's Turning Circle

The tax tribunal system brought in by the government appears to be being overwhelmed and log jammed by the caseload being imposed on it.

Accountancy reports that Ministry of Justice (MoJ) figures show that there are over 22,000 tax disputes that are waiting to be heard.

The number of unheard cases were 22,100 in the fourth quarter of 2011, while those heard increased from 9,100 in 2010 to 11,000 in 2011.

Ian Hyde, partner at Pinsent Masons, is quoted:

"The increasing number of tribunal cases being heard is indicative of the pressure HMRC has been under to clamp down on tax avoidance and deliver extra revenue for the government during this period of tight public finances.

The backlog shows that the system is getting clogged up. There are simply too many cases to handle and something is clearly wrong with HMRC’s approach. True, budget cuts might not have helped HMRC, but they need to adapt more effectively to the situation.

Centrally, HMRC seems to have genuine enthusiasm for change. 

However, it takes more than just a policy change or an announcement to change things on the ground. 

The experience for many taxpayers in dispute with HMRC is still one of confrontation rather than consensus. 

There needs to be a real sea-change in culture at HMRC if a more consensual approach is to be adopted, but turning around the HMRC oil tanker is going to take a lot of time and effort."

It is true enough that, with any organisation, a policy change (for it to be effective) requires more than just a memo and a new procedure to be issued. Real change needs to occur on the front line, both in terms of attitude and procedures.

What are people's experiences, if any, of the tax tribunal system?

Is HMRC demonstrating a more "consensual" approach?

Tax does have to be taxing.

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