ICAEW Calls For Emergency Taskforce To Tackle HMRC Backlog

 

Ministers must set up a taskforce to deal with the unacceptable delays at HMRC, which are holding back the UK’s economic growth, says ICAEW.

ICAEW is calling for the immediate creation of a cross-sector taskforce to address long-standing delays at HMRC, which it says have become a drag on the UK’s economic growth.

The emergency taskforce would be charged with identifying areas for support to end delays, as well as recommending improvements to HMRC’s service standards to enable business growth, ICAEW says.

Taxpayers and accountants are having to wait up to a year for HMRC to respond to queries over the phone or by post, ICAEW says, while callers report that they have waited for more than an hour before being cut off. Customer service staffing levels at HMRC have reduced from 25,500 to 19,500 people, causing long delays for both agents and taxpayers.

These delays were the biggest area of complaint made by ICAEW members in 2022, whether relating to financial or other resource constraints. 

VAT registration for a new or growing business or re-registration where an existing business incorporates should be expected to happen quickly, the Institute says. Such businesses are growing and their administrative workload will double while they wait for HMRC to act.

ICAEW is increasingly of the view that HMRC is now trapped by its backlog and delays are now an anchor on the UK’s economic growth. The government needs to urgently tackle this issue if it is serious about building the ‘pillar of enterprise’, it says.

“The delays at HMRC are unacceptable, need to be addressed promptly and are acting as a drag on the UK’s economic growth,” ICAEW Chief Executive Michael Izza says. 

“We’re calling on ministers to set up an emergency taskforce to identify steps to eliminate HMRC’s backlog and improve its service standards, so that in the future it supports, not inhibits, business growth and maximises the tax receipts needed to fund public services.”

The taskforce should include representatives from professional bodies and from business, who would be empowered to make recommendations to HMRC to improve its services and clear its backlog, ICAEW says.

“HMRC performs a vital function supporting businesses and growth, for example ensuring new businesses can register promptly for VAT, and its work is essential in collecting tax receipts to fund public services,” Izza continues. 

“Despite this vital role and the commitment from hardworking civil servants, HMRC is often overlooked and overstretched, leading to problems, and we would be pleased to work with it to tackle these issues.”

It is unclear whether these waiting times relate to financial or other resource constraints, but the time it takes for HMRC to respond is perceived by many chartered accountants to be the single biggest obstacle to growth and tops the list of complaints by members, ICAEW says. It is a problem regardless of the means of communication being used, where intervention or action cannot be undertaken automatically.

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HMRC's Humongous Backlog

 

HMRC update on registration for Self-Assessment and issue of UTRs

24 Nov 2021

We are sharing the following message on behalf of HMRC:

“Where Self-Assessment registration forms are completed fully and all details match the information held by HMRC, UTRs will normally be issued within 10 days.  The exception to this is registrations submitted between mid-February and April, which are held and issued during April, following the start of the new tax year.

Where forms are not completed fully or data does not match that held by HMRC, these will be reviewed clerically which may cause a delay.

We are now working through the stocks of post and clerical interventions that built up over the past year, as we prioritised delivery of the government’s COVID-19 support packages, the UK’s smooth transition from the European Union and the essential services that keep the tax system running. We are now seeing steady reductions in clerical registrations, and these reductions will continue in the coming weeks, following which we will continue with our best endeavours to keep these within acceptable levels.

We understand the frustrations of customers and agents who are waiting for us to get to their individual enquiry, and we are sorry that we can’t get to everyone more quickly. In addressing our work queues, we’ve prioritised our initial efforts where we can protect livelihoods and put money in the pockets of our customer groups in greatest need.    

Customers who have advised HMRC that they are liable for Self-Assessment by the deadline of 5 October following the end of the tax year in which Self-Assessment criteria was first met, will have 3 months and 7 days from the date on the SA250 Welcome Letter to submit their return and any payment due. 

HMRC are unable to provide agents with UTRs in advance as these are system generated and issued as part of the registration process.”

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Adjudicator Backlog of Tax Cases

The Mail reports that the Adjudicator's Office, which rules on HMRC complaints, has a backlog of 1,028 cases. 

It settled just 970 in 2015-16 — half the 1,850 that were dealt with the year before.

The adjudicator said that while more than half of cases were dealt with in six months, and most within a year, 66 waited for more than a year. 

Tax does have to be taxing.

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