HMRC’s Woes Continue

Following on from the National Audit Office's (NAO) critical report of HMRC, the department were further damned last week in a report published by the Treasury Select Committee.  

The report entitled, 'Administration and Effectiveness of H M Revenue & Customs', which draws heavily on evidence produced by the Chartered Institute of Taxation and other professional bodies, highlighted a number of areas of serious concern regarding poor customer service.

According to the report, continued dissatisfaction among the public and tax professionals with HMRC's telephone answering and post handling could “undermine respect for the tax system”. In 2010 reports by both the NAO and Public Accounts Committee described service levels within the department as poor and that measures were being taken to improve its performance.

The Treasury Select Committee referred to HMRC's own Annual Report and Accounts that disclosed that its efficiency in answering the phone had dipped from 75.8% of calls in 2009/10 to just 48% in 2010/11. HMRC's own target is to answer 90% of telephone calls as soon as possible but the Select Committee were unimpressed, describing the departments telephone call response service as patchy at best and unacceptable at worst. As such, the Committee were not confident that HMRC would be able to achieve its target.

In the area of post handling, the Select Committee had received a substantial number of letters from the public condemning the Revenue for the length of time it took to respond to post. Replies taking two or three months were not uncommon. The Institute of Chartered Accountants of England and Wales informed the Committee that such waiting times had become the norm and when an accountant contacted a tax office to chase a reply the regular response was that they couldn't find the letter. Chasing a reply less than two months old is countered with the excuse that the letter has not reached the tax office but leaving it any later to seek a reply results in having to resend correspondence as HMRC declare that they can't find the original letter.

HMRC's Debt Management Unit has been known to pursue incorrect tax arrears because relevant correspondence had not been opened.

The Select Committee concluded that the lengthy delays in dealing with post were rife within HMRC and found this to be unacceptable. In an attempt to resolve this they have called for HMRC to establish minimum service standards and a timetable to indicate when such standards are likely to be achieved.  

Further recommendations for improvement were alternatives to 0845 numbers, a suitable alternative to electronic contact, cost effective ways of providing face-to-face tax advice and heightened awareness of the impact of process changes on individuals and businesses.

The report acknowledges the demoralising effect of the Revenue's four year programme of job cuts which is due to finish this year after reducing staff numbers by approximately 12,500. The management culture, however, has contributed significantly to the erosion of staff morale as it is run on the principle of close control, providing little opportunity for employees to exercise their skills. Whilst staff attitudes towards immediate colleagues and superiors are relatively positive, the same cannot be said for attitudes towards organisational change and the management which is overwhelmingly negative.

Undoubtedly, HMRC hierarchy are facing an enormous challenge ahead to get their house in order and restore public confidence in a department whose credibility is increasingly slipping.

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