Tax News

Recent reports have increasingly highlighted the poor service coming from HM Revenue & Customs. And poor service from the taxman invariably means ordinary taxpayers pay the price.

Individually these reports and announcements would cause concern. Together though, they may be showing up a terminal decline in the way the tax office is working.

Telephone calls

A National Audit Office investigation into the way telephone calls were handled found that 44 million calls may have gone unanswered.

This is a huge figure, and it becomes more damning when it is compared with the total number of calls - just 103 million. That means nearly half of all calls to the tax office are not answered.

In the year before, 71% of calls were answered. There were more calls made this year, but in terms of percentages being dealt with, it shows a dramatic fall in the service supplied.

The call centre did respond to the report, admitting this was unacceptable. "In terms of handling telephone enquiries, the department is not currently achieving value for money," the NAO said. Measures have been proposed that, if put in place, could raise the answer rate to 90%, saving £50 million in the process.

A solution is coming, but right now the way calls are dealt with will be causing problems for taxpayers. And it gets worse.

Tax codes

It has now been revealed that multiple tax codes are being sent out to individuals, with conflicting information shown. This could mean the recipient pays more than £1,000 too much tax.

The Chartered Institute of Taxation is demanding action on this. It is insisting the government must now clarify the full extent of the problem. They are also asking for more publicity and explicit guidance on how to check if your code is correct and what to do if it is not.

Is your tax correct?

Tax post

Our own statistics show failings in the tax office too.

Looking at the post from one section here, almost 10% of all correspondence from the tax office was telling us they had lost our letter.

This is clearly unacceptable and we of course fight for our clients' rights. What about the people who do not have professional assistance? What happens to them? Do they phone their tax office? Given the figures quoted above, that may not help.

Take the situation where someone gets two tax codes in error and writes to get them fixed. The letter is one of the 10% that go missing. So that person phones up, only for the call to go unanswered.

The culmination of this series of mistakes will possibly be an overpayment of tax from April. The tax would eventually be repaid, but it could mean hardship or worse.

Tax redundancies

A recent announcement was made that 130 tax offices are to close, with 1,700 trained tax officials being made redundant. Tax office staff don't have the most glamorous occupation, but it's a vital one.

Mark Serwotka, general secretary of the tax office workers' union PCS, said: "It is no coincidence that as HMRC staff have been cut, the amount of uncollected tax written off as doubtful has nearly doubled. There is over £130 billion which is uncollected, evaded and avoided which could go towards closing the public deficit.

"Closing offices and slashing jobs makes no economic sense and will do nothing to help the recovery. Rather than cuts the government should be investing to recoup the lost billions in tax."

This makes absolute sense.

Given a de-motivated workforce, with glaring errors in the computer system that have to be put right and what appears to be a substantial under-manning of the telephone service, is now the right time to lay people off? It will save money in the short term, yes.

Surely though it makes more sense to have enough staff and a computer system that works? It's simple logic. If the staff don't have to spend all their time fixing mistakes that are not of their making, they have more time to go after the unpaid tax.

By Julian Shaw, TWD Accountants. January 19, 2010.