The report of the House of Commons Treasury Committee Administration and Efficiency of HM Revenue and Customs contains some wise words, but will have made uncomfortable reading for HMRC.
The Committee describes the evidence it received as disturbing and records the widespread dissatisfaction with the service HMRC currently provides. It explores the causes and the potential effects of poor service standards.
The Committee notes the near unanimity among witnesses that ‘efficiency savings’ at HMRC are partly responsible for the decline in service standards and says that HMRC’s claim to have delivered £1.1 billion of savings ‘without overall negative impact on performance’ lacks credibility.
It then turns to the potential effects of poor service delivery. In the opening paragraph, the Committee says that there is ‘a serious risk that if communicating with HMRC becomes too time-consuming, difficult and expensive, respect for the tax system, and with it voluntary compliance, may be undermined.’
That conclusion must be of very serious concern to taxpayers, agents, HMRC and Ministers alike. The Committee has lifted the debate above a discussion about post response times and the effectiveness of call centres to highlight the crucial importance of effective tax administration.
Voluntary compliance is one of the fundamental principles upon which our tax system depends. The vast majority of people comply voluntarily.
They have implicit trust that a government department will deal with their tax affairs efficiently, accurately and even-handedly.
If they begin to doubt this and it affects their attitude to compliance, the so-called ‘tax gap’ will inevitably widen.
The committee's conclusion must be of very serious concern to taxpayers, agents, HMRC and Ministers alike |
That scenario leads directly to two of the report’s many recommendations. One is that HMRC should work closely with external stakeholders to ‘develop a series of performance indicators that credibly reflect customers’ end-to-end experience of dealing with HMRC and that these indicators are regularly published as part of the transparency section of its five-year business plan’.
Another is that ‘HMRC staff, particularly senior staff, spend time visiting businesses, tax charities and tax practices to see the impact of process changes on the ground’.
The Committee clearly believes that HMRC should take steps to see itself as those outside 100 Parliament Street see it. I agree.
Only then will it understand why its ‘customers’ are so dissatisfied, why this powerful Parliamentary Committee is so disturbed by what it has heard, why its front-line staff are so unhappy and why the press attacks it so regularly.
And only then will it understand what it needs to do to regain its once great reputation, a reputation that all of us who work in tax want to see fully restored.
In the words of Robert Burns:
O wad some Power the giftie gie us,
To see oursels as ithers see us!
It wud frae mony a blunder free us,
An’ foolish notion…
Wise words indeed.
Paul Aplin
Tax Partner, A C Mole & Sons
The views expressed here are the author’s own
