HMRCs Performance Review Q3 - A critical review

Today (10 February 2022) HMRC have published their?quarter 3 performance update , covering October to December 2021.

Link below

https://www.gov.uk/government/news/hmrc-performance-update-solid-progress-in-a-year-of-recovery

Tax Debts Help & Advice have reviewed this, alongside our review previous review of the National Audit Offices performance review on HMRC following COVID ( https://www.taxdebtshelpandadvice.com/tax-debts-following-the-pandemic-through-the-eyes-of-the-national-audit-office-nao-and-tax-debts-help-and-advice/ )

The report opens with a sentence stating

"Over the course of the pandemic, we made choices about the work we prioritised in order to protect our essential services and the livelihoods of our customer groups who need it the most. We prioritised the COVID-19 support schemes, the UK’s smooth transition from the?EU?and the essential services that keep the tax system running"

From an end user perspective, the mere fact that HMRC prioritized everything else has meant a large back log when it came to assisting agents and clients who want to discuss tax issues and payment plans in more depth. After spending well over an hour+ on hold, clients were being told to call different payment support lines, who in turn failed to answer. it would seem that the phones were only being answered by junior support staff, who, frankly, didn't have a clue!

HMRCs bland comment goes on to say "These urgent priorities meant that some of our customer service levels weren’t where we would normally expect them to be"

HMRC go on to advise "We’re still supporting customers who are experiencing financial difficulty as a result of the pandemic. For the second year running, we announced the waiving of late filing and payment penalties for Self Assessment customers for one month. We also provided Time to Pay allowances for the hospitality and leisure sectors. Since 5 April 2021, more than 30,000 taxpayers have used the self-serve Time to Pay service online to manage their Self Assessment liabilities, totaling around ￡75 million.

We understand the frustrations of customers and agents who have been waiting longer than normal for us to deal with their individual enquiry. We are genuinely sorry that we haven’t got to everyone more quickly – and thank you for bearing with us during this period."

What HMRC fail to comment on are the millions of tax payers and businesses who can't utilize their 'self-serve' systems as the system rejects a time to pay plan as the client needs longer than HMRC 'online' are prepared to give.

There is a fine balance between paying back tax arrears and having the ability to save for upcoming taxes.

One criteria of a time to pay with HMRC, is that new liabilities are then paid in full & on time. We expect, as a business, to see a dramatic number of TTP cases, which have simply been agreed online to unfortunately fail.

The basis of this comes from the mere fact that people will agree to plans that, at that time, may be affordable. However day to day life is different. Suddenly something crops up, new liabilities become in jeopardy as maintaining the TTP is now taking all disposable income. By virtue of this, the minute a new liability isn't paid, the clients TTP will fail.

Further to this is the fact that many clients who are contacting us, require longer periods to pay their tax back over, on the basis of ensuring new liabilities are catered for - HMRC are offering zero assistance here & again, clients then enter the cycle of being passed from pillar to post within HMRCs support lines!

In regard to HMRCs telephone lines - They state the following "We’ve also reduced the average speed of answer on our phone lines from a high of around 15 minutes in the final quarter of last year down to around 10 minutes in quarter 3. In December, average waiting times dropped to 9 minutes – and within this, customers on many of our helplines were experiencing shorter wait times. For example, average wait times on our personal tax and debt management lines were between 7 and 8 minutes in December – and in the same month we took around 6 minutes and 5 minutes respectively to answer National Insurance and?PAYE?customers."

Real world view - No telephone line we use as an agent to any Debt Management unit is answered within those quoted time frames. This would therefore be the same for any tax payer contacting HMRC themselves.

Q3 Report goes on to say "We’re continuing to support people to pay where they can, including through affordable instalment plans - nine out of ten of which complete successfully. But we are also using enforcement powers if customers are unwilling to discuss a payment plan, or they ignore our attempts to contact them – and will consider taking insolvency action where appropriate, but only as a last resort."

Clients who have called us, after trying to deal with HMRC direct, advise the complete opposite, and we in turn, hear this too. HMRC are not offering longer term plans without a fight to get mere logic applied to the clients situation/COVID issues through to a HMRC agent. We have been arguing/advising HMRC for over two decades that allowing longer, sustainable plans would in turn give them a higher success rate and better debt return statistics - Yet it's still a fight!

HMRC are also still threatening enforcement action to clients, who are simply seeking support. This is especially paramount in certain departments & we must stress here that those departments DO NOT have the power to take the action they are threatening, they would have to refer a debt on. By referring a debt on, this in turn provides agents & clients another department to engage & liaise with (where no further enforcement action has actually been taken)

Overall HMRC may present improving figures, but on a day to day basis they are failing tax payers. HMRC are human, errors occur and sometimes agents personal opinions count, rather than logic and the sense to support a business during these difficult times.

If you have any issues with business debts & HMRC, or just need some financial support to boost your cash flow, we are able to help.

Message me any further information.