Where is HMRC’s accountability amidst aggressive enforcement and falling customer service levels?

By Joshua Toovey , Senior Research and Policy Officer, and Fred Hicks , Senior Policy and Communications Adviser

Whilst we shouldn’t always look to draw comparisons with the great miscarriage of justice that is the Post Office Scandal, it’s only natural to question public sector bodies that are empowered to pursue the public – in this case taxpayers – for lifechanging sums of money.

Quite rightly, many political commentators and MPs from across the political spectrum are now taking a much closer look at the work of HMRC.

A debate just last week in the House of Commons on the Loan Charge saw MPs lambast the way HMRC has carried out these investigations and also, interestingly, the way that it operates as a government department with seemingly minimal oversight by Ministers.

In recent years, we’ve also seen life-changing sums demanded from around two-thousand contractors under Managed Service Company legislation.

Who are HMRC accountable to?

In short, the MP serving as Financial Secretary to the Treasury is responsible for HMRC. But, these Treasury Ministers come and go at an alarming rate. How can they possibly be expected to understand the nuances of deeply complex tax policy?

Instead, they rely on the advice and judgement of HMRC civil servants, seemingly giving these senior officials significant autonomy to dictate the UK’s tax policy and investigations with limited democratic oversight. It’s surprising that the Minister responsible for our tax office is only a relatively junior position within the Treasury given the huge sway that HMRC holds over the activities of government.

It’s common in governments around the world to have a separate and dedicated Finance ministry – the UK’s Financial Secretary doesn’t even attend Cabinet.

To be clear, there is some accountability to Parliament. The Public Accounts Committee (PAC) does a vital job of holding senior officials at HMRC to account, but even their remit does not go far enough in ensuring that they are acting in the interests of taxpayers and with due care.

It is also telling that when the PAC wants answers on the activities of HMRC it goes straight to the officials and not to the Minister responsible for the department.

Falling customer service levels

Without warning, HMRC changed the way that it responds to self-assessment queries last month, temporarily suspending its self-assessment helpline so it could shift resources to other priorities.

Whilst the move towards digital services is inevitable, it was the lack of warning and lack of discussion with stakeholders such as IPSE that caused alarm. We would have made the point that those with complex self-assessment queries cannot always find solutions from webchats.

Similarly, not every taxpayer is comfortable using the online support services, nor have all taxpayers access to a strong broadband connection. And ultimately, a real-life conversation with a human is often the simplest way to solve a tax question.

IPSE research from last month reveals that over two-fifths of those with dealings with HMRC (41%) were either somewhat or very dissatisfied with their overall experience.

When HMRC seem to be more concerned than ever with the tax affairs of contractors – even increasing their resources available for compliance activity in this area – why is it that they can’t expect the same level of priority in customer service?

With an election looming, this will form a key part of our engagement with political parties. We will continue to press the need for HMRC to adopt a more taxpayer centric approach to tax policy and continue to work closely with HMRC to improve these processes.