The highly critical report, which examined the administration and effectiveness of HMRC, found “considerable dissatisfaction among the public and tax professionals with the service provided”.
“The committee is concerned that if this continues it may undermine respect for the tax system.”
Responding to the criticisms, HMRC chairman Mike Clasper told a BBC Radio 5 Live audience that he was sorry for the problematic performance, and said HMRC officials were “not happy with our performance in 2010”.
‘Serious concerns’
The Treasury sub-committee inquiry identified “serious concerns” in a number of areas, including what it said were “unacceptable difficulties” taxpayers were having in contacting HMRC by phone during peak periods; “endemic delays” in responding to postal queries; and “an increasing focus on online communication” that was seen as potentially excluding those without reliable internet access.
The report also noted that the agency is expected to face “a difficult few years ahead” as it attempts to improve its service to taxpayers and benefits claimants, sort out glitches it has been having with its pay-as-you-earn (PAYE) system, and introduce a new so-called Real Time Information system, whereby employers will report tax and national insurance deductions at the same time as they pay their employees, rather than at the end of the financial year.
The sub-committee is holding further hearings on HMRC’s compliance work, and the committee “may report on this later in the year”, a statement on Parliament’s website said.
‘Simply wasn’t good enough’
In his interview with BBC Radio 5 Live, Clasper said HMRC’s performance “simply wasn’t good enough on post and telephone, and I’d like to take the opportunity to apologise to the people who had to take a long time to get through, or we didn’t get back to them quick enough with the post.”
In another interview, this one posted on the BBC’s website and available to watch here, Clasper noted that although HMRC management was not happy with its 2010 performance, when it came to bringing in the money to fund Britain’s public services — which he noted is HMRC’s job — it brought in £33bn more last year than it did in 2009, while "in terms of the activities that we do around avoidance and evasion, we increased the amount of money that we get, from £7bn five years ago to £14 bn last year".
"What we are doing is getting on with trying to improve" the Revenue’s handling of taxpayers, he continued.
"And in 2011, on most of the issues that they [the Treasury committee] raised [in their report], we’ve actually improved performance.
"Even then, we’re not happy, we have to go further, and try to get industry-level standards, in terms of the speed with which we deal with the post, and the way that people can get through immediately when they call us."
One of the problems in 2010, he went on, is that after HMRC introduced a new computer system, "we were simply overwhelmed for a period of time by the amount of phone calls that we got".
As for rumours about morale problems among HMRC staff and management, Clasper said the organisation "as I speak" is seeking to reduce the layers of bureaucracy, while also attempting to hire and properly train "the right people as leaders".
But, he added, "that doesn’t take anything away from the fact that we need to give a better service to our customers.”
As reported, five days ago McGrigors, the law firm, reported that thousands of UK taxpayers may have been wrongly fined by HMRC for paying tax late or failing to file their tax returns on time.
The law firm, which specialises in international tax and commercial law, noted that the Revenue had lost more than six cases in the last few months alone in which it has been criticised by the courts for wrongly fining taxpayers, and suggested that the recent rulings might represent only the “tip of the iceberg”.
