'Abysmal' HMRC is failing taxpayers

Updated on 04 November 2015 | 7 Comments

Fears that thousands may be paying the wrong amount of tax, after report exposes 'abysmal' customer service from HMRC.

The customer service offered by HM Revenue & Customs (HMRC) has been described as 'abysmal' in a new report from MPs, with fears raised that it is actually costing the country money.

Research by the Public Accounts Committee (PAC) found that HMRC responded to only 72.5% of telephone calls in 2014-15. That has now fallen to a frankly pathetic 50% in the first half of this year.

If you are one of the lucky ones who manage to get through to the tax office, you are likely to be kept waiting before you speak to an advisor. The report states that less than 40% of calls were answered within five minutes.

“HMRC must…rapidly improve its customer service, previously described by the PAC as abysmal and now even worse – to the extent it could be considered a genuine threat to tax collection,” said the PAC’s chairman, Meg Hillier.

“It beggars belief that, having made disappointing progress on tax evasion and avoidance, the taxman also seems incapable of running a satisfactory service for people trying to pay their fair share.”

The PAC added that more people are likely to pay the right tax when they find HMRC helpful and easy to deal with, which isn’t the case at the moment. With so few people able to speak to the taxman, it raises the question of whether many people are actually paying the right amount of tax.

Back in June HMRC announced that is was setting aside £45 million to improve customer service. The PAC now wants the tax office to produce a detailed plan explaining how it intends to make the service better.

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Tax avoiders "running rings” around the taxman

While the majority of people are paying their tax, and many struggle to get hold of HMRC to discuss their tax payments, rich tax avoiders are “running rings around the taxman”, according to the report.

The tax office has failed to combat offshore tax evasion, with only 11 prosecutions since 2010. “We are deeply disappointed at the low number of prosecutions by HMRC for tax evasion,” said Hillier. “We believe it’s important for HMRC to send a clear message to those who seek to evade tax that the penalties will be severe and public.”

The report added that there was a secondary tax avoidance issue due to schemes “operating legally but gaining advantages never intended by Parliament”.

HMRC has also failed to report on the scale of aggressive tax avoidance meaning Parliament “cannot assess whether tax law is working as intended”.

Hounding the vulnerable

A separate report from the Adjudicator's Office provides yet more bad news for the taxman, with the accusation that thousands of elderly and vulnerable taxpayers are being pursued for tax debts they shouldn't have to pay, while having legitimate complaints wrongly dismissed.

Incredibly nine out of ten taxpayers who take their case against the taxman to adjudication win.

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