Robin Williamson of the Low Incomes Tax Reform Group asks if HMRC is ready for a role in the government's Big Society

Last weekend, after a lengthy and thorough inquiry, the influential House of Commons Treasury Committee published its report on the Administration and Effectiveness of HM Revenue & Customs

Uniquely among Government departments, HMRC’s expenditure is “dwarfed by the amount of revenue it collects”.

The Committee paints a bleak picture of a Department that performs a crucial role, but whose performance is undermined by sustained cuts in resources. HMRC’s claim to have delivered £1.1 billion of savings “without overall negative impact on performance” is described by the MPs as “lacking credibility”. While the PAYE system is now beginning to stabilise, HMRC’s reputation has taken a big hit from the recent problems that led to 6 million taxpayers being either overpaid or underpaid.

The Low Incomes Tax Reform Group gave evidence to the Committee. We told them that:

“From the perspective of unrepresented taxpayers on low and modest incomes, HMRC is now too often seen as an organisation that is unable to collect the right amount of tax, increasingly difficult to contact by phone, letter or in person, yet unforgiving of customer error and relentless in its pursuit of small debts.”

By contrast, the large business community enjoys “personal contact with an individual responsible for a case and the ability of a single contact point to co-ordinate HMRC activity across departments”. This has led both to high levels of satisfaction and, significantly, to a big increase in yield.

It may not be possible to replicate that level of service for every individual taxpayer. But much can be achieved by HMRC following the Committee’s recommendation to work with “tax practices, charities and businesses [the] better to understand the people they deal with and how changes at HMRC affect them”. And HMRC must ensure that the principles set out in its “Taxpayers’ Charter” (at Your Charter) are observed consistently, particularly when dealing with those taxpayers without access to specialist advice.

From the tax charity perspective, we welcome HMRC’s overtures to the voluntary sector in recent months. The Grant-in-Aid programme by which HMRC helps fund useful initiatives for the unrepresented taxpayer should be extended and enhanced; a better-informed taxpayer community will generate more accurate compliance and ultimately higher revenue yields. This surely is fertile ground for the Big Society to flourish.

Article Added Saturday, 06 August 2011 | 461 Hits

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