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HMRC’s new Charter should be key in helping you to understand your rights, obligations and what you are entitled to expect from the taxman, as Kelly Sizer of LITRG explains. 

How the story began

Once upon a time there were several separate Government Departments which merged to make up what is now called HM Revenue and Customs (HMRC). This single entity is what most people probably generally think of as the ‘taxman’, but HMRC’s responsibilities are wider than just ‘taxes’.  They include administering National Insurance contributions (not technically speaking a ‘tax’!) and various ‘benefits’ such as tax credits, child benefit and – new this year – the Health in Pregnancy Grant. 

Some might remember that the former Inland Revenue used to have a ‘Taxpayers’ Charter’ to help people understand their relationship with the taxman, but over the years this rather seemed to fade into the background. 

In response to pressure from various professional bodies, including the Chartered Institute of Taxation (of which the Low Incomes Tax Reform Group is an initiative to promote awareness of issues for those who are unrepresented and on low incomes), HMRC last year launched a major consultation exercise to develop a new Charter. 

Where are we now?

After many plot twists and turns, we are now nearing the final Chapter. ‘Your Charter’, as HMRC are to call it, will be launched some time this autumn. In response to pressure throughout the consultation process, the Charter will also now have the backing of a clause in the law which will hopefully mean it retains an important place in the running of the tax system for the future unlike the old Inland Revenue charter. 

We feel that HMRC’s consultation team have done well, listening and adapting throughout the process, to produce something that unrepresented taxpayers will be able to use and will find useful.

But although we are now generally content with the draft Charter (which can be found at Annex A of HMRC’s response document), we feel some final tweaks are necessary. In the hope that they will be addressed before publication and not get lost in the race to the end, we have now submitted our comments to HMRC.

The points we raised included:

• The description of HMRC’s ‘role’ should not be given more prominence in the main body of the Charter than an emphasis upon rights and obligations – the latter being what the Charter is supposed to be all about. 
• We hope that testing of the Charter before its launch will include a discussion on accessibility requirements; for example, in terms of meeting disabled people’s needs.
• It might be possible to improve the language used; for instance, it may be that using the phrase ‘talk to us…’ is not ideal, as it could be seen as excluding those with, say, speech impairments. 
• The draft Charter refers to representation and states in the detail: ‘You should always check that your representative has the right experience and knowledge to help you.’ But we would like HMRC to reconsider what this really means – for example, how is a lay person with little knowledge of tax able to check to find out that one representative has the right experience and knowledge or that another representative has not?  
• Many unrepresented people are unaware of what to ask when contacting HMRC. We have therefore asked that HMRC remove the qualification in bold in this statement: ‘we will…explain why we need information, if you ask us to’. HMRC should offer such explanations as a matter of good customer service, without having to be asked.
• The Charter should inspire HMRC to offer a joined-up service, both internally and in terms of working across government. Whilst the revised draft acknowledges that HMRC work closely with the Department for Work and Pensions, we would prefer to see an even wider commitment – after all, HMRC also has working relationships with others such as local authorities and the Student Loans Company.
• Finally, and perhaps most importantly, one of the ‘rights’ in the revised draft is not balanced. It clearly states that HMRC will ‘identify people who are not paying what they owe’. But nowhere does it state that they will ‘identify people who have paid more than they owe’ or ‘repay such people and give them interest where appropriate’. 

A happy ending… or just the beginning?

Fortunately we have moved from a document reflecting the HMRC Vision with its somewhat aggressive language and prioritisation of collecting money over customer service, to a much more balanced approach. The big issue for us is whether the softer, more understanding, more collaborative tone of the Charter will hold sway over the harder Vision. Time will tell.

The approach set out in the new Charter must now be embedded within HMRC at all levels for the Charter to become a taxpayer safeguard in the truest sense.

Fortunately, the process does not stop at publication of the Charter. We recommended that groups that consult with HMRC be put in a position of influence and to monitor how the Charter is actually operated in practice. We were therefore pleased to see an announcement in Parliament about the formation of an Advisory Committee. This needs to be drawn widely from those groups and people who see how HMRC operate on a daily basis, so that the Charter really is made to do ‘what it says on the tin’. 

Useful Links

LITRG’s consultation responses can be read in full on their website.