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HMRC Complaints & Remedy Guidance

Author

Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

AGAINST ALL ODDS: HMRC, COMPLAINTS AND ADJUDICATION

Those familiar with the work of the 18th-century English poet Alexander Pope might cringe every time one of his most notable phrases is mangled even if his intended sentiments remain the same.

“To err”, he wrote in his 1711 ‘Essay on Criticism’, “is human. To forgive, divine”.

It’s a saying which comes to mind whenever I find myself confronted with figures detailing the issue of errors and tax.

In some respects, criticisms of HMRC are wholly justified but I believe that the volume of complaints with which it deals on an annual basis illustrate nothing more sinister than its staff are human and do make mistakes.

Over the course of the last financial year, for instance, some 77,410 objections were registered both by individuals and companies, according to HMRC’s own annual report (read more…)

To underline how the Revenue is not alone in getting things wrong, the same document illustrates how a £9.2 billion chunk of the £33 billion shortfall between expected tax income and actual receipts – the so-called ‘tax gap’ – is to what it ascribes as the ‘error’ or ‘failure to take reasonable care’ of businesses and private individuals.

Of course, as Alexander Pope appreciated, having made a mistake, it’s how you behave afterwards which is critical.

In HMRC’s case, it stands accused of brushing off the majority of individuals who claim that they have been on the receiving end of wrongdoing.

The Revenue’s annual report states that “we resolve around 99% of complaints internally” and points out that those which can’t be dealt with in-house can always proceed to what is known as the independent Adjudicator’s Office.

It was initially established in 1993 to look into complaints about the Inland Revenue and has saw its brief extended to cover the newly-formed HMRC in April 2005.

Last year, the Adjudicator traced a fourth successive decline in the proportion of complaints against the Revenue being upheld (read report) – down from 85 per cent in 2014/15 to 39 per cent in 2017/18 – ableit one which still required HMRC to pay up £576,562 “in recognition of the poor level of service“.

However, the complaints process is itself not free from complaint. In fact, only one-in-40 issues raised with HMRC actually make it to the Adjudicator (source).

Those which succeed in getting that far will need to have cleared two tiers of HMRC’s own complaints procedures and must currently wait a further seven and a half months on average for the Adjudicator’s verdict, a delay which some commentators regard as excessive.

Interestingly, there is another administrative reason why the actual number of complaints handled might not reflect the kind of scale of dissatisfaction which prompted concerns among the MPs on the House of Commons’ Public Accounts Committee only this January.

By the time that the Adjudicator’s Office report was published in mid-July, it noted that HMRC was still to approve funding for the infrastructure enabling complaints to be made by e-mail “due to wider departmental pressures”.

Given the acknowledged impact of Brexit on HMRC’s already limited resources (https://www.tax.org.uk/media-centre/blog/media-and-politics/hmrc-scrap-projects-because-brexit-pressure), I wonder whether the apparent improvement in the Revenue’s complaints record may yet be reversed.

If that proves to be the case, the absence of another means by which disgruntled customers can make their feelings known might well be viewed as a blessing.

Enterprise Tax Consultants advise on all aspects of Tax Investigations.

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