HMRC has a charter that sets out the standards of behaviour and values it should demonstrate in dealing with taxpayers. It must produce an annual report reviewing its performance against these standards.

ICAS belongs to the Charter Stakeholder Group (CSG) which is made up of representatives of the tax community. We raise your feedback about HMRC service standards at regular CSG meetings and we give input to the formal CSG contribution to the annual report.

Charter report 2023 to 2024

The report was published on 30 July. Sir Jim Harra, Chief Executive of HMRC, acknowledged that this year HMRC faced serious challenges in delivering customer services because of financial pressures and the need to manage a growing number of customers with complex affairs. This meant that some people struggled to get the help and support they needed.

Jen Tippin, Chair of HMRC’s Customer Experience Committee, also noted that helpline performance was well below the service standards expected and many customers were both disappointed and frustrated with their experience. Significant improvements have to be made quickly.

Harra specifically referred to the proposals to close or restrict several helplines from April 2024, which had to be dropped in the face of widespread concern. He went on to say that HMRC continues to make progress on expanding and improving online services. We have given feedback about areas where online services for agents need to be improved.

CSG contribution to the report

The CSG provided an overall assessment of, and commentary on, HMRC’s performance against the individual charter standards.

Many of you completed the CSG survey earlier this year to tell us about your experience of dealing with HMRC. As in 2023, we asked respondents to give a score out of 10 for its performance against each standard, with 10 being the highest. We also asked what HMRC does well, and what it could improve. We were pleased by the high level of engagement, with respondents taking an average of eight minutes and 13 seconds to complete the survey and providing 12,524 freeform comments. We have shared the full results with HMRC.

As with last year’s report, complaints about HMRC’s service levels dominate the feedback and heavily influence the scores. “Being responsive” scored the lowest of the standards, with an average score of just 2.4 out of 10. “Making things easy” and “getting things right” scored slightly higher, but still poorly, at 2.8 and 3.5 respectively. Consistent with last year, these three standards are by far the lowest scoring, which is disappointing as between them they represent the health of the tax system.

Typical feedback indicated that, while straightforward issues are often dealt with well, more complex issues are difficult to resolve. “Most agents contact the Revenue because they require assistance with something beyond the basic understanding that is generally covered online – this is something that is becoming increasingly difficult to obtain” was a representative comment. The challenge of shifting taxpayers and agents from phones to online channels was summed up with: “If I was able to do it via the website, I would not be wasting my life on hold”.

The remaining five charter standards typically address the context in which HMRC operates, and these scores are higher, particularly around mutual respect and data security, the latter scoring the highest average rating of 6.8. Interestingly, taxpayers scored HMRC lower than agents in each of these five categories – that is something HMRC may wish to reflect on.

Our survey also addressed awareness and HMRC’s accountability. Seventy-eight per cent of agents were aware of the charter, compared with 68% of taxpayers. This represents a slight reduction in agents’ awareness, but a significant increase (12%) from last year in taxpayers’ awareness. While relatively modest numbers of taxpayers completed the survey, this suggests that HMRC’s work to promote its charter is paying off.

Eighty-eight per cent of respondents do not think that HMRC is held sufficiently accountable for its performance against the charter, with only 3% saying they are (the remainder are unsure).

Invest to improve service levels

In recent years we have repeatedly called for more investment in HMRC, so that it can improve its service levels and deliver user-friendly systems. The annual charter report reinforces the need for urgent action to tackle its problems.

We were pleased to be asked to attend a roundtable meeting on 24 July with James Murray MP, Exchequer Secretary to the Treasury (XST), to discuss how the tax system can support growth. The XST now has responsibility for HMRC, so it was a good opportunity to highlight our priorities for action.

Read the article in full

Justine Riccomini, Head of Tax (Employment and Devolved Taxes), on the recent HMRC letters

HHMRC has recently finalised communications to employers and contractors in relation to the Construction Industry Scheme (CIS), with letters starting to be issued in late July. This concerns the CIS to ensure the correct tax deductions are being made by contractors.

A second communication was sent out to agents about potential self-assessment discrepancies in 2022-23 returns relating to P11D and P14 claims, and the high-income child benefit charge (HICBC).

CIS

According to HMRC the main aim of the letters is to prompt contractors to make the correct CIS tax deductions by verifying the CIS tax status of their subcontractors and ensuring they apply the correct deductions on all payments. This follows what HMRC says was evidence that “some contractors have made incorrect CIS tax deductions”. It requests contractors to verify their subcontractors and sets out the steps for helping them get their deductions right.

You can read the letter in full by following the link below.

HICBC

HMRC also says the Agent Compliance Team (ACT) is writing to engage with agents who have multiple clients exhibiting a P11D risk, P14 risk and/or HICBC risk so they can work with agents to agree with their clients an amendment programme to rectify any errors made in their 2022-23 tax year self-assessment return.

HMRC wrote: “We are asking the agents to contact ACT to discuss the taxable benefits, PAYE details, or potential HICBC liabilities of specific clients – details to be provided to agents upon contact/request. This is with a view to enabling agents to support their clients in correcting any errors as necessary or understanding any discrepancies.

“The intention here being that a conversation with ACT will give agents the chance to work with the team to ensure any errors can be amended to reflect the correct position or discrepancies explained as necessary with one caseworker without the need for formal case enquiries, thereby removing some of the administrative burden of tackling these discrepancies individually, in a varied manner and at different points in time.”

The letter stresses this isn’t a formal enquiry or compliance check and that agents are not obliged to contact HMRC. ACT will attempt to contact agents in the coming weeks, although agents are welcome to initiate contact to arrange a suitable time.

Again, you can read the letter in full at the link below.

Read this article and the HMRC letters in full

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Chris Campbell CA, Head of Tax (Tax Practice and Owner Managed Business Taxes), on the latest updates to government plans to remove the special tax treatment of FHLs. Read more on this issue.