If you pay tax in the UK, it’s HMRC (Her Majesty’s Revenue and Customs) who take the payment. They also issue fines for anyone who doesn’t make a return when they should, and they are pretty strict when it comes to following up on missing money. Or at least they are supposed to be.
Recently, however, the failings of HMRC were brought up in Parliament by a group of MPs from the Public Accounts Committee (PAC) who have suggested that the body is totally failing UK taxpayers. They have even said that customer service is so bad that it could be affecting how taxes are collected, which means that the wrong information is making people pay too little, too much, or too late. And then the wrong people are being chased for payment which HMRC calculated incorrectly in the first place.
How? Some of the problems include unanswered phone calls (at the start of 2015, only 50% of calls were being answered, with just 39% of those that were answering being picked up within the target of five minutes), misleading information, and missing tax returns. The best advice when dealing with HMRC is to keep any and all evidence of having contacted them, and try not to do it over the phone if it can be helped at all. But is it really fair to ask the general public, including business owners and self employed workers, to prepare themselves for HMRC’s failures by taking additional safety measures? Isn’t that like taking your own parachute on a plane just in case the pilot gets it wrong?
Surely when it comes to taxation, the body that has been charged with taking our money should at least be up to the job?
HMRC have denied that there are any problems, at least any significant enough to cause issues with tax payments, but despite that 3,000 additional staff have been recruited in order to help.
Another issue is its records or prosecutions. There have been just 11 – really – prosecutions regarding offshore tax evasion since 2010, and even though there was a list of 3,600 British names of people who were using accounts in Switzerland to hide their money, only one of those people has been prosecuted. It’s not exactly the deterrent it was supposed to be… The reason behind this ‘woefully inadequate’ (to quote the PAC) prosecution rate is that people have been offered reduced penalties for information. It happens all the time, but surely that should mean more – larger – prosecutions? It doesn’t seem to be the case. It’s just not working as it should be.
So with honest, hard working people unable to speak to HMRC about their tax questions – and incurring penalties due to lack of information (assuming they haven’t been given some and it was wrong), and tax evaders not facing prosecution it seems that something has got terribly mixed up at HMRC.