HMRC has recently published two reports on its performance. One explores grass roots attitudes to tax and HMRC among people, tax agents and small businesses. The other is aimed at gathering the opinions of ‘stakeholders’ chosen from a list provided by HMRC and including MPs.
Attitudes to tax evasion
The main report asked for opinions on tax evasion, defined as ‘deliberately understating income for tax purposes.’ Shockingly, 6 per cent of agents surveyed considered tax evasion acceptable under some circumstances and 1 per cent considered it always acceptable. These figures seem to have remained stable since 2016, despite the hardening of attitudes in society to tax evasion and opposition from most tax professionals.
Figures for small businesses were marginally worse than agent’s figures, as 8 per cent considered evasion sometimes acceptable. It is some comfort that these attitudes were at least better than those of the general public, where 15 per cent considered tax evasion was sometimes alright and 2 per cent said always. Given the overall pressure to highlight and fight tax evasion these figures are disappointing.
Professional attitudes to tax avoidance, done by exploiting legal loopholes to avoid paying tax, were similarly disturbing, with 30 per cent considering this sometimes acceptable and 7 per cent always. This however has reduced from 35 per cent and 10 per cent respectively in 2016.
Attitudes to HMRC
HMRC did relatively well with taxpayers’ attitudes to them. 73 per cent of taxpayers felt HMRC were fair, 62 per cent approachable and 55 per cent felt they showed empathy about the taxpayer’s position. However, 15 per cent of individuals said HMRC had made errors on their tax in the last twelve months, a worryingly high figure, and only 45 per cent felt these were fixed correctly. Even more concerningly, 26 per cent felt the errors were dealt with poorly. For small businesses the HMRC error rate was 8 per cent but 34 per cent felt these errors were dealt with poorly. Bearing in mind this related to HMRC correcting its own errors, this level of satisfaction is disappointing.
It is informative to compare the above with the survey results for ‘stakeholders’ who would appear to be people like MPs and large businesses described as having ‘long-standing relationships’ with HMRC. These taxpayers seem to have a much smoother experience and to be satisfied with HMRC performance. Can it be a coincidence that such taxpayers are generally dealt with by specialist units, which are likely to contain the most well-trained and experienced staff? It would have been interesting if these respondents had been asked the same questions as the regular group.
Overall, the first report throws a surprising light on how much tax evasion is apparently considered acceptable, despite the general perception that it is becoming less so. It also suggests that there are questions about the level of service received by general taxpayers compared to ‘stakeholders’. Whilst clearly different types of taxpayers need different services it seems inequitable if the quality of customer services for influential taxpayers exceeds that for the majority of us.