Report on HMRC's charter finds room for improvement

19 January 2016

Andrew Hubbard 

The latest annual report on HMRC’s charter shows that the Revenue still has a long way to go to deliver on its customer service commitments – especially when it comes to treating taxpayers as honest. Further work is needed to build public confidence in the tax authority, particularly at a time when HMRC is embarking on a profound transformation exercise.

The tax legislation imposes many obligations on taxpayers. It gives HMRC the legal right to collect tax and to administer the tax system but it doesn’t impose any ‘customer care’ obligations on HMRC.

That gap was filled many years ago when the Inland Revenue published the taxpayer’s charter, which for the first time set out some basic obligations on how taxpayers should be treated. Although the charter was never formally withdrawn it fell into abeyance until it was revised in 2008. That version was called ‘your charter’, and set out not only what taxpayers could expect from HMRC but also what HMRC had a right to expect from taxpayers: among the latter were being honest and treating HMRC staff with respect.

There has been a fair amount of cynicism about the charter, particularly the commitment of HMRC to ‘treat you as honest’. All too often people say that when HMRC launch an enquiry it feels as if they are being treated as guilty and required to prove their innocence. That sentiment is reflected in the latest survey figures, which show that only 61 per cent of individuals felt that HMRC treated them as honest. There is a long way to go. 

I welcome the fact that HMRC has taken steps to give more prominence to the charter within the department, and has created a charter committee, with a majority of independent members, to report directly to the Board of HMRC. Public confidence in the tax authority is a fundamental bedrock of a democratic society – never more so than when HMRC is embarking on a profound transformation exercise.

HMRC have not helped themselves by amending the wording of the charter to coincide with the issue of the latest report of the charter committee. Although it does appear that no fundamental changes have been made it would surely have been better, in the interests of transparency, to set out clearly what had changed. To find out what had changed it was necessary to dig deep into the internet archives to compare versions. In an increasingly digital world it will be very important to be able to access earlier versions of documents. In a tax dispute, for example, it is often necessary to be able to refer to the HMRC guidance which was in force at the time of the transaction: all too often this seems to have disappeared into thin air.

Although I am an enthusiast for digitalisation part of me feels nostalgic for the old days, when there was a beautifully hand lettered version on a wooden panel on display in the Inland Revenue’s head office – at least that couldn’t be amended at will.

If you would like to discuss any of the points raised further, please contact Andrew Hubbard or your usual RSM contact.

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