1. Introduction

During a recent Northern Ireland Tax Committee meeting a number of the Committee Members raised some concerns regarding a perceived deterioration in the level of service provided to both agents and ultimately taxpayers dealing with HM Revenue & Customs.

As part of our remit to represent our Members on such issues, we felt that there was a sufficient quorum of evidence at the Committee meeting to justify opening up the issue to all of our Members in Northern Ireland so that we could make an informed and representative submission to HMRC on their behalf.

These delays cover all types of communication with HMRC and a wide range of matters and there is strong evidence from the responses we received that these issues are consistently being experienced by our members in their day to day business.

Therefore as part of our representations work on their behalf, we would like to share those experiences with HMRC so that we are able to open up dialogue on these issues and address these concerns in a proactive and positive manner.

Members are also concerned that they can no longer contact NI Counties Area offices to resolve queries on behalf of clients with all calls relating to NI taxpayers now dealt with through Agent Dedicated Lines manned on the mainland.

We are also aware that PAYE phone enquiries are no longer dealt with at HMRC Ballymena. As yet, Agents have not yet been provided with a telephone number to contact the office at Longbenton with the result that many queries must be submitted in writing with long delays experienced in receiving a response. Often a response letter is followed by a request for further information causing a further delay.

Members also report that it is very difficult to get through to the Longbenton team by phone, in the past it was possible to phone the PAYE enquiry team direct to Ballymena.

We are concerned that services have been moved out of Northern Ireland and there is a strong feeling amongst our members that this has largely contributed to a decline in service provided to our members and, ultimately, taxpayers in Northern Ireland.

We have grouped the various responses received under several headings and would stress that these have all been compiled from individual responses received from members.

2. Issues identified

Key concerns identified are:

2.1 Communications

Telephone

• Continued problems in making contact with HMRC to resolve issues due to the reliance on telephone contact, with calls not being answered, not being able to get through or not getting through to the right office first time

• This can be particularily difficult where a client's return has always been filed online and the Agent has no correspondence denoting which HMRC office is dealing with the client.

• Difficulties in resolving problems first time when dealing with HMRC's contact centre staff, rarely able to resolve queries in one phone call
• Revenue leaving messages for agents to return calls but no client names or reference numbers given
• Very slow response time when telephoning HMRC automated systems-often enduring a long automated process to be told to call back later
• Failure by HMRC to action, on a timely basis, referrals passed on by call centers to other HMRC departments
• Calls being returned by leaving messages on answer machines at out of hours times
• VAT Helpline number – can be phoned several times a day for a consecutive number of days with either an automated, engaged tone or no response (and in one case the automated message hanging up)-queries then emailed which took in excess of a week to resolve
• Agents being asked to ring another HMRC department to pass on some information rather than it being officially passed on through internal means
• HMRC failing to respond to technical queries, resolution of the issue on HMRC's system without recourse or explanation to the agent

Post

• HMRC being unable to advise where post is after post having passed through a chain of offices and once post is located no timescale given for the matter to be dealt with e.g. EIS deferral applications seem to be particularily problematic
• Delays in dealing with post, including the processing of paper returns, tax repayment requests and VAT registrations which were subjected to further security checks even though they did not appear to be high risk and the paperwork was all in order
• Post appearing to go missing and Agent advised to stop cheques followed by the original post and correspondence turning up later and causing issues with interest, penalties, cheques needing to be stopped etc
• Call centres not able to say which office would be dealing with post
• Correspondence from HMRC not having the agent reference thereon – difficult when agents have a large number of clients with the same surname and initials

2.2 Agent authorisation

We received a large number of responses from members expressing concern in respect of the process for agent authorisation. We are aware that there are many reasons for delays in the agent authorisation process and we note HMRC are seeking to address this by being more transparent about turnaround times and by seeking to address key reasons for delays. As a result, we are keen to let these processes ‘bed down’ before re-evaluating if discussion on this area is warranted.

2.3 Collection issues

Repayments/refunds

Delays in processing repayments were a particular concern with many of the Members who contacted us. We have examples of long standing delays for various reasons including:

• Repayments made to the wrong taxpayer
• Security checks on repayments taking 6-8 weeks
• Delays in responses to follow up calls on repayments (often with no response or call back)
• HMRC staff unable to provide detail as to why a file has been pulled for a security check or when refund will be issued
• Long delays between time that refund is agreed and reflected on HMRC system and actual money being received
• Lack of consistency of service on repayment claims e.g. one partner receiving the refund months after another
• Refunds appearing overlooked and not processed despite paperwork and proper procedure having been followed

We are particularily concerned that the long delay in making repayments can have a serious cash flow impact on businesses in the current economic climate.

Debt collection

• Collection letters failing to recognise that a ‘time to pay’ arrangement has already been made
• Calls to agents from HMRC collection depart-ment to follow up on non-payment of tax by taxpayers without direct recourse to the taxpayer when appropriate to do so
• A long turnaround in agreeing time to pay arrangements with the Business Payment Support Service and a lack of proactivity on HMRC's part despite the agent and taxpayer satisfying the information requirements on a timely basis
• Collectors office aggressively pursuing debt ‘arising’ as a result of an unresolved technical matter not having been addressed by the Inspector involved despite follow up by the agent

2.4 Corporation tax

• Closure of NI Counties Area offices dealing with Corporation tax leading to a difficulty in making contact with HMRC staff now dealing with CT in Aberdeen
• For unusual returns, a difficulty in reaching clarity on where to file
• Has also resulted in increased correspondence and time spent resolving queries whereas it was possible previously to phone the Inspector responsible and in many cases resolve the matter in one call
• Telephone number for the Aberdeen centre constantly engaged and unreachable
• Returns very slow in being processed and being logged on to the system as received on the logging date and not the actual date of receipt resulting in incorrect penalty notices being issued and requiring appeal

2.5 Enquiry cases

• Long delays by Inspectors dealing with cases despite the agent having complied with deadlines under time pressure and with the threat of penalties
• HMRC opening enquiries outside the statutory time limit
• Duplication in information requested causing unnecessary delays
• In one particular case where an Inspector retired – no correspondence on the Enquiry was received from February 2010 to September 2010

2.6 Paye

P35 process

Our members also advise that it can take up to four months after the 19 May deadline to notify an Agent that a P35 has not been received. By that time, penalties of £400 have already been accrued. Agents also have difficulty understanding why P35 repayments are not automatically issued, nor carried forward for offset in the following year without a written request. This has resulted in taxpayers being pursued by HMRC's Recovery Office even though the overpayment due cancels out any current year liability outstanding.

Coding notices

A significant numbers of errors in PAYE coding notices are experienced on an ongoing basis and as you are no doubt aware these were exacerbated earlier this year by the coming online of the new NIC and PAYE service. We are aware of the actions HMRC have taken to address this issue and welcome the ongoing updates provided as part of this which continue to enable us to inform our members of progress in this area.

Manual P35's for companies which are not required to be filed on-line are, in some cases, not sent to the company. In cases where the company has already had CIS tax deducted from their income, this has significantly delayed the offset/repayment of that tax as the situation could not be addressed until the P35 was submitted and processed;

2.7 Miscellaneous

• When complaints are made by members – often these are not resolved and the complaints department seems unable to offer an explanation for the outcome and service level experienced.
• Errors in processing returns where relevant detail included in Additional Information box was not processed.

As a general point HMRC need to be more open about delays, the reasons causing them and when resolution can be expected so that agents are able to appropriately advise the taxpayer – damage can be caused to the client relationship when HMRC do not communicate as often this can be perceived as a lack of action on the agent's part.

3. Conclusion

We are concerned that the structural changes which have already happened at HMRC as part of the ‘Change Programme’ seem, in some important areas, to have resulted in a decline in the standards of services that taxpayers have a right to expect.

We appreciate that HMRC has made progress in some areas and has plans in place to address other areas of concern however this is against a background of extremely challenging budget cuts. As a result we remain concerned that the ongoing public sector cuts by Government and in particular those announced in the October Comprehensive Spending Review could result in a further deterioration in the service provided.

As a recommendation we believe that HMRC should work with the professions to develop a better set of key performance indicators for service delivery so that these have the buy-in of all the key stakeholders. These should be measurable, robust and transparent with the ability to aid HMRC in prioritising its key services to both agents and taxpayers. There can be no doubt that this would be of public benefit as well as helping improve agent confidence and would assist in the drive to improve service standards.

We look forward to working together with both Government and HMRC under the auspices of the Agent and Advisers Steering Group to ensure the standard of service provided by HMRC matches the expectations of key stakeholders.

Source: Chartered Accountants Ireland. www .charteredaccountants.ie