MPs raise concerns about HMRC performance in annual review

MPs (BSE: MPSLTD.BO - news) have published a report raising concerns over the performance of the UK's tax authority.

Customer service, tax transparency and how multinational companies are dealt with were identified as particular areas of concern.

The Public Accounts Committee (PAC), which oversees the government's finances, said that Her Majesty's Revenue and Customs (HMRC) had no credible plan on how to make savings within the organisation without damaging customer service.

It called on the tax authority to avoid "repeating the mistakes it made two years ago" when it introduces its planned new digital systems, by reducing the number of staff available to deal with the general public too soon.

The MPs said this had previously led to a "disastrous decline in customer service" and called for lessons to be learned to ensure the cost-saving measures do not have the same impact this time.

HMRC has previously announced it plans to be fully digitised by 2020, but the PAC said the organisation has no contingency plans in place in case the continued demand for their call centres is higher than projections indicate.

HMRC's contract with Concentrix, which aimed to identify cases of potential fraud, was also singled out for criticism, with MPs calling it a "complete failure" which had "resulted in unnecessary hardship and suffering".

The report also identified transparency as a key concern, concluding that tax relief measures still are not sufficiently clearly understood in order to allow a fair debate on their usefulness and costs.

It set out recommendations that it feels should be implemented in order to safeguard taxpayers' interests, including calling on HMRC to publish more details of the tax affairs of multinational companies, on order to increase pressure on them to "pay their fair share".

PAC chairman Meg Hillier said it was right that the public and Parliament have high expectations of HMRC "which plays a vital role in national life".

"It is therefore disconcerting that again we must raise concerns about the authority's customer service and transparency in the tax system," she said.

"The lack of a convincing fall-back plan to safeguard service as HMRC undergoes significant change remains a looming threat to its ability to collect tax from individuals simply trying to pay their fair share.

"More broadly, we continue to urge HMRC to do more to improve transparency around its work at home and within the wider tax system."

But HMRC rejected the criticism and said it had already made great strides in improving its customer service.

"We now consistently answer 90% of calls first time, in an average of less than five minutes," a spokesman said.

"We have invested heavily in customer services, recruiting more than 3,000 new staff who are also available outside normal office hours when many of our customers choose to call us.

"This is alongside a new range of popular digital channels for customers to get the information and support they need without having to pick up a phone or pen.

"Efforts to crack down on tax avoidance, evasion and fraud have also secured in £26.6 billion over the last year."