Public Accounts Committee Savage HMRC

They accuse HMRC of trying to rewrite Magna Carta

The Parliamentary watchdog with teeth, the Public Accounts Committee, and its chair the chief bulldog, Margaret Hodge has been savaging senior management at HMRC once again.

This week they accused HMRC directors of being complacent, smug and having the gall to propose powers that go against the principle of the Magna Carta.

The criticisms were made by the treasury Committee when they questioned HMRC leaders including Lin Homer, chief executive and Ruth Owen, director general of tax, on Wednesday 16th July.

During the session, which lasted for more than three hours, HMRC faced some tough questioning, particularly about the quality of its phone service.

Complacent and Smug

Labour MP, George Mudie, said Homer was being “complacent and smug” about HMRC not answering over 20% of calls to its call centres. He said: “Over one in five calls unanswered… that’s old people and worried people who are trying to get through. And every year you dismiss it. When the hell are you going to get to the 93% industry standard? And if you don’t get to this target, when are you going to put some resignations on the table?”

Lin Homer denied that HMRC was complacent about not answering calls and claimed it was improving its phone service. This is Ms Homer in her bovine excrement mode and I, together with most accountants, are quite simply fed up with the poor levels of service and the time it takes to answer a call, let alone deal with it promptly and correctly; and we have a dedicated accountants telephone number to call so God help the general public.

The PAC then turned its attention to their increasing concerns over HMRC’s proposal to allow it to take money allegedly owed to HMRC, directly from individual’s bank accounts.

John Thurso, a Liberal Democrat MP, said the proposal to take tax debts from the bank accounts of an estimated 17,000 to 20,000 people went against the principle of the Magna Carta, an iconic document signed in 1215, which aimed to protect citizens’ rights from the king.

Homer defended HMRC’s proposal, arguing that it was a fair and efficient way to collect tax owed. “There are around 18,000 people who don’t dispute the fact that tax is due, they just don’t pay and we will have written to them and engaged with them and they just fold their arms and wait for us to take other action,” Homer said.

She claimed that the cost in time and money of going to court will often outweigh or seriously diminish the tax collected and she attempted to reinforce her position by stating that Tax authorities in other countries including the US, Spain and France have similar powers for collecting debts from bank accounts to those proposed by HMRC.

MP John Thurso commented back, “Ms Homer, that may well be true, but it doesn’t make it moral or right”. He went on to ask why isn’t the individual (late paying) taxpayer paying the court costs? “I always thought this was a risk of paying late, plus paying interest, bailiff’s costs and the like. We all want to see that tax due is actually collected, but helping yourself to someone’s bank account is not advisable unless there are some very stringent rules and guidelines (eg. those imposed by the courts) … and they are adhered to and enforced”. Hear, Hear I say.

Then the MPs quizzed the two senior managers about their concerns that increasingly low morale at HMRC was directly affecting workers’ performance and recruitment.

Not alot of Love for HMRC

Finally, the MP’s got an admission from Homer when she admitted that HMRC worker morale was indeed at low ebb; but then attempted to defend this sorry state of affairs by claiming that its workers’ performance within Whitehall was “second to none”. This beggars the question, just how bad is it in other government departments?

Homer continued, “One problem has been that there has not been a lot of love for the overall organism of HMRC when we were created in 2005 by the merger between Inland Revenue and Customs & Excise”. She then left the committee still self-confident and with a smug git grin plastered across her face.

However, the MPs have summoned Ms Homer and her senior managers back for another grilling at the PAC next week.

David Jones Shrewsbury Accountant says;

“I personally share the concerns of Margaret Hodge and the PAC regarding raiding people’s bank accounts and I strongly believe it must be resisted as it will be almost certainly be abused just as it has it other countries, such as Spain.

I act for a number of ex-pats who live in Spain and I recently had the experience of the Spanish tax man dipping into the bank account of a client and a friend of mine Peter. They took the money without consultation or warning of any kind after they claimed that the person failed to respond to previous demands – demands that they’d sent to an address that he’d had no connection with for over 5 years regarding a business he’d retired from 7 years earlier.

It was eventually resolved, but only after nine months and after they’d grabbed the cash they thought they were entitled to. My friend was put to major inconvenience, significant costs and an enormous amount of stress.

HMRC’s track record to date doesn’t inspire confidence that they won’t act in a similar high-handed fashion, nor does my experience with them inspire me to believe that they could be trusted to behave in anything but a bullying and intimidatory manner if they are gifted a similar right.

If you feel anywhere near as strongly as I do, I would urge you to write to your MP and tell him or her that you share the concerns of the PAC, I have”

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