Complaining about HMRC – Headway or Headache?

According to the HMRC annual report and accounts of 2017-18, 69% of individuals, small businesses and agents rated their overall experience with HMRC as positive. This begs the question as to why HMRC received 77,410 new complaints? Of these complaints, HMRC claim that 99% are resolved internally.  

HMRC require complaints to be made within a year of the incident. We are aware of clients who have not had a substantive response from HMRC for over 4 years. Would this be considered as too much time passed for an individual to make a complaint? Or would HMRC deem it to be the individual’s responsibility to chase HMRC? The tax payer charter states as a tax payer HMRC should handle information provided quickly, efficiently ensuring costs are kept at a minimum. Would HMRC allow 4 years for an individual to respond to an enquiry letter? HMRC give strict deadlines to individuals, with subsequent penalties if the deadline is passed.

HMRC more commonly than not, have adapted an incorrect view of their own guidance. A HMRC case worker can have a completely opposing view to their colleague, providing a poor level of service to their customers. For example, in a case worked recently, a case worker issued a schedule 36 notice to our client in which we responded, whilst a colleague issued the same schedule 36 notice within a few days of the first letter, to another listed agent. A full comprehensive response was submitted by us, which should have been logged correctly on HMRCs system. Instead the client was issued penalties for failure of the other agent to respond, resulting in immediate penalties issued by HMRC. Upon trying to resolve the penalty situation, it was clear that HMRCs stance was a respond needed to be submitted from both agents, rather than the case workers communicating between themselves to collate the information provided. As a tax payer, this would result in double costs to provide the exact same information and also a penalty charge. Simple changes in HMRCs processes and systems would result in less complaints being made. HMRC use their current system to defend their position rather than taking a wider view.

In a recent treasure select committee meeting Ruth Stanier provided evidence surrounding the level of service provided by HMRC and appeared to suggest that upholding just over half of complaints is a positive. This leaves the remainder unsatisfied. It was stated by a member of the treasury select committee that if HMRC was a private business, numbers of complaints that high would probably put them out of business.

There are a series of steps in which an individual can make a complaint against HMRC. Each step provides a decision. These are upheld, partially upheld and not upheld. At each stage, the individual has the right to appeal if they are unhappy with the outcome.

HMRC clearly do not find ways to resolve or partially uphold complaints – see table. With a timeframe of just 6 months for an individual to contact an independent Adjudicator post the tier 2 decision, individuals will be in a situation where a government body has failed to find a resolution and their only option would be to progress the case to the Adjudicator. The Adjudicator is to remain impartial, yet in the year 2017 over half the cases reviewed were not upheld. – see table

The last stage of the complaint’s procedure is a review from the Parliamentary Ombudsman, who provides finality of the case. A complaint can only be reviewed by the Parliamentary Ombudsman if an individual has requested the signature of an MP, usually from their own constituency. This creates what is known as the MP Buffer, which can result in the complaint never reaching the Ombudsman at all. For the year 2017-18 the Parliamentary Ombudsman only upheld 6% of complaint cases. In 2011-12, 83% of cases were upheld. The report of 2013-14 stated that the Ombudsman now only investigate a complaint if there is an indication things have gone wrong that haven’t been put right, whilst in the past they would only investigate if they were likely to uphold the complaint. This shows how a shift in their methodology has impacted the number on cases being upheld since 2012-13.

In summary, out of the 77,410 individual complaints, only 33,161 were upheld. Records of the nature of the complaints are not available to the public, therefore there may be underlying factors mitigating the chances of a complaint being successful or not. The evidence shows that should a complaint not be upheld at tier 1 or tier 2, the chances of being upheld at the Adjudicator stage or the Parliamentary Ombudsman stage. This may be due to a number of factors which are not public knowledge. Therefore, if a complaint is not upheld at the Adjudicator stage there is a very slim chance it would be upheld at the Ombudsman stage.

To can make a complaint to HMRC online, phone or via post (Tier 1). Contact details can be found on  www.gov.uk/complain-about-hmrc. You will need your National Insurance number and Unique Taxpayer Reference number. You will need to provide your full name, address, phone number and details of what happened and when. Lastly you will need to explain how you would like your complaint to be resolved. HMRC will respond and provide a response detailing whether they have upheld your complaint. If you disagree with the outcome of the complaint, you can ask HMRC to look at it a second time (Tier 2). Following the outcome of the second review, you can ask for the independent adjudicator to review the case by writing to them with details of your complaint and provide a copy of the final decision letter from HMRC. The address can be found on their website www.adjudicators.gov.uk/contact. Lastly, if you are still unhappy with the outcome of the decision you can request the Parliamentary Ombudsman to review the case, following approval from your MP. The result of this decision will be final. You will need to complete the complaint form which can be found on their website www.ombudsman.org.uk/making-complaint.

2017-18 Complaints (77,410)

  Cases upheld Percentage
HMRC Tier 1 28,099 37%
HMRC Tier 2 4,776 17%
Adjudicator 107 39%
Ombudsman 179 6%

*Please note percentages have been rounded for illustration purposes d0 List