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HMRC Accentuates The Positive In Statements On Performance

22 May 2013   (0 Comments)
Posted by: Author: Amanda Banks
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Source: Amanda Banks (, London)

HM Revenue and Customs has made announcements relating to its performance, including the claim customer service standards "are at their highest levels since HMRC was formed in 2005," and that a recent court case has put "to rest the fallacy that HMRC is soft on large businesses."

However, the court case noted "maladministration" in HMRC's relationship with a bank, and the customer service boast comes as 5.5m Britons are due to receive revised tax bills due to incorrect Pay As You Go (PAYE) income tax assessments.

According to a briefing on HMRC's performance during 2012-13, call handling reached 90 percent of call attempts from October 2012 to March 2013, giving an overall performance of 75.2 percent for the year and meeting HMRC's target. Further, 85 percent of post received was cleared within 15 days, and the organization is "on track" to clear 97 percent within 40 days, which exceeds the target of 95 percent. In February, HMRC head Lin Homer was criticized by Margaret Hodge MP for "unambitious" customer service targets at a meeting of the House of Commons Public Affairs Committee. The briefing does not mention the amount of time it took for calls to be answered, which was a key concern raised by the Committee.

The briefing also explains that UK Tax Credits and Child Benefit claims and changes of circumstances were cleared on average within 15.5 days, against a target of 22 days, although for international cases this took 119.4 days against a target of 92 days. Further, PAYE cases have been brought up to date, and 96.3 percent of corporation tax, PAYE, and self-assessment debt which had arisen between April and November 2012 was cleared within 90 days.

However, around the time the briefing was published HMRC also announced that its yearly "end of year reconciliation process," involving a review of PAYE and changes in circumstance, would mean revised tax bills for 5.5m taxpayers, with 2m owing an extra GBP400 to GBP500 and 3.5m due a rebate of between GBP350 and GBP500.

Meanwhile, a case at the High Court has highlighted HMRC's dealings with the bank Goldman Sachs, with a judge expressing the view that an agreement made with the bank in 2010 "was not a glorious episode in the history of the Revenue." Responding to request for an activist group for the deal to be subject to a judicial review, Mr Justice Nicol noted that HMRC officials had not been briefed by the lawyers litigating against Goldman Sachs, and that they had erroneously believed there was a barrier to the recovery of interest on the unpaid National Insurance Contributions.

Further, the officials failed to seek the required approval from the High Risk Corporates Programme Board for an agreement worth more than GBP100m, and a lack of record-keeping had created uncertainly. Also, potential embarrassment to the Chancellor should Goldman Sachs withdraw from the Tax Code had been taken into consideration by HMRC, when it should have been irrelevant to its decision-making.

However, quoting a previous judgement, the judge noted that "maladministration and illegality are separate issues," and he dismissed the application on the grounds that HMRC's actions had not been unlawful. In response, Jim Harra, Director General for Business Tax, stated that: "The High Court's judgment confirms what HMRC has always said: that while we made errors in settling the Goldman Sachs dispute, we made the right settlement in the circumstances, and that our decision was both proper and lawful."


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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