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Accountants criticise HMRC's performance before MPs

The perils of the tax complexities at the heart of the proposed child benefit changes together with the introduction Real-time information, stabilising the PAYE system and call centre performance were at the heart of the Treasury’s latest sub-committee discussions into the administration and effectiveness of HMRC.

Held in Parliament’s Wilson Room, the committee heard from a number of key players in the accounting profession who appeared as witnesses.

It follows the high levels of dissatisfaction that have been reported by the public and tax professionals with elements of HMRC’s performance – much of it caused by staff cuts, “deficiencies in tax legislation and the legacy of the merger”.

Paul Alpin, the ICAEW’s tax faculty technical committee chairman, slammed aspects of the proposed child benefit changes set to kick in on 7 January next year that will affect anyone earning over £50,000.

‘It’s another example of a policy that is just bogged down with detail. It will generate another 500,000 self-assessment tax returns for HMRC which is not a great way of making a system more efficient.’

While supporting the move towards a greater take up of RTI, he called on the government to shelve the requirement for employers to report on or before the payment date as it would be “unworkable for many small businesses”. ‘It’s the problem at the heart of RTI, so we need to scrap it completely,’ he said.

He said IXBRL had also saddled companies with an extra compliance and cost burden which was “disproportionately larger for smaller businesses”

‘There’s still a heck of a lot to do, but the work done last year has delivered some good results. He cited improvements to the P35 employer annual return process which had resulted in 70,000 fewer employers being slapped with penalties and described the progress so far as “not perfect, but one hell of an improvement.’

Meanwhile, the PCS union’s national officer Peter Lockhart told the committee that HMRC’s high rate of attrition was a direct result of the “constant attack on employees’ terms and conditions” while the department was “not an easy place to be expected to deliver more with less money”.

Alpin praised the real “progress made in terms of getting engagement and being listened to” at the department and cited the 1,000 extra staff and £34m that HMRC chief Lynn Homer had thrown at the department’s call centre problems.

Published 25 October 2012


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