The Low Incomes Tax Reform Group (LITRG) has welcomed today’s report from the House of Commons Treasury Sub-committee which makes recommendations on HMRC’s approach to dispute resolution - including calling for HMRC to urgently review and improve the guidance it makes available to vulnerable taxpayers.
The recommendations follow from written and oral evidence given to the committee by LITRG, CIOT and others.
Victoria Todd, Head of the LITRG Team, said:
“It is right that HMRC expect all taxpayers to comply with their obligations as far as is possible, but to do that people need to be able to understand how the system works and what is required of them. LITRG is concerned that HMRC are failing to provide the necessary levels of guidance to ensure that unrepresented taxpayers can fully meet those obligations as well as understand their entitlements under the tax and benefit systems.
“In recent months, HMRC have taken steps internally to address some of these concerns and we hope that the recommendation in today’s report, that HMRC urgently review and improve the accessibility, quality and level of detail of guidance they make available to vulnerable taxpayers, will mean HMRC continue to prioritise this work.”
The sub-committee’s report also examines how HMRC treat vulnerable taxpayers involved in tax disputes and cited LITRG’s evidence to the committee which highlighted some of the issues that both taxpayers and HMRC face.
Victoria Todd said:
“As said in evidence to the committee, we have been very supportive of HMRC’s needs enhanced support service (NES). We remain concerned that the NES team is only effective if front line HMRC staff are able to identify that a person has a need for extra support. In our experience that is where things often fall down.
“HMRC’s own evidence to the committee sets out a number of improvements that have been made. Indeed, earlier this month, the Financial Secretary to the Treasury Jesse Norman, set-out a number of steps that HMRC are taking to improve things for unrepresented taxpayers, which are all very welcome.
“It is right for HMRC to try and identify cases involving unrepresented or vulnerable taxpayers who need extra support to ensure that those needs are taken into account when dealing with the case. However, it is not appropriate for HMRC to stray into areas where such taxpayers need independent and impartial advice regarding a dispute with HMRC. It is important that HMRC recognise these boundaries as they continue to expand the support that they offer and ensure that they signpost people to the tax charities or professional advisers, where appropriate, for independent advice.
“HMRC face some challenges in trying to increase the support that they offer. In cases involving particularly vulnerable taxpayers it is not always easy to identify that someone may need additional support if they are not able to express that need or are not forthcoming with information that helps establish this at an earlier stage. It is incumbent on HMRC to ensure that staff are sufficiently trained to understand the different ways in which people may present and the signs that may indicate they have a need for extra support. We remain committed to working with HMRC to help them make further improvements.”
Notes for editors
1. Among the report’s conclusions and recommendations:
Given the stress and anxiety that disputes with HMRC can cause a vulnerable taxpayer, the MPs welcome the steps taken by HMRC to improve its approach to vulnerable taxpayers and look forward to receiving an update on progress. However, it is clear that more can be done. The report recommends that HMRC provides a clearer explanation of its definition of ‘vulnerable’ when it comes to identifying this sub-set of customers.
The report recommends that HMRC report on how it has reflected on the insights of groups such as the Low Incomes Tax Reform Group, the tax charities and other advice bodies to gain a full insight into the difficulties faced by taxpayers who cannot afford to pay for advice. This should be provided to the committee in the response to this report.
The sub-committee has heard that it is too difficult for anyone involved in a dispute with HMRC and with little knowledge of the workings of the tax system to find adequate information from HMRC to help them understand the law and find out about their rights and the help that is available to them. The report recommends that HMRC urgently reviews and improves the accessibility, quality and level of detail of guidance it makes available to vulnerable taxpayers. In its response to this report it should set out a clear timetable to achieve this, says the sub-committee.
2. Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk
Out of hours contact: George Crozier, 07740 477 374)
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