HMRC criticised for being ‘too aggressive’ to taxpayers

HM Revenue and Customs (HMRC) level of aggression towards taxpayers has shocked MPs.

Evidence revealed by the Finance Bill Sub-Committee found that there have been a number of complaints about aggressive abuse of powers and failure to give adequate information to taxpayers or explain their rights.

Ruth Stanier, Director General at HMRC’s customer strategy and tax design, defended the Revenue’s approach, ensuring the committee that “we want to help taxpayers get tax right and we want to apply the law fairly”.

She added that HMRC’s objective is to settle disputes according to its published litigation and settlement strategy.

Last year, HMRC received 77,000 complaints, with 54 per cent upheld in-full or in-part.

Only six per cent of the complaints reached the second tier of the process, and less than 1,000 went all the way to the adjudicator. Representing a 15 per cent decrease on the previous year (when 39 per cent were upheld).

The House of Lords Sub-Committee also integrated HMRC about its Making Tax Digital (MTD) for VAT plan, which is due to launch next April.

Director of MTD for business, Theresa Middleton, admitted that the plan has met some defiance.

“I think it is fair to say there has been a mixed enthusiasm among accountants who represent small businesses for encouraging their clients who use spreadsheets to move to software,” she said.

MPs also criticised the Revenue’s accelerated payment notices (APNs) regime.

Lord Forsyth of Drumlean said HMRC is “risking driving people into bankruptcy” under the regime, as it can demand tax it believes is owed without having to first establish there is a tax liability before an independent tax tribunal or court.

At present, taxpayers only have 90 days to pay the amount demanded in their APN with no right of appeal.

An HMRC spokesperson said, “All of HMRC’s powers are given to us by Parliament and are subject to appropriate checks and balances. We use the powers we have in the interests of the vast majority of individuals and businesses that play by the rules”.