February 27, 2011 8:12 pm

HMRC sees big rise in complaints upheld

Complaints upheld against Revenue & Customs have more than quadrupled during the past two years, according to figures obtained by accountants UHY Hacker Young.

The Adjudicator’s Office, the body responsible for dealing with complaints against the Revenue, upheld 446 cases last year, compared with 229 in 2009 and 108 in 2008.

Roy Maugham, tax partner at UHY Hacker Young, said the surge was a result of “deteriorating levels of service at the Revenue” over the past few years. “The level of service is a huge concern,” he said. “Even getting a response to a simple letter of inquiry can now take months.”

There has been a succession of high-profile administrative problems at the Revenue in recent months, such as incorrect pay-as-you-earn codes being issued to taxpayers and lengthening delays for value added tax registrations, and rebates for overpaid tax.

PAYE coding errors meant the Revenue collected £238m extra tax in 2009-10, up from £96m in the tax year for 2008-09. Incorrect tax codes also led to under-collected tax of £132m from other taxpayers in 2009-10.

Phil Berwick, director of tax investigations at law firm McGrigors, believed the complaints figures represented only “the tip of the iceberg”.

“There are many more people who feel aggrieved but who don’t want to take matters up with the Revenue,” he said.

Experts have also expressed concern that a further reduction in Revenue staffing levels – 10,000 job cuts were announced in the comprehensive spending review in October – could mean that service deteriorates further.

“There have been significant cuts at HMRC over the last few years,” said Mr Berwick. “And it’s not just a numbers problem – the people they are losing are also the most-experienced people. This is a recipe for disaster.”

But Patrick O’Brien, a spokesman for the Revenue, said that it served millions of taxpayers every year and only “a tiny fraction of a per cent of those customers find it necessary to go to the Adjudicator”.

He added: “We successfully collected £436bn in revenues last year, dealing with 60m phone calls and 30m items of post. We take all complaints very seriously and apologise to those customers to whom we have not provided the standard of service to which they are entitled.”

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