Inquiry into public confidence in HMRC’s capability to collect tax fairly and effectively

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Further to feedback on the draft terms of reference this consultation opened formally on Thursday 8th September 2016. The deadline for initial written submissions is Monday 24th October 2016, following which we will invite oral responses and conduct further research before the consultation closes on 23rd December 2016.

This is the second workstream of the All Party Parliamentary Group on Responsible Tax, looking at levels of public confidence and trust in the capability of HMRC to collect tax fairly and effectively. This includes looking at customer service experience and how HMRC fights tax avoidance and evasion.

It is recognised that ‘trust’ is a difficult term to define precisely. Here, we define trust as relating not to the honesty or integrity of HMRC and its staff but to their ability to effect certain outcomes. In particular, this means collecting tax effectively (that is, reducing the ‘tax gap’ between what is owed and what is collected) and fairly (that is, not wittingly or unwittingly applying rules in an inconsistent manner). We posit that the two particular circumstances that contribute to public trust or distrust in HMRC: the general public’s direct interaction with HMRC through their own tax affairs; and the publicity of HMRC’s success or otherwise in combatting tax evasion and avoidance.

HMRC has received sustained scrutiny about the difficulty taxpayers have in interacting with their services. Waiting times on helplines, errors in written correspondence the complexity of interacting online are consistently highlighted as areas of concern. HMRC has taken steps to improve customer service but there are still questions around the effectiveness of this investment and the progress HMRC is making in improving its service for normal taxpayers.

Meanwhile, the level of public interest in aggressive tax avoidance and evasion remains significant, with LuxLeaks and Panama Papers highlighting the scale of the challenge HMRC and other revenue bodies around the world face. HMRC received 86,000 separate leads in 2015, ranging from local concerns, to commercial avoidance to intelligence that helps HMRC take down criminal gangs.

Terms of reference

The APPG on Responsible Tax is asking participants to respond to one or more of the following terms of reference:

General:

1. What levels of trust and confidence do the public have in the capability of HMRC to collect tax in an effective and efficient way that:

a) preserves and encourages fairness and equity?

b) is an efficient use of resources?

c) provides a first rate customer service?

2. What can be done to improve the levels of public confidence in HMRC’s capability?

 

Customer service:

3. To what extent does HMRC consider the customer’s experience in the allocation of its resources and the services it provides?

4. Is the HMRC strategy for improving the customer experience fit for purpose?

 

Dealing with tax avoidance and evasion:

5. How effective is HMRC in dealing with

a) aggressive tax avoidance?

b) tax evasion?

6. What legislative, resourcing or other measures would help to narrow the tax gap?

7. Does HMRC make appropriate use of all the powers and opportunities in its toolkit?

 

Staffing and resources:

8. Are HMRC’s resources adequate?

9. Is HMRC able to recruit and retain people with appropriate skills, qualifications and experience?

10. Within constrained budgets, what could HMRC do to achieve better and more sustainable services?

 

We are grateful to those who provided feedback on our draft terms of reference. You can read the draft terms here. 

 

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