Digital transformation is not necessarily a quick and easy way to deal with HMRC explains Murray Beith Murray Tax Manager, David Windram in The Scotsman today. Read the full article below, republished by kind permission of The Scotsman:

It’s often said rules are made to be broken, but what about charters? Much-loved by the business community, a charter outlines (amongst other things) an organisation’s mission and goals.

HMRC has a charter that it claims sits at the heart of what it does, setting out the standards of service and behaviours that customers should always expect. Rule- breakers usually face consequences, but that’s not necessarily the case for charter failures.

HMRC’s own Customer Experience Committee, in its most recent report, talks about positive steps to becoming more customer-focused and trumpets that it is more alert to customers’ needs and issues. However, the external Charter Stakeholder Group has a different slant on that year’s achievements, offering a sobering assessment of HMRC’s performance against eight charter standards.

Only three of the standards get pass marks with a further three scoring particularly poorly. Being responsive scores a miserable 2.3 out of 10, making things easy is not much better at 2.7 out of 10 and getting things right, one would have thought an essential requirement for taxpayers, 3.4 out of 10.

But is this a fair reflection for those dealing with HMRC on a regular basis? Unfortunately, I suspect so, although there needs to be some recognition of the pressures HMRC staff face. Such institutions are never going to be popular given the nature of what they do, but HMRC’s intentions are at least pointing in the right direction in theory, if not always in practice. Their scores haven’t turned them into a modern-day Sheriff of Nottingham, but they have in some way been hoisted by their own petard, as Shakespeare would put it, by their own charter.

The key question is what can be done to improve matters and many within the organisation point to digital transformation as the panacea for all its ills. Making Tax Digital, a system of quarterly returns with a final declaration, was supposed to be introduced from this month for those earning more than £10,000 from self-employment or property letting. However, that plan was shelved by the government in December 2022 to give businesses and HMRC more time to prepare.

Relations with taxpayers and agents alike weren’t helped when HMRC announced earlier this year the closure of its self-assessment helpline for several months, only to reverse that decision 24 hours later after public and professional outcry.

The importance of occasionally being able to speak to someone cannot be overstated. Our own recent experiences provide ample evidence to support that with some clients turning to us for help when their returns to HMRC have been questioned. In one case, a client was being chased by a debt recovery firm despite the fact that HMRC had agreed the calculation was incorrect. Automated systems and processes devoid of human scrutiny can leave many feeling extremely vulnerable and put a strain on an agent’s relationship with a client when all parties understood an issue had been resolved.

In too many cases, stressed taxpayers, particularly the elderly, feel pressurised to settle and do so out of fear to put an end to the matter. The vast majority are happy to pay tax to fund public services, but they want to pay the correct amount. Disputes that drag on beyond acceptable turnaround times can have a devastating impact on those under the HMRC cosh. Trusted professional advice is vital to navigate the tax maze and provide assurance that your affairs are in order.

Murray Beith Murray Personal Tax Advice, Edinburgh

Head of Muray Beith Murray Tax Group, David Windram is an expert in tax compliance and tax planning issues for individuals, trusts, executries and partnerships. If this article has raised any questions or you would like to discuss your affairs with our specialist tax advisors then please complete our contact form or call 0131 225 1200.

Murray Beith Murray is a private client practice, made up of specialist lawyers from a variety of legal disciplines, including experts in asset protection and estate planning. The firm was established in 1849, as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day as does our commitment to be here when you need us.