Anger as taxman cuts mail to agents

Tax professionals have reacted angrily to HMRC’s latest measure to reduce spending, calling it ‘short-sighted’ and ‘suicidal’.

As part of a Government-wide cost-cutting drive, the department has announced it is to stop issuing copies to tax agents of a selection of paperwork sent to clients.

The letters include the P2 PAYE coding notice and the P800 tax calculation form. Discontinuation of these two alone will save in excess of £1.25 million, the Revenue has estimated.

The Chartered Institute of Taxation (CIOT) expressed concerned that the reductions in mail will result in far more work for the taxman, taxpayers and their advisers, and will potentially lead to additional costs in excess of the amounts saved.

‘This is a seriously short-sighted move,’ said the CIOT’s deputy president, Anthony Thomas.

‘Everybody recognises there is pressure on all government departments to find savings wherever they can, but by keeping tax agents less well-informed about their clients’ tax obligations, HMRC… have not estimated the cost of dealing with an increased number of enquiries from agents, let alone that of dealing with the higher number of erroneous tax returns that is likely to result.’

‘It is particularly disappointing that this change is being sprung on taxpayers and their agents with more or less immediate effect and without consultation,’ added Mr Thomas.

‘We are calling on HMRC to reverse this short-sighted decision, or at least halt it for proper consultation.’

The Revenue apologised for making cuts that might be unwelcome, and claimed it had looked for savings ‘in those areas where there will be minimal impact on our customers [sic]’. 

Chartered accountant Susan Gompels, one of the founders of the Working Together initiative, questioned the department’s cost-cutting move.

‘How can this make sense at a time when HMRC needs all the help it can get,’ she asked.

‘Agents offer a vital link with taxpayers to help them to meet their obligations, thus helping an increasingly pressured department to ensure returns to the Treasury?

‘I cannot but feel that it is suicidal for HMRC to be cutting out and deliberately not informing this massive army of “wholesalers” whose actions help tax systems work.’

In a letter to Taxation, Ms Gompels warned that the taxman’s decision to axe copies of letters and notices was tantamount to ‘doing away with systems designed precisely to tackle and prevent operational problems’.

‘Relatively paltry savings… will come back to haunt the department with costs magnified beyond measure,’ she said.

Further spending reductions are expected at HMRC, which by next year will have axed around 25,000 staff positions since the 2005 merger of the Inland Revenue and HM Customs & Excise.

‘Hard decisions and choices will inevitably have to be made and we will continue to seek opportunities to improve our current forms, reduce the number we send out… [and] consider whether there are other forms that could be replaced or even removed entirely,’ said the department.
 

Issue: 4272 / Categories: News , Anthony Thomas , Chartered Institute of Taxation , CIOT , job cuts , P2 , P800 , Susan Gompels , Working Together , Admin