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KEY POINTS
- No response yet to Red spot article.
- Open letter to David Gauke.
- Government should state acceptable time limits for HMRC to respond to tax agents.
- Write to your MP!
I am not so foolish as to think that many of you are reading this when it drops on your desk on Thursday 27 January. For those with a personal tax practice, the best I can hope for is that it was at the top of the pile of ‘things to do after 31 January’, and that you are reading it on Tuesday.
That is also the reason why I have not taken the issues raised in my November article The red spot any further before now, but the lack of any response from HMRC or the government convinces me that we need to campaign more vigorously.
The red spot
If the end of November is now lost in the mists of tax return preparation, let me remind you what it was all about. The title came from the practice in some districts of enclosing a red paper dot with letters that they sent to agents. The red dot was to be stuck on to the agent’s reply to HMRC.
This enabled the response to be identified and taken out from the mass of mail which was going to sit and moulder unanswered in a cupboard for a couple of months.
While the story of the red spots is amusing, the post delays are not. Prompted by a letter from a reader who had been told that the August post in one particular district was due to be opened at the end of November, when the Exchequer secretary, David Gauke MP, gave last November’s ICAEW Tax Faculty Hardman lecture, I asked him three questions:
- What is an acceptable time limit for HMRC to respond to, say, 90% to 95% of letters they receive?
- When did he expect them to achieve that?
- How did he expect them to do so with yet further cuts in staffing?
While, as I said in The red spot, I was not surprised that he refused to make policy on the hoof, I don’t think it is unreasonable to expect some response to at least the first of those questions by now.
However, despite forwarding the article to him, I have had no further comment. By the time you read this, I will therefore have sent this follow-up open letter to David Gauke.
Open letter
‘In my article of 25 November, The red spot, a copy of which I forwarded to you, I took up the issues raised in my questions at the Hardman lecture about the delays agents are experiencing in receiving replies to correspondence, both for routine administrative issues and in dealing with technical queries.
'I should like now to ask more formally for a response to the first of those questions, which (as amended later in the article) was “what are acceptable time limits for HMRC to satisfactorily respond to communications they receive from agents regarding administrative and technical issues respectively?”. In asking for a reply to that question, I should make it clear what it is NOT trying to cover.
‘I am not asking for a standard to which HMRC can currently be held. It is all too apparent that at present the delays are far longer than any reasonable standard would set. When the issue was discussed on our LinkedIn group for tax professionals they recounted some of their own experiences:
- HMRC routinely taking five weeks to process an SA1, to register someone for self assessment and obtain a tax return;
- delays of six weeks are common for dealing with 64-8s, the authority for an agent to act;
- ten weeks for a CWF1 to be processed, registering someone as self-employed;
- a frequent response from HMRC staff, when letters are chased, that the post backlog is 12 to 16 weeks;
- a UTR still not issued for a taxpayer as the self-assessment deadline approached, even though the initial information had been sent in September, then resent when “lost in the post”;
- technical matters which HMRC will only deal with in writing rather than by phone, where each exchange means a two or three-month delay for HMRC to reply; and
- a repayment in respect of an employee’s mileage allowances which took 13 months to obtain.
‘I am, however, asking you to tell us what you think would be a reasonable standard for responses to be received, given that the time of tax agents has to be paid for by their clients.
'A factor mentioned frequently by our respondents is the effect on their own practices, both in the time these cases take to sort out and the damage to their own reputation with their clients.
'They told us of having to write off hundreds of pounds of chargeable time per case, and of still losing clients who did not believe that the problem was with HMRC rather than the agent.’
Some suggestions
Having requested an opinion on what a reasonable response time might be, I thought it would be helpful to make some suggestions.
The letter to David Gauke therefore continues as follows.
‘While the purpose of this letter is to get your response rather than your agreement or disagreement with any views I might put forward, it might be helpful to give a starting point for discussion.
'The following, repeated from my article in November, is based on the old 5CI form which used to require two counts of post that was more than 14 days old and more than two months old respectively. I would therefore suggest that:
- 95% of administrative letters (and phone calls) should be fully dealt with within 14 days;
- all technical enquiries should have been routed to the correct person to handle them, and an acknowledgement with contact details for that individual sent within 14 days;
- of those technical enquiries, 95% should have received a substantive technical response within one month; and
- all of them should have received a substantive technical response within two months, even if that had needed input from a further technical specialist.
‘In proposing such time limits, I would not want them to be seen as a norm. It would be reasonable in any other situation to expect a good number of easier technical queries to be dealt with in a couple of weeks, for example.
'I understand why the government is wary of the law of unintended consequences when targets are set.
‘However, it seems to me to be indisputable that the government should have some idea of what a “reasonable” time for a reply to be sent should be.
'You may disagree with the suggestions made above, and indeed my purpose in asking for them is not so much to dispute what the correct figure should be, but simply to establish what level of service the government believes advisers have a right to request.
'Once that is established, we can perhaps move on to discussing how it could be achieved. I fully understand that achieving time limits you set would not be easy, but without some agreement on what a reasonable time for a reply is, there is (by definition) no hope of achieving it at all…
‘The contents of this letter are being included in an article which will appear in our 27 January issue. I will be asking our readers, once they have recovered from the 31 January tax return push, to send a copy of the article to their MP with a letter detailing their own experiences of HMRC delays, and asking for the MP’s help in obtaining a response to my request for the government to state what it considers to be acceptable time limits for correspondence.’
Write to your MP
Having sent this letter, we will keep up the pressure on this, but we will need your help. As I have said, what I would like you all to do now is to write to your MP. Tell him or her some of the worst experiences you have had recently with HMRC delays, and enclose a copy of this article – you have my permission to photocopy it for these purposes.
Send us a copy of the letter too, and we will publish a selection of them (anonymously if you say you want your name withheld).
Most importantly, ask the MP to write to David Gauke at the Treasury, requesting that he responds by stating the time limits which he thinks are reasonable – not the ones which he thinks that HMRC can currently obtain, but the ones which he thinks would provide a reasonable service to advisers.
It is very important, at this stage, to separate the process of agreeing a level of service which it is reasonable for advisers to expect if they are to do their job properly, and how those targets are going to be reached.
Third time lucky (again…)
We have run several small campaigns in between, but this is the third major campaign that I have launched as editor of Taxation. The first was No to November, which successfully fought against the proposal that all tax returns would have to be submitted by 30 November each year.
The second was Stop the Staff Cuts, opposing the repeated and drastic reductions in HMRC staff. That was unsuccessful, and I believe that has contributed significantly to the delays for agents in getting responses from HMRC. We’re going to call this one Right to a Reply.
Let’s hope that it is our return to winning form
