Citizens Advice welcomes the opportunity to respond to HMRC’s consultation on the proposed Taxpayer’s Charter.
The Citizens Advice Bureaux (CAB) network is the largest independent network of free advice centres in Europe, providing advice from over 3,200 outlets throughout Wales, England and Northern Ireland. We provide advice from a range of outlets, including GPs’ surgeries, hospitals, community centres, county courts and magistrates courts, and offer mobile services both in rural areas and to serve particular dispersed groups.
The Citizens Advice service provides free, independent, confidential and impartial advice to everyone, on their rights and responsibilities. It values diversity, promotes equality and challenges discrimination. The service aims:
- to provide the advice people need for the problems they face; and
- to improve the policies and practices that affect people’s lives.
Evidence from the Citizens Advice service shows that our clients engage with HMRC in a number of different areas. The vast majority of enquiries concern tax credits, but we also give advice on child benefit, national insurance and tax issues. In 2007-2008 the CAB service in England and Wales dealt with 5.5 million enquiries in total. Over 600,000 clients were given advice on 1.5 million benefit and tax credit issues, which constituted 27% of the total number of issues handled by the service in the year. Over 160,000 of these were about working tax credit and child tax credit; 38,017 concerned child benefit, and 10,400 were about national insurance. Bureaux advisers also dealt with almost 53,000 tax issues, half of which were about income tax.
DWP research1 shows that one of the most important requirements for customers when dealing with service providers is to be treated with respect, and we still hear from clients who feel that the tax office staff have been dismissive or unhelpful. The most predominant problems for our customers in their relations with HMRC, however, are administrative difficulties, such as
- Failure to reach helpline services by telephone
- Receiving inaccurate or incomplete information and advice
- Lack of explanations, especially for tax credit overpayments
- Delays in processing times
- Lack of efficient operations across departments
Citizens Advice Case Studies
We offer a selection of case studies below, which represent many similar cases and illustrate these problems. They show a clear need for HMRC to address the way they deliver their service, and therefore support the proposal to devise a charter:
Administrative error and lack of telephone access:
A London CAB saw a 38-year-old disabled man studying part-time, while his wife studied full time, and both were receiving student grants and loans. They had two young children and used to get child tax credits until the payments suddenly stopped. The tax credits statement said that the client had no children, which was clearly an administrative mistake, but HMRC would seek to recover an overpayment. The client called HMRC and sent copies of the children’s passport, to no avail. It was impossible to get through to HMRC on our evening session as they did not answer the phone, though the lines should be open until 8pm. Due to the error by HMRC, the family was struggling financially and will possibly have to fight the overpayment request.
Unsympathetic attitude:
A CAB in Cornwall saw a single parent of three children who left a relationship in June 2007 following domestic violence in which police were involved. She was placed in emergency accommodation by the local authority prior to being re-housed at a secret address. Her ex-partner had refused to sign an annual declaration of earnings form for 2005/06, to finalise a tax credits award; HMRC were chasing this client for a tax credit overpayment of £2298.79 and threatening enforcement. The client had challenged the recovery demand, explaining the situation, but this was dismissed. HMRC already had the information on her ex-partner's earnings as he was self-employed and would have sent in self assessment returns, so this is a technicality. The client was particularly vulnerable after her experience of domestic violence, and was worried about paying back such a huge amount of money whilst on a limited income and dependent on benefits.
Administrative error and threatening tone:
A Surrey CAB saw a retired 69-year old man, who had submitted a tax return for 2004/05 and was told that he owed £235.89, which he paid in January 2006. He received two letters from the Inland Revenue in August 2005 informing him that in the future he would not have to complete a tax return unless his circumstances changed. In March 2003 he phoned HMRC just to confirm the situation and he was told that he should have submitted tax returns for the previous tax years. He therefore completed relevant returns, and received an assessment for 05/06 and 06/07 and a payment on account for 07/08. The total he has to pay is £1805.56 and he is being charged interest because of late payment. The client had noticed that the national insurance number on earlier correspondence was incorrect, and officials had also addressed him by the wrong name, so it appeared there had been a mix-up of files. The client went to HMRC office and was told he would have to pay the full £1805.56 including the interest, but that he should then appeal against the interest demand. He phoned the HMRC Time to Pay number to see if he could pay by instalments, and was asked if he had any savings. He explained that he had a small amount of utilities shares, and was told he must sell these and pay the tax by the end of the month or they would 'be sending people round to knock on your door'.
The client took out a new credit card in order to pay the amount in full, but was concerned about the breach of confidentiality at HMRC owing to the mix-up of the files, and was very upset by the tone and words used by the Time to Pay office as he was very worried about bailiffs coming to his house, especially as he had acted in good faith by not completing tax returns.
Negative attitude and incorrect information:
A client of a Suffolk CAB was a 31-year-old single mother with dependent children (including a new baby), living between her separated parents’ homes and friends. She had left her partner some months before, and had sold the house they shared. The mortgage was in her name, she had all the proceeds of the house (£15,000) and they were still discussing how the money should be shared, but she had debts of about £34,000. She had been on maternity leave since her son was born early in November 2007, but did not believe she would return to work and would probably apply for income support. She had contacted HMRC to apply for tax credits, but the adviser was very negative about her entitlement, saying he didn't think she would qualify, when she would definitely have been entitled to at least £20 per week. She found the tax credits application form daunting, but CAB stressed the need to apply in order to ensure some further income, whereas the mis-direction by the HMRC means she could have missed out on money to which she was due.
Delay in processing and lack of explanation:
A 56-year old client of a Berkshire CAB had been asked to repay significant overpayments of tax credits by the Tax Credit Office. The client was vulnerable, had learning disabilities and was partially sighted. The CAB wrote to HMRC asking for full clarification of the amounts owing and how they had been calculated. We sent our letter on 3 May 2007 and finally received a reply from HMRC Tax Credit Office dated 18 July 2008 - more than one year later! They summarised the tax credit overpayments for several tax years as follows: 200304 £4333.74 200505 £890.61, but gave no explanation, nor apology for why it had taken 14 months to reply. They also included a form ‘TC846’, but gave no indication of what it was for. The client thought he owed £312, but actually owed £3725.73. He had previously agreed to pay the £30 per month by direct debit, without fully understanding how much he owed or why. It is quite possible that our bureau would have negotiated a reduced payment plan on his behalf, with less financial stress, had the Tax Office given us an earlier reply.
Inadequate advice from helpline staff:
A Wiltshire CAB saw a client from Poland, working as a live-in carer, employed by a company in Suffolk, but working in the Trowbridge area. She is now a PAYE employee, but had previously registered as self employed from 12 October 2007 to 12 January 2008. She was told by an English colleague that she needed to complete a self assessment tax return for the period that she was self employed (2007/8) and could be penalised (£1,000) if it were not returned by the correct date. Although the client's English was very good, she struggled with telephone calls and bureaucracy.
The CAB adviser spoke to the Jobcentre who advised that the client should re-register as self employed in order to be sent a self assessment tax return form. The CAB adviser then spoke to six different helpline advisers, all giving conflicting information, and finally found that the original department should have been able to send the right form straight to the client.
Lack of service for non-English speakers:
A Lithuanian woman and her husband visited a Yorkshire CAB. They had applied for child tax credit (CTC) in February 2007 and had not received a decision by July 2008. The clients were Russian speakers and had difficulty with English, so were unable to satisfy HMRC's security requirements. This prevented the CAB adviser being able to talk to HMRC about the case, and HMRC would not agree to participate in a phone conversation using a Russian translator provided by CAB.
Lack of co-operation across departments:
A CAB in London saw an Asian man whose wife has a spouse visa with no recourse to public funds. They have four children under the age of three – including baby twins – but for two years have been unable to claim child tax credit because his wife has no national insurance number (NINO). The client said he was told to stop claiming as a single person and to claim as a couple, but all his attempts were rejected and closed because his wife had no NINO. The client stated that he had made several efforts to get a NINO for his wife from the jobcentre but they had refused because she was not looking for work. The family were living on his income-based jobseekers allowance and child benefit.
While administration has improved since the introduction of tax credits in 2003, Citizens Advice Bureaux still see numerous examples of clients who have not been well served by HMRC staff. This probably reflects the fact that clients often come to bureaux for help after they have tried to resolve problems for themselves, or when the issues are particularly complex. It is still not acceptable for a government service to fail these customers, and we welcome the proposal to design and implement an HMRC Charter.
Any customer charter only has value, however, if it creates an accountable relationship between customers and providers, and we therefore expect the resulting document to exert real influence on improving the service to customers.
Chapter 1
Qn 1.13 What options are there for enacting the Charter to ensure it is an effective and enduring document?
Citizens Advice believes that there should be a statutory foundation for the charter, in order to give it the power of accountability that it needs. We accept the principle that the language and provisions of the charter should be set out as a simple statement of basic rights, but do not see that this excludes a statutory duty on the department to provide a charter and to abide by its provisions.
To be effective, the charter must combine realistic provision, with challenging aims. If it makes promises that can’t be delivered, it will reinforce the current mis-trust of the department; but if it does not offer significant and challenging improvements, there is no point in creating it.
All citizens have basic rights and all must comply with the law. Systems are largely designed for an average majority of the population, but people who fall outside the expected norms should be supported through difficulties rather than penalised because of their circumstances. At every stage of its design, the charter should therefore be tested against the needs of the most vulnerable client groups to ensure its fitness for purpose. These might include, for example, those on benefits or low incomes, or who live variable and unpredictable lifestyles; blind or partially sighted people who have difficulty with form-filling; or those with limited hearing who cannot rely on the telephone; in a multi-cultural society, many HMRC clients have cultural expectations which must be acknowledged and accommodated, and many do not use English as a first language.
To ensure it has enduring relevance, the charter should be reviewed at regular intervals. An annual review would be too bureaucratic, but a review period of three to five years should be appropriate, with provision for intermediate reviews if there are significant legislative changes in the interim. The review process should include awareness of approaching demographic and legislative changes which would impact on HMRC’s business – for example, CAB evidence suggests that HMRC has not prepared sufficiently well for non-English speaking clients, although this need should have been predicted.
Chapter 2
Qns 2.20/2.21 Which roles should it play?
Citizens Advice believes that the charter should fulfil a high-level strategic role, which would include:
- statements of organisational values – which should be commonly agreed with other government departments
- headline responsibilities of HMRC to customers
- commitments to stakeholder relationships, especially third party engagement on behalf of clients, and consultation to ensure that policy design meets customer needs
- commitment to publishing a clear set of service standards, including an accessible and effective complaints procedure, and transparent performance data
If the document is to be kept simple and accessible, it may not be appropriate to include detailed and specific service standards. These standards would, however, make up an essential part of the charter’s value. It could therefore refer to a linked document which would give detailed expectations of service standards, such as, for example, response times, repayment terms, translation services, complaints procedures.
Qns 2.22 How would we use the charter? 2.23 what will make it useful in our relationship with HMRC? 2.24 How could it be useful in trust & perception of HMRC?
Citizens Advice advisers would use the charter to hold HMRC to account in delivering services to customers. We would encourage our staff and clients to understand the implications of the charter and the proposed linked document, and to be assertive if they felt the stated service standards were not being fulfilled.
It would be useful as a guide to realistic expectations of HMRC’s service, both for our advisers and our clients. We would especially value its commitment to third party engagement on behalf of clients.
In the short term, the charter will be critical in re-building – or destroying – faith in HMRC and its commitment to providing good customer-centred service across its client-base. We do not underestimate the scale of this task, and we recognise the journey that HMRC is taking, in terms of the changing demographic of its customers, and the challenges presented to it. It is vital, however, that the charter contains realistic aims, and that the department is seen to apply resources to achieve those aims – for example, a reassessment of recruiting criteria might be required, and comprehensive staff training will be essential. To a certain extent, attitudes are inherent to individuals, but simple techniques – such as active listening skills – can and should be taught, and would influence the development of a more client-centred organisational culture.
Chapter 3
Qns 3.9 Should it be a single document? 3.11 How should it integrate the specific needs of diverse groups?
We agree that the charter should be presented as a single document. This supports the idea that the charter itself should cover high-level issues (as listed above), and that more detailed information could be given in linked or associated documents.
So, for example, the service standards document could incorporate different services relevant to the diverse client groups. The level of detailed information will depend on a number of factors, but it might present the opportunity to align HMRC’s practices across its business where appropriate – telephone response times could be universal, for example, whereas time taken to resolve cases is likely to differ according to the sector of business and the nature of the case; expected responses could be specified for routine procedures, whereas provision for less predictable matters could be less specific, but would still be bound by the overall values of the organisation.
Qns 3.12 What aspects could be developed across government departments? 3.13 What would be an appropriate title?
Organisational values should be common across departments – such as respect for all customers; confidentiality; provision of accurate and professional information; principles of appeals and redress.
Certain service standards could also be aligned across departments – such as telephone response times; principles of correspondence-handling; commitment to an accessible and effective complaints procedure.
Citizens Advice supports the view that this document is to be owned and accounted for within HMRC and should therefore be titled HMRC’s Charter.
Chapter 4
Qns 4.7 Should it cover both rights and responsibilities? 4.9 Should they be mutually dependent?
HMRC cannot hold every one of its customers to account, except by virtue of their obligations in law. The department can, in contrast, oblige all its staff to sign up to the provisions of its charter. The charter can only be formally accountable, therefore, in terms of what HMRC will provide to its customers.
It is clear, however, that reciprocity between providers and customers is a healthy and appropriate aspiration. We therefore support the idea that the charter should articulate certain aspects of customer behaviour which would promote reciprocity. We approve the suggested style of language that starts ‘Customers can help HMRC by……..’
This does not resolve the question of what HMRC can do if customers do not respond appropriately. Current guidelines reflect HMRC’s discretion in law to conduct their business, and therefore include certain actions expected of clients. We would expect the charter to include - or refer to - clear codes of practice on how HMRC will apply that discretion in the various areas of their business.
Qn 4.11 How can it be used to make customers aware of rights to appeal and redress?
In general terms, the charter must be widely publicised in all media and routinely available through as many outlets as possible: leaflets should be distributed with correspondence; offices should advertise it and make copies readily available; online sites should promote it. This promotion should be maintained as routine procedure after the initial introduction of the charter, since HMRC will constantly engage with new clients.
Specifically, information on rights of appeal must be clearly presented within the charter document, and the process of appeal should be easy to understand, and straightforward to enact.
While HMRC’s charter team has used other charters for reference, we also recommend the Banking Code as an effective document, and especially refer the team to sections 2 (Fairness commitment), 14 (Financial difficulties – how we can help), 15 (Complaints) and 17 (Getting help).
Conclusion
Citizens Advice wholeheartedly supports HMRC’s intention to produce a charter. We agree that it offers a valuable opportunity to re-build trust in the organisation and to improve service for customers, but stress that if it is not well-conceived and appropriately resourced, it could have the opposite effect.
1. DWP Customer Insight study July 2008
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