Have your say on HMRC's Charter
By Susan Cattell, Head of Tax Technical Policy
29 April 2020
Susan Cattell outlines HMRC’s proposals for updating its charter – which sets out the standards of behaviour taxpayers can expect from HMRC - and invites feedback from ICAS members.
What is the HMRC Charter?
Finance Act 2009 introduced a requirement for HMRC to publish a Charter which must include “standards of behavior and values to which HMRC will aspire when dealing with people in the exercise of their functions”. The legislation (in s16A of the Commissioners for Revenue and Customs Act 2005) also requires HMRC to regularly review the Charter and publish revisions, or revised versions, when it considers it appropriate to do so.
Recommendations for changes to the Charter
The House of Lords Economic Affairs Committee in its 2018 report “The Powers of HMRC: Treating Taxpayers Fairly” noted that the evidence it received suggested that HMRC was not always living up to the standards set in the Charter and that government pressure on HMRC to collect more tax with fewer staff might be pressuring staff to take a more aggressive approach and impairing their ability to be fair to taxpayers. It made several recommendations linked to the Charter, including that the Charter should be amended “to clarify HMRC’s responsibilities towards unrepresented taxpayers including that issues are clearly set out, legislation is explained and rights to review and appeals are made accessible”.
More recently Sir Amyas Morse in his Loan Charge Review recommended that the Charter should be reviewed “to set higher expectations of performance during interactions with members of the public, and to ensure that staff are trained to meet these expectations.”
HMRC began work to review the current Charter in September 2019. In developing its own proposals for an updated version, it has undertaken several actions, including:
- Reviewing existing insight, such as HMRC’s annual customer surveys;
- Researching other customer charters and customer promises in other organisations;
- Holding round table events with HMRC staff and taxpayers;
- Consulting with internal and external stakeholder forums; and
- Discussing the Charter and HMRC’s obligations with HMRC’s Customer Experience Committee (formerly the Charter Committee).
HMRC’s proposals for the Charter
HMRC has published a consultation setting out its proposed new Charter and inviting input. Based on the work carried out so far HMRC believes that the updated Charter should:
- Be short and direct with simple accessible language;
- Embody or represent HMRC’s values which are: “we are professional, we act with integrity, we show respect and we are innovative”;
- Be more focussed on HMRC’s commitments to “customers”, whilst not losing sight of “customers’” obligations to HMRC.
It is not therefore surprising that the proposed new Charter is shorter than the current one. The clear split between the taxpayers’ rights (what they can expect from HMRC) and their obligations (what HMRC expects from taxpayers) has disappeared. Instead, the new Charter is divided into two parts:
- A short section on “Working with you to get tax right” which notes that HMRC works in partnership with taxpayers to collect the tax that pays for the UK’s public services.
- A longer section “What we want our service to be all about” split into items covering:
- Making things easy
- Getting things right
- Being responsive
- Treating you fairly
- Being aware of your personal situation
- Keeping your data secure
- A word about respect
Measuring HMRC’s Performance against the Charter
CRCA 2005 also requires HMRC to make an annual report reviewing the extent to which HMRC has demonstrated the standards of behaviour and values included in the Charter. As part of the consultation HMRC is therefore seeking input on how its performance can be monitored and measured against the new version of the Charter.
ICAS would like your input
ICAS will be submitting a response to the consultation. We would like to hear views about any or all of the questions in the consultation. We would be particularly interested in comments on the following issues:
- Does the proposed new Charter adequately recognise the role of agents acting on behalf of taxpayers? It refers to HMRC ‘working with anyone you’ve asked to act for you’ but is that sufficient?
- Should the new Charter address the costs of tax compliance for taxpayers? There was a specific commitment (in 1.2 of the previous version) to keep any costs to taxpayers to a minimum but this is not included in the proposed new Charter.
- How should HMRC’s performance against the Charter be measured?
- In a separate exercise HMRC is reviewing whether it could publish more statistical data about its work to enhance transparency. Is there any data which would be useful in helping to measure HMRC’s performance against the Charter?
Please send us your feedback and comments by emailing tax@icas.com or login to the CA Connect forum, an area exclusive to members. Here you can share your thoughts on the proposed new Charter and engage in discussion about it with fellow members.