ICAS' work to improve HMRC service levels and systems
By Susan Cattell, Head of Tax Technical Policy
16 December 2022
Susan Cattell outlines what ICAS has been doing in 2022 to raise Members’ issues with HMRC – and improve HMRC service levels and systems.
ICAS engagement with HMRC
An important part of the ICAS tax team’s work is engaging with HMRC. We regularly attend meetings with HMRC at which service levels, delays and other issues are discussed. We raise problems being encountered by Members. We also respond to many tax calls for evidence and consultations - we welcome Members’ input in developing our responses.
2022 has been a busy year. Members have reported ongoing problems with HMRC services, with service levels not returning to pre-pandemic levels. There have continued to be issues with HMRC systems, including the CGT property reporting service and more recently the new VAT Registration Service (VRS).
Some key areas of work have included:
Penalty waiver for self assessment filing
At the end of 2021, ICAS reported feedback from ICAS tax committee members to HMRC, to inform discussions about work pressures and whether relaxations or penalty deferrals for self assessment tax return filing should be considered. On 6 January 2022 HMRC announced that it would not charge late filing penalties for those filing SA returns online by 28 February 2022, or late payment penalties for those paying the tax due in full or setting up a payment plan by 1 April 2022. ICAS welcomed the earlier announcement of the easement, compared to the previous year.
Input to the Charter annual report
ICAS is a member of the Charter Stakeholder Group (CSG). The group is made up of representatives of the tax community, including ICAS, ICAEW and the CIOT. It holds regular meetings with HMRC to discuss how the Charter is being reflected in taxpayer and agent experience of dealing with HMRC. It also gives formal input about how HMRC is performing against the standards in the Charter, for inclusion in the annual report that HMRC is required to publish.
During Spring 2022, the tax team gathered feedback from Members on HMRC’s performance – this was used, along with input from other CSG members, to compile the CSG contribution to the 2022 annual report published in July. CSG highlighted that customer service levels remained the single greatest concern, alongside the lack of consequences for HMRC when it fails to meet the Charter standards.
Joint letter to HMRC
ICAS, and other professional bodies, continued to receive reports from Members about poor HMRC service levels. Whilst we had seen indications of improvements in reducing some backlogs, overall, many problems persisted, including erratic performance on the agent dedicated line (ADL). A joint letter was sent to Myrtle Lloyd, Director General Customer Services at HMRC in June, flagging issues with service levels and the ADL and calling for several specific actions. Subsequently, there have been follow up discussions at the Representative Body Steering Group (meetings with members of the senior HMRC team), and HMRC has launched the Service Dashboard for agents (one of the specific actions called for in the letter).
Working groups on CGT property reporting service and the Trust Registration service (TRS)
The CGT property reporting service and TRS have generated considerable amounts of feedback from Members. ICAS has been a member of two HMRC working groups, that have been instrumental in producing some improvements to both systems and assisting HMRC to develop detailed HMRC guidance for the CGT service and the new TRS manual (launched in 2022).
Employment taxes
ICAS co-chairs the Employment and Payroll group, the Construction Forum, the BEIS/HMRC NMW Forum and the Employment Status & Intermediaries (formerly IR35) Forum. Key employment tax issues discussed with HMRC in 2022 have included: compliance and enforcement around the COVID job retention scheme and problems with HMRC systems being experienced by employers and payroll agents. The intermediaries forum also considered reform of the offsetting mechanism in the off-payroll working regime to ensure the right people pay the right tax at the right time.
VAT
ICAS belongs to HMRC’s Joint VAT Consultative Committee (JVCC) and regularly raises VAT issues reported by Members through this forum. At the beginning of 2022 we were following up on issues caused by HMRC delays in processing VAT grouping applications (and problems with informal guidance issued by HMRC about what affected companies should do).This helped to prompt the publication of Revenue and Customs Brief 5 (2022): revised guidance on dealing with VAT grouping registrations. This addressed some of the key issues we raised.
More recently, ICAS has been raising Members’ problems with the new VAT Registration Service (VRS). There have been several meetings with HMRC to discuss the VRS and some improvements have already been made, with more in the pipeline.
Letter to the Prime Minister
In October, ICAS sent a letter to the incoming Prime Minister covering audit reform, sustainability and tax. The tax section highlighted ongoing problems with poor HMRC service levels and the need for these to be fixed. It also called for the government to ensure that HMRC has adequate resources to address patchy digital systems and to improve and maintain its service levels.
Tax consultations and calls for evidence
ICAS continues to respond to many tax-related consultations and calls for evidence and to participate in discussions with consultation teams, where appropriate. Written responses submitted by ICAS can be found on the Tax consultations and submissions page. ICAS has also contributed to many Office of Tax Simplification (OTS) reviews, including meetings in 2022 to discuss the OTS work on reviews covering simplification, property income and hybrid and remote working.
The government’s series of consultations on raising standards in the tax advice market has continued in 2022. ICAS responded to a consultation about protecting customers claiming tax repayments. We repeated our call for a requirement that everyone acting as a tax agent should be qualified, and should belong to one of the main professional bodies that subscribe to PRCT and enforce it. In our view, this would be the only fully effective way to assist consumers.
The government decided not to proceed with proposals to make professional indemnity insurance compulsory for tax advisers (subject to consultation in 2021) but announced that there would be another consultation about possible tax regulation and a definition of tax advice. This was expected to be published in the summer but has not yet appeared.
Let us know your views
Members’ input is vital to the tax team’s work on consultation responses – and to allow us to give feedback to HMRC on the problems Members experience with HMRC service levels and systems. Email tax@icas.com to share your insights and feedback.