Thousands of vulnerable people are being pursued for tax debts they shouldn’t have to pay and are having legitimate complaints fobbed off by the taxman, Money Mail can reveal.
A bombshell independent report by the influential Adjudicator’s Office accuses HM Revenue & Customs of mistreating elderly and vulnerable taxpayers and failing to take account of their circumstances.
It found that nearly nine out of ten people who take their case to arbitration win.
Often these disputes have dragged on for months as the taxpayer struggles to get their problem taken seriously.
n a damning assessment, the report by the Adjudicator – who acts as a referee looking into complaints against HMRC – accuses officials of having a ‘limited appetite for reflection and learning from their interaction from customers’.
Over the 12 months to March 31, the Adjudicator received more than 11,600 enquiries from the public about rotten treatment at the hands of HMRC, the Insolvency Service and the Valuation Office Agency – though the taxman generated the overwhelming majority of these.
For the Adjudicator to intervene in a case, the taxpayer has to have hit a dead-end with HMRC.
In total, the Adjudicator resolved 1,808 complaints about HMRC – of these, 1,543, or a staggering 85 per cent, were settled in the consumer’s favour.
Robin Williamson, director of the charity Low Incomes Tax Reform Group, says: ‘Those who’ve persevered to take their case to the Adjudicator have already been through the mill, refused to give up and kept on at HMRC with their complaint.
‘Far too many will have given up or not even known they can take their complaint beyond tax officials to a watchdog. They’ll just have written off the money.’
In total, the taxman was ordered to pay out £244,000 for poor complaint handling and triggering worry and stress. Overall, its errors led to £2.9million of tax it claimed was owed being written off.
In her report, Adjudicator Judy Clements says: ‘I’m critical of the number of complaints where HMRC staff failed to consider the circumstances of their vulnerable customers – especially where [they] had the opportunity to exercise discretion.’
She also highlighted a number of particularly worrying cases where HMRC had failed to act fairly. In one example, Ms A, who suffered from severe dyslexia, had asked for documents to be sent in a larger print size.
This took a while to create, so she ended up receiving a letter on February 10 relating to a self-assessment tax return, which requested she pay her bill by January 31.
She phoned HMRC to say the letter was too late and no payslip to settle her debt to the Revenue was enclosed.
Her payment deadline was extended, but the payslip arrived too late for her to meet the new deadline, so she ended up being hit with interest and penalties.
The Adjudicator was critical of the Revenue for its lack of understanding of Ms A’s personal circumstances.
In another case, Mr B complained because HMRC had failed to update his tax code – as a result, he underpaid tax. He filed a request to have this debt written off using a legal waiver called Extra Statutory Concession A19.
HMRC turned this down, but the Adjudicator ruled that Mr B’s debt should be written off. This is just the latest evidence of faltering customer service at HMRC.
In September, a report from Citizens Advice found thousands of people were waiting an average of 47 minutes to get their calls answered. The National Audit Office also recently criticised HMRC for answering too few calls inside five minutes.
Earlier this year, the Revenue was forced to admit its behaviour ‘was not good enough’. Its own figures revealed how only 72 per cent of calls were answered in the 2014-15 tax year — below its 80 per cent target.
And Money Mail has frequently highlighted the fiasco faced by pensioners who try to claim the new Married Couple’s Allowance.