There has been a steep rise in the number of taxpayers unhappy about the way HMRC has dealt with their complaints, and many of the problems reported are down to 'careless and avoidable' errors by HMRC staff, according to the 2013 report from the Adjudicator's Office.
The Adjudicator's Office, which handles complaints about HMRC, the Valuation Office Agency or the Insolvency Service, received a record total of 2,612 new complaints last year, with the biggest share relating to HMRC complaints, meaning the agency had to take on extra staff.
Adjudicator Judy Clements said the increase was all from HMRC customers and included PAYE complaints up by 347% and tax credit complaints up by 59% on the numbers received in 2010-11.
Clements said she had identified a number of areas where 'systemic failures' within HMRC resulted in poor complaints handling. 'Frequent and repetitive' types of issues included failure to follow policy or proper procedure; inconsistent application of equalities legislation; mistakes; giving inaccurate information; and recording incorrect details.
'This year we mediated 24% of cases compared with 20% in the previous year. For the first time since the role of Adjudicator began, I am upholding six out of every ten complaints from HMRC customers either wholly or in part,' Clements said.
During 2012-13 the Adjudicator's Office received 1,331 new complaints about a range of taxation issues, which accounted for 52% of the total number of complaints received and represented a 107% increase on 2011-12. Of these, 525 were resolved and in half of the cases (55%) the complaint was upheld either partially or substantially.
Towards the end of the year, the report states, many of the complaints were about PAYE and were reviewed under the provisions of HMRC's Extra Statutory Concession A19 (ESC A19). The number of PAYE complaints upheld increased to 66% and Clements noted many of the cases 'included careless and avoidable errors which had not been identified or put right during HMRC's handling of the complaint'.
As a result, HMRC paid a total of £354,321 in compensation payments in 2012-13, compensating for poor complaint handling, worry and distress, cost and liability given up.
In addition, HMRC paid £839,711 in redress for its failure to handle complaints about its handling of tax benefits and credits, most of which centred on HMRC's refusal to write off overpayments under Code of Practice 26 (COP 26). The Adjudicator said it was 'disappointing' that over 60% of cases were upheld, saying this was evidence of failure to learn lessons and get things right at an earlier stage. Total complaints about tax and benefits were up by 33%, with 1,243 new complaints received.
Clements also flagged up concerns that HMRC is still failing to recognise or address specific customer needs, saying: 'I am unable to establish whether complaint handlers are not recognising the customer need or feel they are not empowered to step outside of procedures and provide alternative support. Either way this is an area of serious concern and, in the context of an ageing society, a matter which will grow in importance and visibility.'
The annual report is available to download HERE
