My Lords, HMRC is responsible for collecting income tax, value added tax and a range of other taxes and duties. Tax returns are required to ensure the timely payment of the right amount of tax. The vast majority of returns are now submitted online, with information and guidance also available, plus a web-chat function. The satisfaction rate for digital services for the year to October is 83.6% and is higher than the rate for telephone services.
I thank the Minister for her Answer. My Question is about the running of the HMRC. As we all know, December and January are the busiest time of the year for people and their agents to return their tax files. As from 11 December up to 31 January, HMRC says that the self-assessment helpline will deal only with the most complex and priority cases. My first question is how the HMRC will know whether it is a complex and priority case if it does not answer the phone. The decision has been criticised by accountants and tax advisers as being very poor. Some callers say that they have been cut off without anyone answering the phone. What happens if they do not have computers or are not skilful in using them? Secondly, for the past 13 years the taxes have gone up, but the number of HMRC staff has come down in the past five years from 25,500 to 19,500. How do the Government justify HMRC’s poor services to the public?
If the noble Lord does not mind, I shall focus on the first part of his question, because it is very important. If a person phones the self-assessment helpline, what happens is that one gets asked what one’s query is. Of course, if the computer recognises this, and if it is a simple query—of which two-thirds are, not related to tax returns currently in process—one is directed to the digital services. One also might receive an SMS with a link to the specific service that one might need. At that point, the customer can also use the digital assistant or web-chat service. The noble Lord mentions vulnerable and digitally excluded people, and they are exactly the people that this intervention is hoping to include. It will allow the HMRC to focus on 120,000 more people, which will include the vulnerable and digitally excluded. Of course, through that process of triage, they will be able to stay on the system and speak to a person.
HMRC is an office-based organisation. However, officials can work from home for two days a week, if they can be fully effective in their roles. On average, advisers answer the same number of calls per day and work the same number of hours, whether they are in the office or at home.
My Lords, I wonder whether the Minister is aware that so many people have become so intimidated and discouraged by the process of trying to claim a tax repayment that an industry has grown up. Tax repayment agents and companies are now stepping in as middlemen to provide that service to people, but there is no professional standard or certification, and there is no regulation of any of these bodies—so the potential for people to be abused and scammed is very great. Are the Government going to take action to deal with this, either by improving the service so that these people are not needed or else by regulating them if they are?
The noble Baroness may be aware that the HMRC made a very targeted intervention on overpayments over the summer, to enable a backlog that had arisen to be repaid. That is now cleared, and the self-assessment helpline prioritises queries relating to returns, repayments and other complex matters.
My Lords, after Making Tax Digital, the HMRC expects small businesses and self-employed people to file returns and so on using approved accounting software. What consideration has HMRC given to the Horizon accounting software scandal? What steps are being taken to ensure that such software does not contain unexpected flaws?
There is actually a very competitive market in software that is able to speak to the HMRC system. No flaws have yet been found, but of course one is always aware of that.
My noble friend will be very pleased to know that I phoned HMRC on Monday and eventually managed to speak to a person. I did not tell them who I was, and I do not have very complex tax affairs. It was something very simple, but it could be done only by a real person.
My Lords, it is very interesting that the Minister here is defending an IT system installed by Fujitsu, after what we heard about the scandal at the Post Office. Coming back to the broader issue, as a result of fiscal drag there are more people filing self-assessment tax returns. Can the Minister tell us how many more people have been employed to handle the telephone queries? I have tried and I was unable to get through at all.
First, let me clarify that I am not defending Fujitsu or any other software— I am not sure where the noble Lord got that from. It is the case that more people will be filling in self-assessment tax returns, but it is also the case that, given the current figures, it seems that people are perfectly capable of doing so. By 1 January, 6.49 million people had completed their self-assessment tax return; that is 200,000 more people than last year and well over half of those whom we would expect by this stage, so at this current time we are not seeing a significant drop-off of people being unable to fill in a tax return.
My Lords, is my noble friend aware that, having seen the Question on the Order Paper, I contacted a number of professional accountancy firms to ask them whether the returns from HMRC are comparable to last year or not? The consensus appears to be that HMRC is running at least four to six weeks behind last year. Is there a particular reason for this?