Insights

HMRC has been criticized heavily in recent months for a range of internal failings and so at first glance the announcement last week, that it will be introducing a new role of customer coordinator to manage taxpayer relationships, sounded good. However, is this going to create a 3-tier system for taxpayers? And potentially leave those needing the most help with the least support?

We already have customer relationship managers appointed to act in a liaison and support capacity for the largest businesses. This arrangement will continue but the department is now extending their customer relationship management programme to offer large firms who do not currently have this facility a customer coordinator. It is likely to be very useful for the firms who fall into that category but what about smaller firms? What support will they receive? Obviously many will work with tax advisers who act as their agent with HMRC, but shouldn’t they have access to the same level of support? It’s clear this would be expensive for HMRC to implement, but regardless of that, it is effectively going to create an uneven playing field.

Now, we are potentially facing a situation where the biggest organizations, who have the largest resources to use highly qualified agents, getting personal support. SMEs, who typically also employ agents but will not be getting extra support from HMRC, which they could otherwise benefit from. Then, as a third group we will have the most vulnerable tax payers, those who cannot afford an agent, and who may soon hardly be getting any additional support at all. Up until now, this group – which includes pensioners, tax credit claimants, migrant workers and some small business owners - would have been able to visit their local tax enquiry centre office and get personal advice. In March, HMRC reduced opening hours and now a number of these centres are open just one or two days a week. Further cuts are likely and it will be a great shame for this service to disappear.

HMRC has changed its approach towards assessing taxpayers according to a risk profile and we believe they are diverting resources towards activities considered to yield the greatest returns. They clearly regard larger businesses as a risk area and must believe that by investing in personal support for them, will help reduce the levels of avoidance or incorrect tax payment.

Paul Webb is a tax partner at RJP and a small business tax expert

www.rjp.co.uk