Third supplementary memorandum submitted
by the Inland Revenue
1. This note provides the information you
asked for about our Budget Payment Plan pilot and also explains
briefly our current thinking on payment methods.
2. We first introduced a small scale Budget
Payment plan pilot three years ago to test whether SA taxpayers
found paying by direct debit attractive. We contacted a sample
of taxpayers around our Newcastle office, offering them the choice
of paying monthly instalments towards their SA liability providing
they had no previous unpaid liabilities. More than 400 people
joined the scheme, paying nearly £100,000 each month.
3. We have looked extensively at promising
initiatives like the Budget Payment Plan and at our whole range
of payment methods as part of two Better Quality Services Reviews
of Banking and Debt Management. These recommended moving to electronic
payment methods (and, for individuals, direct debit in particular).
We are now taking forward those recommendations by establishing
the convenience and cost of the payment channels and payment methods
people use to pay us. Those channels include internet, bank counter,
automated bank payment systems, post, call centre and so forth.
And the payment methods include direct debits, debit cards, credit
transfers like bank giro and cheques. By doing that, we will be
able to identify preferred combinations that are convenient for
people in different circumstances to use and are cost effective
for us. Those are the combinations that we will develop and promote.
We have made slower progress than we wished
for two reasons. The first was the need to take account of the
two Better Quality Service reviews and of substantial changes
in our customer base, such as the introduction of tax credits,
and how we contact people, such as the development of contact
centres, outbound telephony and use of the internet. The second,
related, reason was that the costs in money and demand for expertise
of these changes to the department, meant that we had to make
hard choices about substantial investments, and payments was one
of the areas scaled back as a result.
13 May 2002