Select Committee on Treasury Written Evidence

Supplementary memorandum submitted by HM Revenue and Customs

  Members of the Sub-Committee asked HMRC officials to provide further information in writing on specific matters. These matters and the HMRC responses are as follows:


The numbers of requests from customers to delay repayment of overpayments that the Department has turned down

  Where there is no award in the current year the customer will receive a Notice to Pay and can pay back the overpayment in 12 monthly instalments if they wish. If they require more than 12 months Income and Expenditure details are obtained and consideration is given to payment over an extended period of time. At end-September we had 164,000 time-to-pay arrangements in place across the whole population of new tax credits of which 143,000 were for periods of 12 months or less and 21,000 for periods exceeding 12 months.

We do not hold management information on the number of requests to delay repayment that are "turned down" because the objective of the process is to reach an agreement, taking into consideration the particular circumstances of each individual case.

Where the Department considers that a tax credit has been overpaid, but the customer disputes that appraisal, the legal basis on which the Department continues to collect the supposed overpayment

  The Paymaster General wrote two letters to David Laws MP on this issue in June and July this year. Copies of both were placed in the House Library. I have attached copies. The Freedom of Information request referred to in the July letter was refused under the exemptions in sections 42(1) and 35(1)(a) of the Freedom of Information Act 2000. I enclose a copy of the letter detailing the reasons for refusal.

  The legal advice that we received is that it is justifiable to operate a system that includes a presumption of recovery by means of reducing or stopping further payments, while the investigation proceeds because:

    —  the majority of overpayments are correctly repayable; and

    —  HMRC have in place publicised mechanisms for dealing with those cases where repayments are not appropriate or may cause hardship.

Any data held by the Department, showing the breakdown by income bracket of customers who have received overpayments, and the extent of those overpayments

  On 1 June 2005, HMRC published a snapshot of 2003-04 overpayments based on payments of 2003-04 awards made up to 5 April 2004, which showed overpayments totalling £1.9 billion. These figures, broken down by income bracket can be found in Table 5 of Child and Working Tax Credits Finalised Annual Awards: Supplement on Payments, which is available on the HMRC website at


  Details of any increases or decreases of staffing numbers in the tax credits area over the previous three financial years

  For 2003-04, the first year of new tax credits, the Inland Revenue employed around 7,300 full time equivalents to work on tax credits. The number rose to around 8,200 in 2004-05. The number of staff employed at any one time varies throughout the course of the year as extra staff are brought in at peak times.

Amounts of overtime worked by staff working in the tax credits area, and whether the amount of overtime worked has increased by comparison with previous years

  The number of hours of overtime worked by staff in the Tax Credit Office (TCO) in each of the last four years was:

    2001-02    98,000

    2002-03  105,000

    2003-04    95,000

    2004-05    78,000

  [We do not hold figures for overtime payments ascribed to tax credits work for the Department as a whole. For example some staff in Enquiry Centres will spend some of their time working on Tax Credits, and some on other tax queries.]


Details of work undertaken by the Department in order to improve the service it offers to its disabled customers

  HMRC is keen to make it as easy as possible for all it's customers—including those with disabilities or impairment—to understand and comply with their obligations and to receive their tax credit and other entitlements.

  We recognise that those of our customers who have disabilities or impairment may need extra help and support to access our services and we have a [substantial] package of measures in place to help:

    —  All our Enquiry Centres (and other offices where the public attend voluntarily to access our services) have been surveyed to identify access issues. We have subsequently completed a programme of works to make all reasonable adjustments in line with the Disability Discrimination Act 1995. These adjustments included fitting automated opening doors, ramps, handrails, induction loops and tactile signage. Where reasonable adjustments have not proved possible because of building constraints, local business managers have implemented alternative means of providing the service to a potential disabled visitor.

    —  All our Enquiry Centres are equipped with induction loop systems and crystal listening devices to aid our hearing impaired customers.

    —  We provide—on request—copies of HMRC forms, leaflets, guidance notes and other written material in alternative formats (Braille, Large print, Audio, CD and Floppy Disk) to those with visual impairment though a dedicated Visually Impaired Media Unit.

    —  Our website is designed to be accessible to all our user groups, including those with disabilities and impairment. Accessibility standards are in place to make the content accessible to the widest possible range of visitors, regardless of disability or impairment.

    —  All our contact centres have type-talk and mincom facilities which enable access by customers with hearing impairment and virtually all our switchboards serving local HMRC offices also have type-talk capability.

    —  For those of customers who are either elderly and infirm, or whose disabilities or caring responsibilities prevent them from visiting our offices, we will undertake home visits.

The numbers of containers checked at UK ports under Programme Cyclamen

  Cyclamen operates currently at three ports, and one airport, and checks inbound movements of Roll-on-Roll-off (RoRo) ferry traffic, sea containers, and air freight. There are also currently two mobile Cyclamen units undergoing trials.

  The total number of arrivals that have been screened by the Cyclamen equipment is 1,533,822 since April 2004. (618,615 from 1 April to 30 September 2005)

  The number of arrivals causing the equipment to alarm is 11,954 (4493 from 1 April to 30 September 2005). These arrivals were intercepted and examined by HMRC to establish the reason for the alarm, which is normally caused by naturally occurring radioactive materials, and are readily cleared. A handful of alarms have resulted in more in depth examination and detention because of radiological contamination of the cargo, or other concerns that needed to be investigated, but there have been no incidents involving materials that might have been used by terrorists.

  Most of the traffic screened at RoRo ports arrives in 40 foot, hard and soft sided trailers, as well as containers, and it is impossible to differentiate between containers and other road freight to provide a precise number for containers only.

Details of any increases or decreases of staffing numbers in the Large Business Service over the previous three financial years

  The table shows the staff in post in the Large Business Service, made up of the Large Business Group (former HM Customs and Excise) and Large Business Office (former Inland Revenue).
March 2004March 2005 April 2005
(creation of HMRC)
Large Business Group986.44 983.92983.92
Large Business Office801.76 846.05902.06
Total1,788.2  1,829.97 1,885.98

Note: The Energy Group is included in the Large Business Office figures for April 2005.

Details of the methodology which the Department intends to use in order to achieve an integrated departmental IT system, given Inland Revenue's pre-existing relationship with Capgemini and HM Customs and Excise's pre-existing relationship with Fujitsu

  HMRC established the Strategic Framework in May 2005, which set out the department's vision for IT over the next three years. The purpose of the strategic framework is to demonstrate how HMRC will use IT to help individuals and business pay the right amount of tax due and receive the credit and payments to which they are entitled. In addition it also looks at how IT can help increase the customer experience, support business and reduce the compliance burden. And finally how IT can help HMRC deliver the Gershon efficiency savings.

  The IT Strategic Framework has explicit objectives to enable more efficient and effective business processes by focusing in four main areas.

    —  The operation of optimised daily services.

    —  The development and implementation of next generation solutions.

    —  Effective listening and working with both business and our external partners.

    —  Developing a high performing team of valued professionals.

  In order to meet these objectives HMRC are:

    —  Establishing a vital link between IT development and the business, enabling the business' needs and strategy to be identified.

    —  Establishing an approvals process which will enable HMRC to priorities the IT development work.

    —  Working with their IT partners' to review live services in order to improve their day to day service.

    —  Have launched a skills development program in line with the wider Government initiative to increase professional skills in the Civil Service.

    —  Developing a 2020 vision to consider how IT might enable the delivery of HMRC services.

October 2005

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