Further memorandum submitted by the Low
Incomes Tax Reform Group
1.1 We would like if we may to add to the
written evidence we submitted to you in February 2007. This further
evidence concerns the recording of telephone calls to the tax
credits helpline, a matter we have been discussing with HMRC since
the end of 2006.
1.2 Sometimes, when disputing whether they
should have to repay an overpayment that has arisen from official
error, claimants rely on the fact that they reported the mistake
in question to the tax credits helpline. Alternatively, they will
say they reported a change of circumstances, and the overpayment
has arisen because HMRC did not act on that information. Occasionally
such requests for write-off are rejected on the grounds that no
record exists of their call. However, we have found that in a
number of cases during 2003 and 2004, recordings were not in fact
made when claimants telephoned the helpline but were diverted
to a private sector supplier.
1.3 HMRC has always given us to understand
that the problem we describe was not significant, but information
given in response to a recent Parliamentary question by David
Laws MP tells a different story. We have seen the response from
Benefits and Credits:
"The private sector advisers dealt mainly
with general, non-claimant specific enquiries. They received the
same training and support as the HMRC staff to enable them to
1.4 It seems to us that accurately filtering
the generic from the claimant specific enquiries would have been
very difficult, so inevitably the private sector people must have
dealt with at least some of the latter. In any event, the private
sector operators who dealt with claimants ringing to notify a
change of circumstances, or to say that they did not understand
or that something was wrong, would not have needed to access claimant
records. They should have passed on the messages. It is the fact
that the claimants called that is critical. We think this is an
issue the sub-committee should consider probing.
1.5 We attach further background information
which may be helpful.
2.1 We have always understood that all calls
to the tax credits helpline are recorded, and the recordings checked
if a dispute arises at a later date. Public statements by the
Paymaster General seemed to have confirmed this understandingsee
her statement of 7 June 2005 (Hansard Column 71WH):
"I should remind everyone in the House that
all conversations with the helpline are recorded, so we can go
back and hear what was said and whether the system was notified.
We do that on a case-by-case basis in order to give a fair judgment
when challenged on overpayment. That is in addition to providing
the paper response."
and in response to a question by Gordon Prentice
MP (Hansard written answer 12 October 2006, col 879W):
"calls to HMRC's tax credit helpline have
been digitally recorded since the Helpline opened in 2002."
2.2 The importance to claimants of having
a robust system of recording calls is demonstrated by the following
two passages from COP26 What happens if we have paid you too
much tax credit?
2.3 In the first passage, claimants are
told that if they contact the Tax Credit Office to point out something
wrong with their award notice or payments, and are wrongly advised
by a helpline adviser or by letter that their award is correct,
any resulting overpayment will usually be written off. But:
"We will usually check that you provided
full information about your circumstances and income when you
spoke to the Helpline so they could give you the correct advice.
So please tell us the date and time you telephoned us when you
complete form TC846 to say why you disagree with recovery of the
2.4 The second passage follows a paragraph
in which is set out just what the TCO expect claimants to have
checked before they will agree to write off an overpayment:
"If there is a dispute regarding an overpayment,
we may check our call records to make sure that you contacted
us to let us know of any changes or mistakes."
2.5 In short, when an overpayment arises
through official error, whether the claimant is successful in
getting the overpayment written off under COP26 will often turn
not only on whether they contacted the TCO to report a change
of circumstances, or to correct a mistake in their award, but
also on whether the TCO can trace a recording of that call.
2.6 LITRG have recently seen a number of
cases where claimants in that position have maintained that they
contacted the TCO, but HMRC have found no record of their call
and on those grounds have rejected their request for write-off.
Sometimes the claimant can prove that they rang the helpline,
but sometimesif for instance, like many people on low incomes,
they use a pay-as-you-go mobile phonethey cannot. Where
the claimant cannot provide evidence, it is possible to ask the
Data Protection Unit of HMRC (DPU) for the recordings which the
TCO cannot trace, or some other evidence, such as an entry on
the "household notes", that the claimant called when
they say they did. If such recordings exist, the DPU will forward
them on CD; but sometimes there are no recordings.
2.7 Around October 2006, we were concerned
that correspondence from the DPU was bearing the footnote "Please
note that not all calls to the tax credits helpline are recorded".
Since this was contrary to what we had always understood to be
the case, we queried it with HMRC. Their response was that all
calls to the TC helpline are recorded, and always have been. In
the very early months of tax credits, however, some calls which
were handled outside the helpline were not recorded; but all calls
should be recorded now. In other words, calls answered by the
helpline have always been recorded, but some calls diverted elsewhere
may not have been.
2.8 We were unable to get HMRC to quantify
for us the number of claimants' calls which have not been recorded.
However, David Laws MP has elicited the following information
in a written answer (Hansard 20 Feb 2007 col 612W):
during 2003 and 2004 around 4 million
calls were handled by four private sector suppliers engaged to
deliver "generic tax credit services"; and
of those, some 631,000 calls were
not recorded (excluding calls to the freephone response line).
2.9 The problem, therefore, seems to have
been more widespread, and of longer duration, than we have been
led to believe.
2.10 As HMRC cannot now rely on the absence
of a recording as conclusive of the fact that the claimant did
not make the call, we have called upon them to give the claimant
the benefit of the doubt in any such dispute.