3. Supplementary written evidence from
HM Customs and Revenue
I wanted to write to you in your
new role as Chair of the Committee of Public Accounts and congratulate
you on your appointment.
As Principal Accounting Officer for HM Revenue
& Customs (HMRC), I will be giving evidence to the Committee
at fairly regular Intervals. HMRC is unique in collecting large
amounts of tax revenues and each year the National Audit Office
(NAO) examines our activities and principal tax streams to check
our overall management of the tax systems. This results in the
publication of the C&AG's report alongside the Trust Statement
and Resource Accounts and an additional PAC Hearing; this year
scheduled for 12 October.
I thought it would be helpful in advance of
this Hearing to provide you with an update on developments to
improve our contact centre performance and our plans to clear
outstanding PAVE open cases.
CONTACT CENTRE
PERFORMANCE
In response to the Committee's 24th Report on
HMRC: Handling Telephone Enquiries, we have continued with our
programme to improve performance:
— in ihe first quarter of 2010-11 we have
reduced sickness absence;
— we have increased staff utilisation;
— information is available in large print,
audio tape and Braille formats;
— type Talk service prefix number-18001;
and
— we have significantly Increased the use
of IVR (interactive voice response) messaging.
The Department's planning assumption was that
caller demand would reduce by 10% by 2010-11, due to the success
of our demand reduction activity In 2009-10, and our planned resourcing
and reduction in contact centre staff numbers was in line with
this. In fact the number of daily callers has increased by 15%
in the first quarter of the year and this has continued into the
second quarter. As a consequence, performance in call attempts
answered fell to 43% in quarter one of 2010-11 compared to 75%
in the same period in 2009-10.
We are reviewing the range of reasons for this
increase and the consequent impact on performance. There were
more PAVE callers than expected during the period when we were
issuing coding notices earlier this year. This period stretched
into our high peak of demand during the Tax Credits renewals contact
peak. In addition there was a 5% increase in the number of Tax
Credit claimants needing to renew their claims; and a significant
increase in the number of calls on the VAT helpline from customers
for a variety of reasons such as giving traders help with moving
to online filing and payment.
In addition, the introduction of a new caller
authentication and verification service for Tax Credits which,
although providing a much improved level of protection against
identity theft, increased Tax Credits call handling time.
We are doing all we can to mitigate this increase
In demand. We will be moving advisers between different lines
in our contact centres to help handle the calls arising from this
exercise and also have a contingency plan to bring in extra staff
from the wider Department should they be needed. We are also developing
further plans to improve long term performance. We are currently
reviewing our forecast for the full year but we will not now meet
the oullum we achieved in 2009-10.
LEGACY OPEN
CASES
When I appeared before the Treasury Select Committee
on 15 September I explained that we are currently working through
plans on how to clear each open case, and we have an ambition
to clear them by 2012. I have also considered the Report by the
Comptroller and Auditor General on HMRC's 2009-10 Accounts and
specifically the recommendation that the Department should:
— prioritise the clearance of open cases
where it believes the taxpayer has overpaid tax;
— examine the scope for accelerating the
clearance of the backlog through the use of automated software
rather than manual working; and
— re-assess the scope to Identify and exclude
underpayments of tax where recovery Is unlikely to represent value
for money.
We are committed to completing clearance of
all 17.9m outstanding legacy open cases by the end of 2012 and
have set up a programme to complete this clearance through the
use of automated software, with manual clearance following only
on an exceptions basis.
An experienced programme director has been appointed
to lead the work, the first stage of which will be to work with
our supplier aspire to design the technical solution. The next
step will be to analyse all the cases to identify precise volumes
of over and underpaid cases and the values associated with each
case. Once we have this information, we will consider what scope
there is to identify and exclude underpayments of tax where recovery
is unlikely to represent value for money. We will also review
what action we can take in respect of any case which may be unworkable,
such as where the taxpayer is untraceable, regardless of whether
it is an underpayment or an overpayment case. In the light of
any such decision the open cases will then be processed and any
overpayment repaid and any underpayment collected. As part of
this work we will also take account of any relevant lessons learned
from the current End of Year Reconciliation exercise.
In summary our approach will be to:
— develop and test the technical auto clearance
functionality;
— run all outstanding cases through the
solution to establish the tax effect;
— take decisions after consultation with
Ministers and HM Treasury on thresholds and the approach to concessions;
— run the reconciliation process to give
effect to those decisions; and
— clerically correct the cases that fall
to auto-clear and either resolve them manually or re-run them
through the system.
We are confident that we will be able to run
this process without interfering with live operations.
30 September 2010
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