Our examination of HM Revenue & Customs’ (HMRC’s) performance has identified a number of matters of concern, some of which we have raised before. HMRC is relying on new digital services to transform its business and reduce demand on its call centres. Making a success of this is vital to safeguarding tax revenues and ensuring an acceptable level of customer service. It is therefore essential that HMRC avoids repeating the mistakes it made two years ago when it reduced the number of staff in its personal tax service prematurely, resulting in a disastrous decline in customer service. We remain concerned that HMRC does not scrutinise effectively whether tax reliefs are being used as intended or provide Parliament with sufficient information on the costs of tax reliefs and their effectiveness. HMRC’s contract with Concentrix to investigate cases of potential fraud and error has been a complete failure. Concentrix’s actions have resulted in many tax credit claimants being wrongly accused of fraudulent claims and so losing their payments causing unnecessary distress and hardship. HMRC must ensure that lessons are learned from how this contract was designed and managed to make sure that such an unacceptable breakdown in service is not repeated. We welcome the introduction of country by country reporting of the activities of multinational companies, but this will not provide the much needed transparency over their tax affairs as the information will be supplied to HMRC on a confidential basis.
30 November 2016