Complaints that have been totally upheld against HM Revenue & Customs have risen sharply by 313% over the last two years.

According to data obtained from the Adjudicator's Office by UHY Hacker Young Chartered Accountants [1], complaints that were substantially or wholly upheld have risen from 108 in 2008, to 229 in 2009 and 446 last year.

But with the data comes news that the proportion of wholly upheld complaints has also risen. In 2008 just 7% of complaints were wholly upheld, but in 2010 this had risen to 21%.

The report points to a string of 'high profile administrative problems' such as incorrect PAYE codes and increasing delays over VAT registration. 'The surge in the number of complaints being wholly upheld is a result of deteriorating levels of service at HMRC over the last few years, which has seen mistakes and delays become much more common' the report said.

Commenting on these issues and the further staffing reductions expected at HMRC due to the forthcoming cuts UHY Hacker Young tax partner Roy Maugham said 'The level of service at HMRC is now a huge concern. There has been a succession of major errors in the past few years, from incorrect PAYE codes to lengthening delays in issuing tax rebates. Even getting a response to a simple letter of enquiry can now take months. There have been big cuts in staffing levels since the merger between the Inland Revenue and Customs & Excise in 2005. A further 10,000 job losses at HMRC were announced in the Spending Review. HMRC is struggling for manpower as it is, so these cutbacks will put further pressure on performance levels'.

He goes on to say that these declining performance levels are affecting some business's cash flow positions so affecting their ability to trade and the figure that 56% of all VAT penalties and decisions that are appealed are quashed backs the claim up.

The article also says that morale is low in HMRC with just 9% of people within it saying in a Dec 2010 survey believing that changes are usually for the better. But morale has been a concern for quite some time now.

The really big thing to be hoisted in is that a complex tax system needs more resources than a simple one. The way forward here is to simplify the tax regime and that will surely benefit us all.


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