HMRC, in disarray, cares more about how it’s perceived than about the public it should serve, says Tony Margaritelli.
What on earth is going on with HMRC? In the past couple of months so much has happened that surely the time has come to question the leadership and competence of those entrusted to apply the tax code.
Mull over these recent events:
• On 12 February, HMRC updated it guidance on the tax treatment of double cab pick-ups, saying that from 1 July all such cabs with a one tonne or more payload would be treated as cars for benefit-in-kind purposes and capital allowances. Fevered activity followed as proactive accountants got the message out and were taking calls of concern as a result. Seven days later, HMRC announced they are withdrawing the guidance and state: “The government has listened carefully to views from farmers and the motoring industry on the potential impacts of the change in tax-treatment.” Surely they should have known these views before they blithely made their announcement. Didn’t they have the courage of their convictions to fight their corner before meekly caving in, causing themselves to waste Lord only knows how much money in the planning and drafting of the guidance? To say nothing of the cost to practices that actually took them at their word.
• On 19 March, HMRC took to the internet to announce that its self assessment helpline would shut from early April until 30 September every year, and that the VAT helpline would only be open for five days a month. Uproar ensued, not unexpected for such an important announcement. Then, on 20 March, HMRC boss Jim Harra simply announced: “We’ve listened to the feedback and we’re halting the helpline changes.” I say again, they must have known these views existed and they equally must or should have had the faith that the much-vaunted online alternative were good enough to overcome criticism – or why make the announcement?
• On 27 March tax specialist and contributor to this magazine Dave Chaplin feels obliged to point out how HMRC’s stance on the CEST tool – so beloved of them – has been re-written. Dave highlights that on 4 March 2019, in oral evidence to Parliament, Jim Harra said regarding CEST: “We continually update the tool as new Tribunal and Court decisions are made about employment status.” However, in March 2024 it’s revealed that, as Dave, said: “FOI reveals that Jim Harra’s commitment didn’t come to fruition. Not a single change to CEST, despite 20+ IR35 hearing decisions, including Court of Appeal in Atholl House.” That’s bad enough – not one update made. Worse was to follow, as HMRC stated to Dave that they had only been “committed to continuously testing of CEST”. A level of ‘spin’ I have never before experienced from HMRC.
We now have a Revenue service that no longer has the faith in its own ability to correctly interpret the tax code, and stand by its reasoning in the face of criticism. Worse, it seems determined to put a positive spin on its actions. We all need an effective, efficient and capable Revenue service that thinks before it leaps and whose leaders have the moral fibre to stand by their decisions and to actually manage and be responsible.
Have we that now? Judging by the Past couple of months, sadly we don’t. If ever there was a need for a change then it’s now – before, for example, they unleash MTD…
• Tony Margaritelli is the Publisher of HMRC EIP magazine. Email Tony@hmrctaxinvestigation.co.uk