HMRC’s tax collection processes

by Tax Faculty Team on 02.01.2013 12:18

Tax Faculty's concerns and recommendations for DMB


The Tax Faculty has been collecting members’ comments on the operation of HMRC’s Debt Management and Banking (DMB) service. We have a number of concerns and also recommendations for improvement. We sent these to HMRC at the end of December 2012 and they are published in TAXREP 65/12


The Joint Initiative on Service Delivery (JISD) group is already looking into existing concerns which have been raised through Working Together meetings. Our comments are intended to add to their understanding of the issues currently facing agents and taxpayers.


The main issues we raised are:


·        We are concerned at the lack of consultation with the professional bodies prior to the introduction of significant operational changes within DMB. We believe that had proper consultation taken place with bodies such as Working Together Steering Group, many of the issues now being reported could have been foreseen and averted.

·        There appears to be a lack of communication between HMRC and the outside agencies it uses to collect outstanding tax. This is leading to the unnecessary pursuit of tax which has in fact already been paid or which is not due.

·        Letters from HMRC to taxpayers are often unnecessarily threatening.

·        The letters do not show a telephone number and given the urgency of these cases, agents would like to have a line dedicated for their use should they receive calls from worried clients who are being visited by debt collection agents.

·        Agents experience difficulty in communicating with HMRC even where taxpayer authority is in place and has been for some time.


TAXREP 65/12 includes a detailed commentary on how the collection process operates from start to finish (as we understand it) and shows some of the areas where things can go wrong, along with our comments.


We have the following recommendations as to how HMRC could improve its debt management:


·        HMRC should review its Time to Pay arrangements to make sure that they are applied sensibly and fairly. We believe that this will help to combat the perception that HMRC has little interest in helping taxpayers to comply with their obligations,

·        HMRC should improve its internal communications so that tax is only pursued once it is legally due and the taxpayer has been given a reasonable chance to pay it before solicitors and debt collectors are involved.

·        HMRC should provide information on letters sufficient to enable the agent to identify the client.

·        HMRC should review the tone and content of letters to ensure they are appropriate to the level of non-compliance with payment.

·        HMRC should provide an Agent Dedicated Line for urgent use and that is easy to contact, and is not an 084... number but a geographic landline number.

·        HMRC should ensure that agent authority can be viewed by DMB telephone operators.

·        HMRC should urgently review its processes in order to ensure that agent authority is correctly applied throughout all its systems.

·        One DMB office should collate all the relevant information. We understand that a form 100B is available within HMRC for this purpose.

·        Officers and external debt collectors who communicate with or visit taxpayers or their agents have accurate and up to the minute information in advance of the call being made.