Umbrella company contractors might be unsurprised to hear that the Commons Treasury select committee has been told that HMRC is nearly at breaking point due to recent staffing cuts.
The head of taxation at the Association of Chartered and Certified Accountants, Chas Roy-Chowdhury, told the committee of MPs that the 25% reduction in staff numbers caused by the merger of HM Customs and Excise and the Inland Revenue were not helpful. He said that HMRC’s claim that the quality of customer service had not suffered was nonsense and SMEs are now wasting too much time trying to get the income tax advice they need when they contact the department.
This view was backed up by Paul Aplin from the ICAEW who told the committee that a simple matter of getting a tax code changed could now take months instead of the single phone call it took before the merger.
He went on to cite an example that occurred when an HMRC executive was present in his office. It took the tax office 12 minutes to answer the phone and a further 7 minutes to resolve an incorrect tax coding problem. He also pointed out that the 0845 numbers were prohibitively expensive for people relying on mobile phones as calls are billed at up to 40p per minute.
HMRC is continuing its crackdown on bad bookkeeping and plans to investigate 50,000 SMEs every year. The Revenue believes that many small business owners keep shoddy accounting records and intend to issue penalties of up to £3,000 to SMEs that do not keep up to date records.
But how is HMRC going to police this crackdown? If it is already having problems sorting out basic customer enquiries, and further staff cuts are imminent, where are the resources going to come from?
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