Business owners, employees and investors have endured an unprecedented year of uncertainty and turmoil as they navigate their way through the pandemic.
Despite requests by professional firms that HMRC should show more leniency regarding the difficulties faced by taxpayers and agents, it was not until the 25 January 2021 that HMRC reluctantly bowed to pressure and agreed that the first late filing penalty of £100 would not apply to Self-Assessment tax returns filed online by 28 February 2021.
In the same spirit as this last-minute U-turn, HMRC announced on 19 February that taxpayers would also not be charged a five per cent late payment penalty if they pay their tax or set up a payment plan by 1 April 2021. Ordinarily this would be charged on any unpaid tax outstanding on 3 March. Late payment interest will continue to be charged from 1 February on any amounts outstanding.
Whilst the relaxations are clearly welcome, an earlier announcement in both cases would have provided taxpayers with the certainty they required during this difficult period. HMRC is keen to promote its desire to work in partnership with its customers and published a new Charter on 5 November 2020. This sets out the standards, behaviours and values it aspires to when interacting with taxpayers.
Perhaps these announcements would have been an ideal opportunity for HMRC to demonstrate its commitment to improving its customer experience and apply its own Charter behaviours to reflect that ‘true partnership’ spirit?
The wording of the new Charter lacks some of the clarity and authority of the previous Charter, excluding a number of key elements such as HMRC’s commitment to minimise costs. It does however state that “we will make sure that the people you deal with have the right level of expertise and will resolve things first time or as quickly as we can”.
This is not evident from the conduct that we are experiencing in practice. We are seeing long delays, inaccuracies, a lack of knowledge of their own internal manuals and a reluctance to financially compensate taxpayers where delays, inconvenience or additional costs have resulted.
The Charter needs to be promoted both within HMRC and to the wider public to increase awareness. It may be that some HMRC officers are not aware of, or are not implementing, its own Charter behaviours and obligations, which needs to be addressed.