Regular readers of this bulletin will remember that we have previously expressed concerns that mid-sized business can face particular difficulties in dealing with HMRC. The largest businesses have a dedicated relationship manager, who acts as a single point of contact to coordinate all of the businesses interaction with HMRC, and in most cases this works well. Small businesses generally have fairly straightforward tax affairs (complexity generally comes for them in the interaction of their owners’ tax position with that of the business itself) and don’t often need specialist support. But HMRC has often struggled to meet the needs of those businesses which fall between these two extremes.
Often the issue is simply one of access. In my experience once you have found the right person in HMRC to deal with your particular concern you generally get a good level of service and are able to resolve issues. But finding that person can be a nightmare.
So I was heartened to see that HMRC has now refreshed its approach to dealing with mid-sized businesses – define as those with a turnover of more than £10m and or/more than 20 employees. Some of the proposals, though welcome, are fairly modest - such as the creation of a mid-sized customer forum and better signposting of HMRC guidance.
However, the one that interests me most is the proposal that from June 2017 there will be a named contact service to support growing mid-sized businesses. This is not a full-time dedicated relationship manager for all aspects of the business, but a contact to assist with particular life cycle events, such as starting to trade internationally or making significant capital investment. Given that HMRC reports that 85 per cent of mid-sized businesses are planning growth activity of some sort in the next few years the demand for this new service could be substantial. Let’s hope that HMRC is properly staffed up to deal with what could be high levels of requests for support.
It is easy to be cynical about this sort of initiative – not least because we have all experienced HMRC initiatives which have fallen over at the first hurdle – but I do welcome this move. We have criticised HMRC in the past for an unfocussed scatter gun approach to taxpayers – for example nudge letters send out asking people to review their returns where there was no evidence of any omissions. However this proposal, which is targeted much more precisely to match the particular needs of a business at a crunch time in its development does seem to be properly thought out. Of course, we won’t know whether it will actually work until it has been launched and had a few months to bed down, so it will be interesting to see how this unfolds.
We do, quite rightly, call HMRC to account in this bulletin when it has done something wrong or, more often, failed to think through the consequences of its actions, so it is right that we acknowledge cases where a step has been made in the right direction.
If you would like to discuss any of the points raised above, please contact Andrew Hubbard or your usual RSM contact.