20 December 2010

Titles that covered this story included the Times, 17 December 2010.

• Just 9% of HMRC staff think change is for the better
• Only 11% have confidence in senior managers

A survey completed by over 51,000 members of staff has shown that morale among staff at HM Revenue & Customs has plunged to a new low in the wake of the PAYE scandal this summer.

The results are further proof of the ongoing disorder at HMRC caused by the mishandled merger of HM Revenue & Customs and the Inland Revenue in 2005.

Just 9% of staff surveyed believed that when changes are made at HMRC they are usually for the better. Only 11% of HMRC staff had confidence in the decisions made by senior management. Just 14% of staff felt motivated to provide the best level of customer service.

The 10,000 job cuts at HMRC announced in the October Spending Review will push the Department down to around 57,000 staff, from 91,000 immediately prior to the merger of the Inland Revenue with HM Customs & Excise in 2005.

Roy Maugham, tax partner in our London office, comments: “It’s astonishing just how low morale has sunk at HMRC. We deal with HMRC on a daily basis and it’s obvious to us just how much disillusionment there is in the organisation.”

“Our concern is that the culture that employees say is taking over HMRC is impacting on the way they treat taxpayers.”

“There has been a huge amount of re-organisation at HMRC since 2005. Much of it appears to be chaotic. If you write a letter to someone at HMRC, it will quite often sit unopened in the post room of a different office and only find its way to the recipient weeks later.”

“When dealing with tax disputes, it’s normal to have to speak to a different person each time you phone the Department. You find yourself having to explain the problem over and over again, and often get a different response from every person you speak to. The cost to taxpayers is huge.”

He adds: “A dysfunctional or overly aggressive tax authority will damage the competitiveness of a country’s economy.”
It emerged in September that nearly six million people had been charged the wrong amount of tax via the PAYE system.

About 1.4 million people have been told they owe an average of £1,428 each, amounting to about £2bn, in the past two tax years.
Nearly 4.3 million people will get a rebate of about £400 each because they have been charged collectively £1.8bn too much. It is unsurprising that low morale at HMRC has resulted in a lack of motivation amongst its staff.

Adds Roy: “Anyone who has dealt with HMRC recently cannot fail to have noticed that customer service has declined dramatically and that a culture of suspicion has grown up within the organisation.”

“The issues thrown up in this survey need to be addressed urgently if HMRC wants to win back the trust and confidence of the taxpayer.”

Roy Maugham