WORKING TOGETHER WITH HMRC

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WORKING TOGETHER WITH HMRC

Last Thursday I gave the ICAEW Tax Faculty’s annual Hardman Lecture.  This is their premier public event.  Previous lectures have been given by such tax luminaries as Lord Howe, Peter Wyman, Sir Gus O’Donnell, Dave Hartnett and David Gauke, so it was an honour to be asked to speak.

I do not intend to repeat here what I said.  Anyone interested can find my talk on either the ICAEW website or CBW website (www.cbw.co.uk).

My talk was called Working Together with HMRC and in it I expressed my concerns about the relationship between tax agents and HMRC Officers, which I believe is at an all time low.  I also expressed my concern at HMRC plans to seek to exercise a significant degree of control over what agents do in relation to tax returns and to differentiate agents by reference to how helpful they are to HMRC.

In the past, local tax districts knew which agents in their areas gave cause for concern.  Centralisation of work by HMRC has resulted in a loss of that intelligence.  It is not surprising that HMRC should want to identify which agents pose particular risks to the tax system.  But they want to go well beyond that.  It appears to me that they see the solution to the severe cuts in their budget as to push their basic enquiry work onto agents.  In my view, that will greatly change the relationship between tax agents and the clients who pay the agent.

Some years ago HMRC and the main professional bodies involved in tax set up something called Working Together.  It must have been around 2000, as I signed the agreement with HMRC on behalf of the Tax Faculty as Chairman of its Technical Committee and I gave up that role in 2003.  The concept of Working Together was that agents and HMRC should meet locally to solve local issues, rather than such issues having to be fed into HMRC’s Head Office.  It was devised by Richard Mannion of the CIOT and enthusiastically adopted by both HMRC and the Tax Faculty.

On Friday I attended a Workshop on Enquiries staged by the Sutton Working Together group.  Working Together was always a bit patchy as the degree of local enthusiasm for arranging and attending meetings varied wildly throughout the country.  Earlier this year HMRC scrapped Working Together and replaced it with national agent webinars.  I think that Working Together had lost its rationale once HMRC embarked on a programme of closing local tax offices and centralising the work.  However replacing it by webinars is an odd reaction.  I attended one a couple of weeks ago.  The format was a presentation by HMRC followed by about five minutes to answer a handful of the questions that participants had e-mailed in.  In other words, it was not togetherness at all.  It was instruction by HMRC.  I do not wish to denigrate this HMRC effort.  At least it is doing something for agents, but it is a poor replacement for the original concept of local agents raising issues with local HMRC officers.

As I said earlier, I do not think that Working Together was working as intended.  Indeed, I do not think it ever did so.  I am accordingly not too sad to see its demise.  What does sadden me is that in some parts of the country, it was bringing together HMRC officers and agents.  I think it sad that HMRC did not leave in place those local groups which were working well.

Sutton appears to me to have decided that the original Working Together concept had missed the mark and what was really needed was joint training that would enable both sides to understand the approach of the other, what they do and don’t do, and the processes for handling tax returns.  I wish I had thought of that in 2000, because that seems to me a far better concept than the original one, although I suspect that it grew out of the original one.

Their workshop brought together around 40 local agents (from all of the tax bodies but including gate-crashers like me) and 15 HMRC officers to work through a three-hour case study together.  Technically I thought it leant too far towards scaring agents about HMRC powers and too little towards explaining those powers.  But that may have been the appropriate thing for the level of the audience.  What was much more important was that the workshop was designed to break down the barriers between the two sides.

I think it sad that HMRC have not sought to retain such local get-togethers where they were working well.  I accept that it is resource intensive to allow a large number of officers to spend half a day away from their desks three or four times a year – although in most organisations I doubt that a great deal of constructive work normally gets done on a Friday afternoon!  I would have thought that at the current time the goodwill towards HMRC created by such meetings would have been invaluable to HMRC.

I am sure that local friendships will have developed out of such activities.  I hope that now that they are no longer officially sanctioned, such relationships will survive.

ROBERT MAAS