For a long time I've criticised the lack of quality and effectiveness in HMRCs work. I accept that government is largely to blame for this by cutting costs but quite often top management makes some ridiculous decisions also.
The decision to stop sending out copies of various documents to agents is another bad decision which is short sighted and cost HMRC more in the wrong run by dealing with tax agents who have incomplete information. HMRC could have at least put these documents on their website for access by agents along with an email notification.
This is an article from AccountingWeb
"HMRC hasn't been fit for purpose for a very long time," said the anonymous officer, who has worked at the department for 10 years. "It's is now at melting point. We don't have the staff we need, we don't have the resources we need and the computer systems we use are atrocious."
The interview with BBC's Andrew Hosken came on the back of press frenzy around PAYE miscalculations which were triggered when HMRC sent out 45,000 letters informing people of over- and underpayments.
This week's controversy is largely down to the department's new NPS computer system, the officer said: "We're on the fourth release of the software and it's still not working properly. Because we don't have staff to check individual cases, all of these mistakes are happening and all of this post is going to to our customers, the taxpayers."
Some of the system flaws are because HMRC's software wasn't written by tax people or anyone who had any idea about tax, she explained. For example, the system uses the employer number as a taxpayer's initial indentifier, not a unique National Insurance number.
Staff shortages mean that customer service at tax offices and call centres is suffering and "the country doesn't have the money to run because we' re not resoured properly enough to collect those taxes", she added.
"Debt collection banking are so short staffed, that when we can see a problem elsewhere there's nobody to follow up."
HMRC currently acknowledges that £30bn-£40bn of tax is going uncollected, and the anonymous HMRC interviewee commented that Richard Murphy's Tax Justice report suggests that figure could be 3-4 times higher.
This week's press reports were not overly sensational, according to the official, who was surprised that the publicly quoted figures of errors on 23.7m of cases was so low.
Some 44m telephone calls from taxpayers reportedly went unanswered last year and according to the officer 1m unanswered letters are squirrelled around tax offices across the country. "When I first started, we would get hauled over the coals if a letter was still unanswered after 7 days; now we're looking at three months."
The BBC has been tracking the problems for HMRC's case for over a month, since it became aware of the scale of the problems identified in the NAO's report on HMRC's 2009-10 annual accounts. The broadcaster commissioned Nine Lives Media to produce a programme on the effects on individual taxpayers, and they in turn put out a call for participants via Ken Frost's HMRCisshite website.
The programme will look at how and why so many incorrect tax codes were sent out in January, meet people who were affected, and try identify groups who might be in for a surprise when correct codes are finally calculated and demands for payments are sent out."