Saturday, 30 June 2012

Being self-employed, and dealing with HMRC

If you are a writer and make any income from writing then you have to fill in a self-assessment tax return every year (even if you have another job that is PAYE - Pay As You Earn). It is one of the joys of being self-employed.

Warning: there may be some irony being used in this blog post.

I'm going to detail an experience I had with HMRC (HM Revenue & Customs).



In my 14th December 2011 Self Assessment Statement I was asked to pay a small figure. This in itself was not a problem. However, I wanted to understand where the charge had come from and to better understand the tax system in general, so wanted to speak to someone about it. [Problem 1 - crappy statements] HMRC statements don't give any plain English explanation of where the figures come from and how they are calculated. Although not an issue for small figures, it would be for large ones, and would save those paying tax from having to face the unpleasant/hopeless situation of actually speaking to someone at HMRC.

I rang the phone number on my statement, for the Cardiff Office. I rang a number of times over a period of a month, and waited between fifteen and twenty minutes each time, being assured that someone would answer the phone - they never did. I also tried a central HMRC number twice. In total that was at least eight calls of up to twenty minutes each, being forced to listen to awful music and lying messages saying, "Thanks for waiting. One of our advisers will be with you as soon as possible." The procedure was made even more frustrating by the messages you have to listen to every time you ring up, telling you to look on the website, and forcing you to navigate a long-winded menu system that rarely offers options that match what you want and are often confusing - I remember once being asked whether I was an individual or self employed (which is bizarre, since I am both). So I had to waste hours of my time and pay for all these calls, whilst becoming incredibly frustrated that something which should have only taken a minute or two to resolve was dragging on with no end in sight due to the incredibly poor management of how HMRC deals with communications. I should add that this was not the first time I have had to put up with this - back in May 2011 I spent weeks trying to speak to someone, with the same result. It took eight or nine calls before the call was answered and someone actually spoke to me. Having decent communications channels is vital, since if we tick the wrong box on a tax form due to the over-complicated tax systems then we stand to be penalized heavily.

It is obviously unintentional irony on HMRC’s part that the central website says: “If you are unhappy with our service, please let us know as soon as possible. Usually speaking to [...] one of our helplines, will allow us to put things right quickly.”

[Problem 2 - crappy phone system] The HMRC phone system is a mess, as shown above. And yet it would be so easy to fix! All they need to do is set up a system whereby if no-one takes our call within two minutes then we leave a message with our phone number in and the details of the query, and they ring us back. That way we don’t have to put up with interminable waits or having to ring back and go through all the same options and messages again and again.

[Problem 3 - no online query option] The phone option for HMRC is pitiful. The only other option given to contact HMRC is writing a letter - which has its own disadvantages (write, print, envelope, pay for postage, no guarantee that it arrives, incredibly slow). What citizens expect, and deserve, is:
  • a fast and convenient system;
  • where they have a record of what was said (in a previous query I was told that the adviser didn’t think I needed to declare a bursary - but because it was on the phone I have no record of that);
  • where we can include things like a URL or screenshot when it is relevant, as they have been for some of my queries.
Luckily that system has existed for over 40 years, and is called ‘e-mail’, or (even better) 'secure online chat/message'. Unfortunately, HMRC don’t seem to have comprehended that these exist and can be used to provide a quality customer service. An online communication option could be secure, yet still have advantages over the options of phone and letter alone. Something along the lines of:
  • You login to the HMRC site. The site knows your details such as National Insurance number, UTR, name etc.
  • Then you fill in a form with the details of your query, and your preference for a response (phone, email, letter). Someone at HMRC responds, ideally via the channel you marked as preferred, but in some cases selecting a different one for security reasons. E.g. if the query was just about the tax bands, or how to pay an amount due, then there is no reason that could not be sent by email if the questioner preferred. However, if the answer involved lots of personal details then HMRC might respond via letter or phone instead. Either way this would be many times better than the current system, and UK citizens are being done a disservice by the fact that no online communication options is in place.
  • A better system could be that you select a secure ‘live chat’ option with a member of staff. You tell them the details of the query; you could paste in URLs or text if required; you could keep a copy of what was said. The HMRC contact answers your query; if that is not possible, they get back to you later with the answer (see above - could be phone, email, letter).
I decided to send these ideas to HMRC in a letter. Unfortunately the HMRC website was so poor that finding a general address for a query covering the whole HMRC service (rather than just a particular office) proved to be impossible. At the site I went through the links for 'Contact us', 'Appeals and complaints', 'Make a complaint to HM Revenue & Customs', 'How to complain' and 'Contact us in writing' where it said:

"If you would prefer to write to us, you can write to the address listed on any papers we have sent you. If you do not have any papers, please write to HMRC. You can find the address by following the link above."

However, that link was the 'Contact Us' link and just took me back to the start. No central HMRC address was given, even when I went via Contact us > All HMRC contacts (I tried H for HMRC, and C for Complaints, but just got led round the same links all over again). I just wanted a central HMRC management contact, not a branch office. Why couldn't they just have a ‘complaints’ page which listed a straightforward address? Aaaargh!

HMRC replied in February 2012. Their response?
[Problem 1 - crappy statements] They waffled on about calculations, did not make much sense, and signed it off.
[Problem 2 - crappy phone system] They just said that they were busy sometimes, and completely ignored my suggestions for a system that would get around that problem.
[Problem 3 - no online query option] They ignored my suggestions which had covered security issues, and instead just interpreted it as 'email', saying that email was not secure and they would not use it.

I replied, raising it as a 'further review' because I was unhappy with their response.
[Problem 1 - crappy statements] I pointed out that "I still think that there should be clear explanation of how figures are arrived at. Just giving a total leaves a person with no way of checking whether the figure is correct or not. I find it hard to believe that the calculations cannot be shown on the letter requesting payment too. If HMRC cannot explain in simple terms how figures are arrived at, how can anyone have faith that they are getting the sums right?"
[Problem 2 - crappy phone system] I said: "The complaint handler ignored the suggestion to improve the system immensely, namely: if no-one takes your call within two minutes then let us leave a message with our phone number in and the details of the query, and ring us back. It is a simple system, and it is hard to believe that it is not in place already. That way we don’t have to put up with interminable waits or having to ring back and go through all the same options and messages again and again."
[Problem 3 - no online query option] I told them: "This is the main complaint - if it wasn’t for this I would have been able to put up with the others. The only options given to contact HMRC are letter or phone. The phone costs money and is frustrating with delays and irritating background music, and you have no record of what is said unless you record the conversation - also, as I have showed in my original letter, the phone option for HMRC is pitiful. Letters take longer to write, require printing and an envelope, cost to post, are incredibly slow, there is no guarantee that it will arrive, and often you get some incomplete and unsatisfactory response which requires following up (as happened with my complaint). Even though I included two suggestions that would provide this in a secure way, my suggestions were ignored completely. However, for some queries security does not matter at all because they are of a general nature, so there is no reason why the reply could not be emailed (e.g. a query about nearest branches, or complaints, or where a piece of information is on your website). However, even that would be irrelevant if a secure system was put in place, as I explained in great detail in my letter. That was ignored completely. I will repeat it in the hope that it is read by someone who can understand what I am saying rather than just pasting in the standard response that seems most related to one of the keywords they spot."

Their reply to this, in May 2012, did not answer any of these issues and felt like a complete fob-off. I have run out of patience to list any more details, but you can imagine it: they spent half the letter listing a selective version of 'what I was unhappy about', then repeated the same confused answers as if they were cut-and-pasted from elsewhere, sometimes saying that I could phone them for further information - the thing that sparked off my original query!

At this point I gave up. HMRC are stuck in 1956. They can't understand plain English, which makes me worry about how they follow the instructions on their advanced calculators. They aren't customer-focussed. They don't want to actually have to speak to anyone as common as a grubby money-earner, and certainly don't want people to understand tax if my experience is anything to go by.

Obviously, now that I have posted this online, my tax bill next year will be in the millions, with no explanation as to how it was calculated. On second thoughts that won't be the case - I don't think the HMRC have heard about blogs or the Internet yet. I should be safe for another ten years.
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2 comments:

  1. I have to agree with your comment about incomprehensible statements (and that is just for PAYE tax codes and changes to them).

    I think you were being a bit hopeful about being able to have a meaningful answer to website improvement suggestions.

    ReplyDelete
  2. I think you're right Neil, I was too hopeful!

    ReplyDelete