It is inevitable that at some point within HMRC’s dealings with taxpayers, mistakes will happen. In the UK we have a tax code that recognises that taxpayers will make mistakes in their tax affairs and shouldn’t be penalised either financially or reputationally if the mistake was made with honest intentions. It is also reasonable to expect HMRC officers will unwittingly make mistakes on some occasions, and these matters can be resolved without the need for the taxpayer to make a formal complaint.
The statutory appeals process may be available to force HMRC to reconsider their previous decisions, and Alternative Dispute Resolution (ADR) may be suitable to resolve conflicts through a mediation process. In some cases, neither of these options will resolve the issue to the satisfaction of the taxpayer and the Tribunal process will need to be considered.
But there will also be times when the taxpayer may want to consider making a formal complaint. This is likely to be where:
- They have received poor service, or
- They have experienced unreasonable delays.
This article provides advice on when raising a complaint should be considered and looks more closely at HMRC’s formal complaints process.
When should a complaint be made?
The starting point when considering whether there are reasonable grounds to raise a complaint is “The HMRC Charter”, which is published on the Gov.UK website. The Charter is a legal requirement which states HMRC must publish “standards of behaviour and values to which [HMRC] will aspire when dealing with people in the exercise of their functions”. The Charter has been amended over time but there are currently seven guiding principles which HMRC aim to follow. These set expectations of HMRC in areas such as accuracy of information provided, responsiveness, fairness, and applying empathy towards a taxpayer’s personal circumstances.
If the taxpayer (or their agent) feels that HMRC’s standard of service has fallen below the expectations published in the Charter, then it follows raising a complaint may be justified.
There are four stages to the complaints process, passing through each stage in order until the matter is resolved, the taxpayer withdraws their complaint or there are no further options available.
- Stage 1 – Tier 1 review
- Stage 2 – Tier 2 review
- Stage 3 – Adjudicator’s Office
- Stage 4 – Parliamentary and Health Service Ombudsman
Stage 1 – Tier 1 review
This is the first stage in the complaints process and on receipt of the complaint HMRC will inform the taxpayer the name and contact details of the person dealing with the matter. After HMRC has reviewed the complaint, the taxpayer will be notified of the outcome and advised on their options if they are still not satisfied.
If upheld the complaint may lead to an alternative decision, a change in approach from HMRC or financial compensation for the taxpayer.
Stage 2 – Tier 2 review
If the taxpayer is not satisfied with the outcome at Tier 1, then they can request the complaint be escalated to Tier 2. This will involve another officer at HMRC who has had no prior involvement in the case reviewing the merits of the complaint and deciding whether to uphold the Tier 1 decision.
Stage 3 – Adjudicator’s Office
If the taxpayer is not satisfied with the outcome at Tier 2, then they can request that the matter be investigated by the independent Adjudicator’s Office. The application to the Adjudicator’s Office must normally be made within six months of the Tier 2 decision and there are four types of complaints which they can look at –
- If policy and guidance were applied fairly.
- Administrative errors including unreasonable delays, mistakes and poor or misleading advice.
- How discretion was applied.
- Staff conduct which led to poor customer service.
The Adjudicator’s Office has its own guidance that it follows which is publicly available and explains in further detail how they go about investigating complaints against HMRC. A complaint cannot be made to the Adjudicator’s Office until it has first been considered at Tier 1 and Tier 2.
Stage 4 – Parliamentary and Health Service Ombudsman
If the taxpayer is not satisfied with the outcome of the Adjudicator’s Office investigation, then the final stage in the process is for the taxpayer to ask an MP to send the complaint to the Parliamentary and Health Service Ombudsman to consider further.
At all four stages of the complaints process it is important that the taxpayer and, if relevant their agent, collects and retains evidence to support the complaint. At no point in the process is it appropriate for any party to act in an abusive way, which can sometimes be difficult in what are often very stressful circumstances. It goes without saying but where a complaint is being managed by the taxpayer’s representative, they should be completely professional and courteous with HMRC staff throughout the entire process.
If you would like to learn more about making a complaint against HMRC, please contact Menzies’ Tax Disputes and Disclosures team on our free confidential helpline: