In 1994, the Inland Revenue were grappling with similar problems to those that now face HMRC.  They were re-organising following a major review and were required to deliver efficiency gains with fewer staff.  The strategy at that time was to slim down the Centre and delegate to a Regional presence, so that staff would be closer to customers (who were still called ‘taxpayers’ then).  In addition, the ‘assessing’ and ‘collecting’ services within the Department were merging.  And interestingly, a new partnership with the IT organisation EDS was described as ‘a highly innovative arrangement’ for delivering ‘improved value for money and service to taxpayers’. 
 
Activity in 1994

Ambitious targets were set and mostly achieved.  Some parts of the Department undertook to reply to 90% of correspondence within 10 days of receipt, and to the remaining 10% within seven more days.  During 1994, the Inland Revenue had continued with its programme of improving service to the public in line with the principles of the Citizens Charter.  A survey of pensioners had shown a satisfaction level of 87%.  Plans were well advanced for closer working with Customs & Excise, while cultural change to the way the Department managed its work and people (by increasing customer focus and quality of work) was a priority.

Of course, in 1994 the Inland Revenue was not asked to administer national insurance contributions, pay tax credits or child benefit, collect student loans, or enforce the national minimum wage.  And their relationship with Customs & Excise was no more than ‘closer working’ – merger was still a long way off.

Comparison

Now let us go back to the PVW and compare it with the Mission Statement by putting the two documents side by side in tabular form:

HMRC’s PVW	Inland Revenue’s Mission Statement
Our Purpose We make sure that the money is available to fund the UK’s public services We also help families and individuals with targeted financial support	Our Job To provide an efficient, effective and fair tax service to the country and the Government by: ·          Helping people get their tax right first time and on time ·          Detecting and deterring people who do not voluntarily comply ·          Approaching all our work in a manner that demonstrates best customer service and value for money
Our Vision  We will close the tax gap, our customers will feel that the tax system is simple for them and even-handed, and we will be seen as a highly professional and efficient organisation	Our Aims Our Aim is to be respected as the best organisation in the public sector: ·          One which the public feel they can approach for help, guidance and fair treatment ·          One which is professional in all its dealings ·          One in which our people are properly trained, involved and motivated and to which they are proud to belong
Our Way We understand our customers and their needs We make it easy for our customers to get things right We believe that most of our customers are honest and we treat everyone with respect We are passionate in helping those who need it and relentless in pursuing those who bend or break the rules We recognise that we have privileged access to information and we will protect it We behave professionally and with integrity We do our own jobs well and take pride in helping our colleagues to succeed We develop the skills and tools we need to do our jobs well We drive continuous improvement in everything we do	Values The success of the Revenue depends on sharing common values: ·          Mutual respect, integrity, trusting people and earning their trust, being open and approachable and treating everyone fairly   In working together: ·          Fostering teamwork, encouraging initiative and innovation, taking pride in our work and having the determination to achieve our goals   All managers providing leadership by together giving: ·          A clear direction, encouragement and recognition and visible support and training

The power to tax

The most striking difference between the two is that in the first section of the PVW, today’s HMRC takes to itself what some might describe as a political role.  The functions of ‘making sure that the money is available to fund the UK’s public services’, and ‘helping families and individuals with targeted financial support’, some might have thought were both prerogatives of Parliament. It is for Parliament to determine taxes; HMRC’s role is to assess and collect the taxes decreed by Parliament.  Similarly, Parliament decides what financial support should be targeted on which families and individuals; it is then up to HMRC to pay it correctly and promptly.  In short, the law is made by or with the authority of Parliament; HMRC enforces it.

We understand that the PVW was put together by the senior management team within HMRC.  We worry that if HMRC purports to act as lawmaker in determining what the taxpayer should pay, and what the benefit claimant is entitled to receive, that is bad for all citizens, but particularly for those on low incomes who lack influence and cannot easily get redress.

The 1994 Statement recognises the distinction: ‘Our job . . . To provide an efficient, effective and fair tax service to the country and to the Government . . .’  italics supplied.

Besides, to place such emphasis on ‘making sure the money is available’, and ‘closing the tax gap’, gives one an uneasy feeling that if there is a choice between aggressively pursuing high-risk liabilities, and helping vulnerable low-risk customers, the former will win every time.

Nevertheless, the reference to ‘understanding the customer’ in the PVW (which does not appear in the earlier Mission Statement) suggests a realisation that the HMRC customer base now includes people on very low incomes who receive benefits, and that this requires a different approach.  Similarly, the reference in the PVW to protecting information to which they have privileged access derives from the experience of the loss of child benefit data.

Which gives the low-income customer the better deal?

In 1994, the emphasis was on ‘helping people get their tax right first time and on time’; now, it is ‘we make it easy for our customers to get things right’.  In both statements, it is the customer who bears the responsibility for getting their tax right; in the latter, there is something counter-factual about encouraging the customer to feel that that one of the world’s most complex tax systems is ‘easy’.  The theme of conjuring simplicity out of complexity persists throughout the PVW: ‘our customers will feel that the tax system is easy for them, and even-handed’. 

Perhaps it is better that low-income taxpayers and claimants, without representatives, should be able to rely on HMRC for accuracy – accuracy in paying them the right benefit at the right time; accuracy in charging them the right amount of tax, taking into account not only liabilities but also allowances, reliefs and exemptions; and accuracy in making known to them what their rights are under the law.  If that is the true function of today’s taxing authority, perhaps the 1994 Statement was a better document for the low-income unrepresented.

Finally, the Revenue of yesteryear was able to say:

• The department again achieved very satisfactory results. All key operational targets for the throughput of work were met.
• Collection offices similarly met all their key operational targets despite the continuing difficult economic conditions for all organisations involved in debt collection.
• We want to focus on all aspects of the quality of work: not just speed, also the accuracy and effectiveness, of work being done.
• Taxpayer surgeries and mobile enquiry centres will not only maintain face to face customer service in towns in which an office has been closed, but also bring an Inland Revenue presence to areas formerly without such a service.

It would be a fine thing if HMRC could say that in 2009.
 
And if they could, then perhaps there would be less need for a Taxpayer’s Charter, as it is, there seems even more need for the Charter to give a semblance of balance between the powers available to HMRC and the rights of the average taxpayer.