HMRC Office Closures

Louise Haigh Excerpts

Tuesday 24th November 2015 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

First, it is nice to see the Treasury Minister on the Front Bench. It is a shame, however, that he did not feel it was necessary to come to the House of his own accord to account for his unprecedented reorganisation of HMRC. I congratulate the Scottish National party on securing this important debate.

One issue that has not been covered so far is that of HMRC staff in lower bands who rely on tax credits to supplement their income. To travel from Sheffield to Leeds, as they will have to in future, some employees will receive an excess travel allowance. However, the allowance is tax deductible and could take them over the threshold for tax credits, meaning they lose their entitlement to that lifeline. Is the Minister aware of this issue, and will he look into the specific cases of those on tax credits employed by HMRC who may lose out as a result of this decision?

It is difficult to imagine that in a county such as Yorkshire—the largest in England, in which person could be up to 100 miles from Leeds—there will not be significant disruption for staff and taxpayers alike. What are the enhanced transitional arrangements to deal with HMRC being “rationalised”, in a county of our size, into one regional centre? What steps has the Minister put in place, not just for the tax official in my constituency who will have an 80-mile round commute—way beyond the one-hour suggested guideline—but for the small business owner living in Grimsby who wants face-to-face tax advice and will now face a 150-mile round trip for the privilege? The Minister and I both know it is unlikely that that person would make that trip. As a result, individuals will continue to be overpaid or underpaid, wasting HMRC’s time. In the past year for which figures are available, mistakes in the calculation of pay-as-you-earn led to almost 5 million people being mistakenly overpaid or underpaid. Almost a quarter of all tax investigations remain open more than 12 months later, and 3,800 are open over three years after being opened.

These issues are not new to the Government. In 2011, the Select Committee on the Treasury found that there were

“Unacceptable difficulties contacting HMRC by phone”;

it recommended that HMRC improve the service at contact centres, and the better targeting of letters that threaten serious consequences against individuals. That recommendation is particularly relevant. Many hon. Members have constituents who will have been contacted recently by the US multinational Concentrix, a company contracted by HMRC to handle some of its functions relating to tax credits. The performance of Concentrix has been little short of abysmal. A report by the National Audit Office in July revealed that the £75 million contract has resulted in savings of just £500,000—somewhat short of the £285 million that was projected. Tax credit recipients are bearing the brunt of the failing contract; tax credits have been wrongly stopped by Concentrix, and people have simply been unable to get in touch with it, leading to serious financial hardship.

In response to the same Select Committee report, the Government said that

“HMRC conducts full reviews before any changes are made to the opening hours of its face to face enquiry centres. The recently introduced changes”—

in 2011—

“in opening hours were made only after extensive public consultation, including a full equality impact review.”

They also said that the physical presence of HMRC is based on a geographical picture of the areas of higher tax risk across the country. In this unprecedented reorganisation, however, there has been no public consultation. The new offices’ locations have been based not on a picture of tax risk, but instead on wherever is most convenient to the Government in each region. I hope the Minister will correct me on this assumption and answer some of my questions. More broadly, the Opposition hope that the Government will recognise that the closures are the falsest of false economies, and will serve only to reduce tax take and damage further the relationship between HMRC and the businesses that sustain our economy.