Business confidence in HMRC’s competence decreased significantly as accountants raised “significant concerns” about the accuracy of the information it provided.
Official annual surveys of small and medium-sized businesses released by HMRC reveal that those with fewer than 20 employees are the least trusted, with trust levels dropping from 63 percent in 2021 to 54 percent in 2022. Trust levels among medium-sized businesses fell from 62 percent to 55 percent.
Fewer smaller companies said they were confident HMRC’s systems would catch errors, and fewer companies were happy with the length of time it took to handle tax returns. However, 74 percent said the overall experience of interacting with the HR department was positive, which is the same level as in 2021.
The survey found that the majority of mid-sized companies trust HMRC, although 10 percent did not. About 44 percent said the taxpayer tried to reduce the “cost, time, and effort” for businesses to remain in compliance, while 43 percent said the agency was good at helping them avoid mistakes.
A small but growing number of mid-sized businesses said they think tax evasion is acceptable “in some circumstances,” rising from 4 percent in 2019 to 6 percent in 2022. About 18 percent believe tax avoidance is widespread, and the most common source of this information was word of mouth.
The Chartered Institute of Taxation said that poor service levels at HMRC undermined HMRC’s ability to maintain the health of the tax system.
Richard Wilde, the institute’s head of taxation, pointed to a separate survey of 900 taxpayers and tax agents released at the same time by HMRC, which gave the taxman low scores on “responsiveness, ease, and accuracy.”
He said: “The accuracy of the guidance and information provided by HMRC continues to raise major concerns, while many respondents felt that obtaining a response and action via correspondence or telephone can be very difficult and time consuming, even for minor issues.”
A spokeswoman for HMRC said: “Most businesses trust us and trust to be treated fairly. We recognize the need to improve all levels of our services to increase trust. To do this, we must bring more of our customers to our online channels to offer them a better experience, while crucially providing support to the taxpayers who really need to talk to us.”
She added, “We continue to improve the way we communicate, improving the clarity and accuracy of directions and messages to make things easier for customers.”