Is HMRC's new draft Charter an improvement?

HMRC’s new draft Charter has some encouraging additions but a few concerning omissions will hopefully be amended before it is finalised

09 April 2020

HMRC has released a consultation on a new draft revised Charter.

The revised Charter is predominantly a slimmed down version of the current Charter – essentially a set of service-standards to which HMRC holds itself. And, helpfully, the new Charter has kept itself to HMRC’s standards and omitted material in the previous version which set out the standards HMRC expected of taxpayers.

However, the new Charter has a few concerning omissions.

First and perhaps most significantly, HMRC has deleted the promises that it will:

  • keep costs to taxpayers to a minimum; and
  • deal with information efficiently.

While those who have been faced with interminable and expensive HMRC enquiries might doubt the veracity of the previous Charter with regard to timeliness and costs, the dropping of these standards is disappointing.

Second, HMRC has deleted the promise to ensure people with the right level of expertise deal with enquiries. This is another key requirement: if employees without the right level of expertise deal with queries, taxpayers could be given an incorrect answer or incur extra costs contesting HMRC's decision. This omission also goes against the Loan Charge Review in December 2019 which recommended that HMRC's Charter be reviewed 'to set high expectations of performance during interactions with members of the public'. 

Third, the revised Charter is less clear on how it will take action against those who bend or break rules. The current Charter states HMRC will charge rule breakers interest and penalties and use its powers responsibly; the revised Charter just states that it will take 'firm action' against those who don't pay their tax. HMRC needs to take a clear, consistent approach against any taxpayers breaking the rules.

Despite these concerning omissions there are also a few welcome additions to the revised Charter. There is a new section stating that HMRC will be aware of personal situations and give extra support if needed. This will be of great comfort to struggling taxpayers and is particularly important in the difficult times businesses currently face with COVID-19.

Additionally, the revised Charter promises to give taxpayers 'accurate, consistent and clear information' to help taxpayers understand their rights and what they can claim. It also promises to explain how taxpayers can make a complaint if they are not happy with the service they have received. This will hopefully help taxpayers and advisors alike when they are communicating with HMRC and helps to provide a clear route of recourse.

Whilst the revised Charter introduces some encouraging promises, the level of support for struggling taxpayers and the accuracy and clarity of information provided is yet to be seen and the Charter needs amending to reintroduce key promises omitted.

If you have any queries on the consultation please contact John Barnett.

This article was written by Georgina Tyas.

Key contact

John Barnett

John Barnett Partner

  • Head of Private Client Services
  • Head of Partnerships
  • Tax

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