Tax Credits: HMRC complaints

This section of the website explains how to make a complaint to HMRC. The material below was written by the Low Incomes Tax Reform Group.

The complaints process

Where HMRC has handled a case badly or if a dispute has failed, there is a complaints procedure which also provides for payment of compensation if a claimant has lost out financially, or suffered anxiety or distress, as a result of HMRC's error or delay.

HMRC's complaints procedure was originally set out in a code of practice, COP1. There have been numerous revisions of COP1 over the past few years, each one giving less information than its predecessor. The current version, which is no longer designated a code of practice, is in the form of a factsheet but, like many HMRC publications bearing that title, it is largely devoid of facts. The current factsheet version is available here.

Points to note about this procedure are: 

As noted above, the complaint should be made to the person or office the claimant has been dealing with. For example, if the complaint is about the handling of a compliance investigation this might be the compliance officer.

Alternatively you can write to the Customer Service and Support Group (CSSG) who will provide a written response to the complaint:

Complaints
Tax Credit Office
Preston
PR1 4AT

One very important point about the complaints process is that HMRC policy is not to suspend recovery whilst the complaint is being dealt with even if it goes to the Adjudicator or Ombudsman. Advisers should speak to DMB to see if they are willing to suspend, in some cases they might agree, in others they may stick to their official policy. In such cases, advisers must ensure that the claimant engages with DMB so as to avoid the case continuing along the recovery route and potentially reaching county court.

You can find out more about taking the complaint further in our Adjudicator and Ombudsman sections.

Your Charter

HMRC’s Charter was introduced in 2009 and has statutory backing in the Finance Act 2009. Although it does not replace existing rights and remedies, it is a useful addition especially in the complaints process.

There are nine rights for claimants and three responsibilities upon claimants. The Charter is available @ https://www.gov.uk/government/publications/your-charter.

When sending a complaint to HMRC, it can help to refer to the Charter, specifically identifying where HMRC have not met their obligations.

Compensation

If the claimant has suffered financial loss, or particular anxiety or distress, they should consider claiming compensation.

On financial loss, the factsheet says that HMRC will consider refunding any reasonable costs you have had to pay as a direct result of HMRC's mistakes or unreasonable delay. It lists, as examples, postage, phone calls, and professional fees. The former COP1 also listed under this head travelling expenses and financial charges. The claimant should keep evidence of all such costs (receipts etc) and show them to HMRC when asked.

On payments for worry and distress, the factsheet has this to say:

‘If you think our actions have affected you particularly badly, causing you worry or distress, tell us straight away. We may be able, in some cases, to make a payment to apologise’.

The former COP1 added:

‘These payments, which are not intended to put a value on the distress you have suffered, will usually range from £25 to £500’.

Under the former COP1 there was a third head of compensation for poor complaints handling:

'If we handle your complaint badly or take an unreasonable time to deal with it, we may pay you compensation, on top of any reasonable costs, to reflect this. These payments will usually range from £25 to £500.'

That paragraph no longer appears in the factsheet but there is no reason why poor complaints handling cannot be one of the factors to be considered in determining the amount of compensation for worry and distress.

The claimant does not have to accept what HMRC offer. Look at the case studies in the Adjudicator's Annual Reports to get an idea of the kind of sums that are agreed after reference to the Adjudicator's office.

Updated 24 August 2011