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.
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:
- To make a complaint, write or speak to the person or office you (or the claimant) have been dealing with, putting 'complaint' at the top of your letter if you are writing. You can also complain by fax or in person but not by email. You are asked to tell them as much as you can about your complaint, including what went wrong, when it happened, who you dealt with, and how you would like it settled. This is called the ‘Tier 1 Complait’
- If the response of the local office is unsatisfactory, ask the office to look at your complaint again. It will be referred to a senior officer who has not been involved, who will take a fresh look at it and how HMRC have handled it, then give you a final decision. This second review is often called a 'Tier 2 complaint'.
- If you are not happy with the response of the senior officer, you can ask the Adjudicator to look into your complaint.
- If you are unhappy with the Adjudicator’s decision, you can also ask your MP to refer the matter to the Parliamentary Ombudsman.
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:
Tax Credit Office
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.
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.
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
Last reviewed 9 June 2016