Toothless HMRC Charter needs more bite, says CIOT

30 Jul 2020

Penalising HMRC for their failure to adhere to their own Charter obligations, including requiring them to financially compensate taxpayers where delays, inconvenience or additional costs have resulted, should be considered if the Charter is to be effective, says the Chartered Institute of Taxation (CIOT).

The CIOT’s suggestion is contained in its wide-ranging submission to a government review of the HMRC Charter. The Charter sets out the standards of behaviour and values that HMRC aspires to when interacting with taxpayers and vice-versa.1 HMRC began work to review the Charter in September 2019. The need for revision of the charter was highlighted in reports of both the House of Lords Economic Affairs Committee in December 2018 and the Independent Loan Charge Review in December 2019.

John Cullinane, CIOT Tax Policy Director, said:

“There appear to be few, if any, negative consequences for HMRC if they fail to meet their Charter obligations, and their performance targets. It is hard to see how these aspirations can be effective without sanctions. This is well understood as regards taxpayers - there can be significant negative consequences including interest and penalty charges if taxpayers fail to meet their general obligations to file tax returns and pay tax on time. If there is to be a true partnership between HMRC and its customers, as envisaged in the proposed Charter, both should accept that they may be appropriately penalised for their failures. In the case of HMRC, this should include being required to compensate financially their customers where delays, inconvenience or additional costs result.”

The impression that there is one rule for HMRC and another for taxpayers creates a sense of unfairness and is damaging to willing and effective compliance.

The CIOT’s submission states that the Institute does not support the proposed new Charter as currently drafted. John Cullinane explained:

“While the wording of the proposed updated Charter might be considered more ‘user-friendly’, it lacks the clarity and hence the authority of the existing Charter. Not only does the proposed wording appear to ‘lower the bar’ in terms of HMRC’s obligations, it excludes a number of key elements which are present within the existing Charter, such as commitments by HMRC to keep any costs to you at a minimum, and make sure that you are dealt with by people who have the right level of expertise.”

CIOT believes that the existing Charter, with a few modest updates, would provide a sound basis for the future and would set out adequately the values and principles of HMRC, and customers’ rights and obligations when dealing with HMRC. In particular, the CIOT favours the ‘two-way’ approach, setting out separately both HMRC’s obligations and those of its 'customers' (taxpayers).

CIOT is also calling for greater efforts to promote the Charter within both HMRC and the wider public. John Cullinane commented:

“We need greater awareness of the Charter. Some of the conduct we have seen suggests that some HMRC officers are not aware of, or are not implementing, the Charter behaviours – this needs addressing. Awareness among taxpayers also needs reinforcing, particularly among individuals and small businesses.”

The CIOT suggests that awareness of the Charter and its implementation could be gauged within HMRC’s Civil Service People Survey and their annual Individuals, Small Business and Agents Customer Surveys. The institute argues that HMRC’s performance measures should focus also on delivery of their Charter obligations, and could be measured through a variety of means such as Webchat feedback, Gov.UK customer feedback ratings, ‘cold’ reviews of a sample of interactions between HMRC and its customers, and the NAO could monitor and report on HMRC’s performance against its Charter as part of its audit of HMRC’s annual report and accounts.


1. HMRC’s Charter reflects a legal requirement under the Finance Act 2009. The legislation states that the Charter ‘must include standards of behaviour and values to which HMRC will aspire when dealing with people in the exercise of their functions’. Link.

HMRC began work to review the Charter in September 2019. Its ambition is for the revised Charter to set out more clearly the experience that it wants to deliver to its customers. This approach supports the recommendation made by the Loan Charge Review in December 2019 that HMRC’s Charter be reviewed ‘to set higher expectations of performance during interactions with members of the public and ensure that staff are offered training on how to deliver it’.

This Charter review also supports recommendations from the House of Lords Economic Affairs Committee report ‘The Powers of HMRC: Treating Taxpayers Fairly’ in December 2018. This report recommended that ‘the Charter is amended to clarify HMRC’s responsibilities towards unrepresented taxpayers including that issues are clearly set out, legislation is explained and rights to review and appeals are made accessible’.

2. CIOT’s submission on this consultation about HMRC's Charter is here.