By Claire West
HM Revenue and Customs have announced that as part of the drive to save costs they plan to stop issuing copies to tax agents of some mail which is sent to their clients.
While supportive of the need to make cuts in Government spending, the Chartered Institute of Taxation (CIOT) is extremely concerned that this measure will result in far more additional work for HMRC, taxpayers and their agents and potentially lead to additional costs in excess of the amounts saved.
CIOT Deputy President Anthony Thomas said:
"This is a seriously short-sighted move from the Revenue.
"Everybody recognises that there is pressure on all government departments to find savings wherever they can. But by keeping tax agents less well-informed about their clients' tax obligations HMRC are likely to find they lose more money than they save.
"HMRC estimate that not sending copies of PAYE coding notices (P2s) and tax calculations (P800s) will save them £1.25 million. But they have not estimated the cost of dealing with an increased number of enquiries from agents, let alone that of dealing with the higher number of erroneous tax returns which is likely to result.
"It is particularly disappointing that this change is being sprung on taxpayers and their agents with more or less immediate effect and without consultation.
"We are calling on HMRC to reverse this short-sighted decision or at least halt it for proper consultation.
"If they are set on proceeding, then much more effort will need to be put into telling all taxpayers about the changes. At the moment all that is planned is a message on letters from HMRC to taxpayers, but if the taxpayer doesn't read letters obviously from HMRC (which is not uncommon, on the basis that they leave that to their agent) they will not see the message on the letter telling them to show it to their agent.
"Given that the vast majority of the costs involved in sending this information to agents come from paper, printing and postage, a consultation could also look at whether sending the information by email offers a possible cheaper alternative to sending it by post."