If you are owed a tax refund from 2017-18 don’t hold your breath; my daughter and several of my clients are still waiting for theirs even though their tax returns were submitted in early May. Others have been threatened with having their assets seized and bankruptcy.

In a shocking report, that is highly critical of HMRC and its approach towards taxpayers, the Economic Affairs Committee (EAC) of the House of Lords suggests that the government has added “disproportionate” powers to HMRC’s revenue raising toolbox to make up for the reduction in resources which has left it unable to ensure that taxpayers are treated fairly,.

And it calls on government to review HMRC’s oversight and powers, and ensure greater accountability and increased scrutiny of the department’s activities.

“Since 2012, due to reduced resources, HMRC has been granted some broad, disproportionate powers without effective taxpayer safeguards,” said EAC chair Lord Forsyth. This is particularly so, where lower income taxpayers are being targeted.

The report finds that HMRC’s behaviour towards taxpayers in general has been shocking.

“HMRC has recently been given greater powers,” the report says. “It is being asked by ministers to collect more tax with fewer staff. These cultural drivers have pressured staff to take a more aggressive approach to tax collection, and in doing so impaired the ability to be fair to taxpayers and act in accordance with Charter values.”

 “We were disturbed to hear accounts of HMRC threatening individuals with arrangements that could result in bankruptcy, where individuals clearly have no assets to settle liabilities,” the EAC adds. “Whether these threats were explicit or perceived, they have caused considerable anguish for a number of individuals.”

Among other recommendations, the committee suggests that it is time parliament rethinks the process for holding HMRC and the Treasury to account for the fair treatment of taxpayers. This might include an independent body to scrutinise HMRC’s operations.

It also recommends establishing a collaborative body – comprising civil servants, tax professionals and business organisations – to monitor the relationship between HMRC and the taxpayer, consider new proposals for legislation, including taxpayer safeguards, and oversee “the issues around HMRC culture and deteriorating customer service which have caused our witnesses concern”.

Since the comprehensive review of HMRC’s powers concluded in 2012, there has been a shift in the balance being in favour of more powers for HMRC which are not been matched by corresponding taxpayer safeguards.

Like many other accountants we continue to lobby government and HMRC, through the ICAEW, to improve the service we and our clients get from HMRC. Regrettably it falls on deaf ears particularly where small businesses and the self-employed are concerned.

Noel Guilford