Large businesses say high staff turnover damaging HMRC relationships

The high turnover rate among HMRC customer relationship managers (CRMs) - the key intermediaries between clients and tax officials - means some large businesses feel their relationship with the tax authority has deteriorated over the past year

The latest HMRC Large Business Survey (LBS) found that overall, satisfaction rates among this group remained high, with 82% describing their overall experience of dealing with HMRC as ‘fairly good’ or ‘very good’. Almost a third (30%) of businesses said their experience was ‘very good’.

However, some large businesses said that their relationship with HMRC had deteriorated in the previous 12 months (even if they generally were positive about the overall service).

The LBS looked at the drivers behind these responses, which suggested businesses that had had contact with their CRM were more likely to rate their overall experience ‘very good’ (31%) than those who had no contact with their CRM (19%).

Individual responses highlighted a high turnover of CRMs in recent year. A number of large businesses perceived CRMs to be inexperienced and felt that this undermined their ability to resolve uncertainty.

The LBS says this was particularly perceived to be an issue where there had been a high attrition rate of CRMs – it was felt this undermined the CRM’s ability to develop a good understanding of the business. A number of businesses also felt that recent CRMs were less likely to have any experience in or an understanding of the specific sector in which the business operated.

Some large businesses felt that this inexperience coupled with the perceived increased centralisation of HMRC meant that their CRM did not have the authority needed to deliver certainty in a timely manner. Further, some felt that the role of CRMs had changed to focus more on administration, thus removing their ability to make decisions.

In addition, some large businesses felt that it was increasingly difficult to make contact with HMRC due to changes to communication channels (particularly the introduction of the mailbox service) – which are perceived to have negatively impacted on working relationships and the timeliness of response.

While 84% of respondents felt HMRC treated them fairly and sought to establish a co-operative relationship and that CRMs dealt with queries effectively, just 59% felt there was good co-ordination across the HMRC.

The HMRC Large Business Survey 2015 is here.

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I have seen lots of examples of this recently where CRM's (and their team - thereby losing all knowledge of the business) change, the CRM does not appear to have any influence and is merely the puppet in charge, via different mangers, of coordinating the audit teams. Ironically I have even seen CRM's being told that he cannot influence the audit and the audit team are fully in control. The lack of sector experience is also apparent. One thing which can also create a difference in treatment is which tax stream the CRM has a background in. If it is VAT they have a different (better) way of handling relations, compared to Direct Tax background CRM's who often have absolutely no knowledge of VAT (which can be the biggest tax stream and risk area) or other taxes outside of their background. HMRC do not seem to have any plans to deal with any of these issues, MTD will not improve the situation for those businesses who are under LBS.