Examination of Witnesses (Questions 100
WEDNESDAY 6 MARCH 2002
100. Because there is a worry about alarming
the elderly and the less well off?
(Mr Banyard) I am told, no.
101. You are told you do not analyse it?
(Mr Banyard) I am told we do not.
Mr Mudie: It would be a good thing for
you to analyse, would it not?
102. Would you like to answer that; would it
be a good thing for you to analyse it?
(Mr Banyard) If we could, we would, yes.
Mr Mudie: What do you mean, if you could?
Chairman: Are you saying you cannot?
103. Of course you can analyse it. If you put
people in groups and you can tell me there are 1½ million
pensioners, you can decide how many pensioners get penalty notices
and then you can compare it with the other groups?
(Mr Banyard) Do you want to respond, on that?
(Mr Smith) Yes, if I could. When the people we charge
penalties, those first penalties, are the same as the people who
file their returns late, I think Stephen Banyard said earlier,
in large measure, we know who they are, we have identified the
groups that are most prone to late filing. We do not understand
the reasons for them filing late at the moment. We have just recently
kicked off some qualitative behavioural research.
104. No, the point I am trying to make, just
a minor point, but if 700,000 of those were going to elderly people,
you would say, "Well, I think we should look at the form,
because it is obviously catching them out, there are reasons why
the elderly are not responding." That is what some of the
evidence given to us has raised?
(Mr Smith) I am sorry, if I could just answer that;
the groups, pensioners are not likely to be in that group, they
are not a large population in the group of late filers. We know
predominantly who the late filers are, as Stephen said, they are
people who have just started in business, they are people who
had ceased in business the previous year, they are people with
substantial income for the year before, and those are the groups,
we have identified them. So the late filer populations, essentially,
are the same as the populations of people whom we charge penalties,
we believe. So I think you have that information, and we can look
Mr Mudie: I would still like you to do
a bit of analysis to see what is happening?
105. Would you see if that is possible?
(Mr Banyard) Yes.
106. Picking up from where my colleague Mr Mudie
left off, people do not now have a single named individual who
deals with their affairs, which obviously only a small minority
of taxpayers used to have but now none of them have. Do you think
that has reduced your service to the public?
(Mr Banyard) The vast majority of our customers, we
believe, are seeing a better service, and this is coming through
in our customer research. We cannot really operate any more on
the past pattern of having a single person, and, as you said,
a lot of people did not have a single person anyway. There are
a number of reasons for this. One is that we cover more subjects,
we cover tax, we cover credits, we cover NICs . Research that
we have done shows that we provide a better service if we specialise,
and that also enables us to be more efficient, so we can redeploy
staff to the front line in customer service and compliance. So,
for example, we have grouped our offices together, we have set
up telephone units and contact centres, and one of the things
they offer is a longer-hours service at the contact centre, which
people are asking us for. Most of the queries we have got can
be dealt with in one go, and we target our contact centres not
to complete the call as quickly as they can but actually to complete
the transaction with the person who is calling in, and actually
to round off the job; even if there is a repeat call, our IT systems
carry the record of the previous conversation. And I have sat
in our East Kilbride centre, for example, recently, and watched
people picking up a second call, and I think it is fair to say
that the person who was calling in was well served, there was
good continuity. The one thing I would say is that there are some
cases which are intricate or complicated, where we have written
out, or where someone has written in, where there is a need for
an ongoing dialogue, and in those cases we do give a direct dialling
number, and that person will come in to the same person, or to
the same team, that is dealing with those cases.
107. That is very helpful. Just pursuing this
point about pensioners, I think you said there were at present
1.2 million pensioners?
(Mr Banyard) We estimate that.
108. Who are in the Self-Assessment system;
now clearly that number is going to rise each year, as pensioners
have rather more complex sources of income, and, with pension
credit, the numbers could go up quite considerably. How many pensioners
do you think will be in the Self-Assessment system post pension
credit, which is only 12 months away now, assuming, of course,
we give the Government the legislation?
(Mr Banyard) I do not have an estimate of that with
me, and I doubt whether I have got one behind me either; no, we
do not have an estimate of that with us.
109. But clearly it would be substantially more
than the numbers you are dealing with now?
(Mr Banyard) I am not sure that it would be, because,
in any case, as I said, we are looking at Self-Assessment to see
whether we can make it easier for people, certainly to make it
easier for them to assess, or to take them out altogether, in
110. Perhaps it would be helpful if you could
supply a bit of information about that?
(Mr Banyard) Yes.
111. Some people say that the statement of account
is not very easy to understand. I must admit, I did have a bit
of a heart flutter when I got mine this year, because I misread
a refund as a request for payment.
(Mr Banyard) Was it a refund?
112. Yes. I do not want to discourage you though.
The statement of account?
(Mr Banyard) I think it is fair to say that the statement
was the cause of a lot of concern when Self-Assessment was introduced,
and we have worked with customer groups and agents to see if we
can improve it. We have made improvements. A big change was in
June 2000, when we introduced something called Dynamic Document
Composition, which is new software that allows us to pull information
more easily out of the Self-Assessment system and then to present
it in a way that is easier for people to use. So the most recent
statements are much more usable, and our customers and agents
have said they are a big improvement. I would not want you to
think we are complacent about this, and we are looking to make
further improvements in the statement as we talk to our customers.
113. I ought to say, I have been advised there
may be a division shortly, so I am going to rattle off a few things,
accepting that it may be necessary, some of them are factual,
and it may be more convenient for you to give the information
in a different form at a later date, if that is alright. First
of all, how many enquiries do you undertake each year, has the
coverage changed and what proportion of returns is selected randomly
(Mr Banyard) I can deal with those. In Income Tax
Self-Assessment, last year, 2000-01, we did 42,662 what we call
full enquiries, which is where we look at the books, records and
underlying documents behind an account. We did a further 65,000
aspect enquiries, where we look at a particular aspect of the
account, perhaps one feature in the accounts; and, in addition,
we looked at 259,000 non-business aspects in the returns, for
example, capital gains, expenses statements, and things like that.
The coverage has stayed broadly steady in the last few years.
And your third question was random enquiries; we do about 7,000
random enquiries, which is 0.1 per cent of the population as a
114. We have had evidence from PCS, you will
be familiar with PCS, that, in fact, coverage has reduced from
5 per cent to 2; so you would dispute that, coverage of enquiries?
(Mr Banyard) I do not recall that, for Income Tax
Self-Assessment, the coverage has ever been 5 per cent; it has
declined gradually over the last 10 years, but it has been steady
in the last two or three years, at about
115. Perhaps you could look into that and give
us the information and check that out?
(Mr Banyard) We can give you the figures.
116. PCS also suggest that some offices have
been encouraged to throw files away, in order to save accommodation
costs; is that correct?
(Mr Banyard) No. No offices have thrown files away,
but what we are doing is looking at our policy for keeping files
and whether we need them in the building or whether we put them
into storage accommodation elsewhere, because, increasingly, the
tax record is held on computer.
117. They also suggest that, in some areas,
casual staff, of which there seem to be quite large numbers, do
process Self-Assessment returns; could that be right?
(Mr Banyard) We have very few casual staff. No staff
should process SA tax returns without receiving the proper training
to capture the returns. People receive initial training, they
receive training on the desk, from their managers, they have got
mentoring and peer support. We take Self-Assessment tax return
capture very seriously, it is one of the areas we target for accuracy,
we have been pushing the accuracy up, in the last couple of years,
and the indications are it will go up again this year.
118. So you would completely refute the idea
that casual staff could be assessing Self-Assessment returns?
(Mr Banyard) They will not be assessing; there may
be cases where casual staff who have been trained are capturing
tax returns, but they will be doing it under a closely managed
condition. But the overwhelming majority of Self-Assessment tax
returns are captured by permanent staff, at E1 grade.
119. Now how much tax do you recover, as a result
of this compliance work; I am, here again, talking about Income
(Mr Banyard) In the year 2000-01, we recovered from
Income Tax Self-Assessment £406 million, from our enquiries,
and from the Corporation Tax Self-Assessment, the people in local
offices, for whom I am responsible, achieved an additional £511
million, and Stephen Jones, who is responsible for the Large Business
Office . . .
(Mr Jones) The people in the Large Business Office
generated a yield of £2,142 million from enquiry work on
large business cases in 2000-01.
120. Mr Banyard, we have to leave it there.
I will not say "saved by the bell", but there were a
couple of other points. You have undertaken today, very kindly,
to supply some further information at various points to the Committee.
We look forward to receiving that. There may be some other matters
on which we may wish to communicate with you again, not least
Corporation Tax Self-Assessment, which we have not been able to
touch on today.
(Mr Banyard) We would be happy to try to help the
Chairman: Can I thank you and your colleagues
very much for attending.
9 See Ev 23, para 5. Back
See Ev 24, para 6. Back
See Ev 24, para 7. Back