HL Deb 05 December 1994 vol 559 cc790-3

2.48 p.m.

Lord Boyd-Carpenter asked Her Majesty's Government:

Whether the payment of income tax should be made more convenient for the taxpayer by ensuring that the offices from which the Inland Revenue collect it are located closer to the taxpayer's place of residence.

The Parliamentary Under-Secretary, Ministry of Defence (Lord Henley)

My Lords, the Inland Revenue maintains an extensive network of local offices. This is at present being restructured to reduce costs and improve services.

Lord Boyd-Carpenter

My Lords, I thank my noble friend for that somewhat platitudinous reply. Is he aware that some of us who live in London and in the south of England have found our tax affairs transferred to Inland Revenue offices in such places as Walsall, with payments sometimes having to be made to Glasgow? It is an extraordinary inconvenience if one wishes to discuss one's tax affairs with the responsible office. Why is it necessary to transfer the tax affairs of people in the south of England to Walsall?

Lord Henley

My Lords, I start by saying that there is nothing wrong with Walsall. I can assure my noble friend that again it matters little where the payment of taxes is made, because I believe that there is probably a letterbox not far from him. However, I understand the problem that he sets out. What I can say is that most self-employed people—and they are the ones who usually have the most complex tax affairs—will be dealt with by the office nearest to their own business. That is important for them.

I appreciate that those—and for all I know, my noble friend might be one of them—who are termed "multi-sourced" and who have various different sources of income might be dealt with by a number of different offices. I can tell my noble friend that there are historical reasons for this, but the Inland Revenue recognises that it can be confusing and can provide a poor service. As a result of restructuring, we hope that from April 1997 most people will deal with only one office in respect of all their sources of income. With the new technology being introduced, they will be able to deal with an office near them which will be able to access their own records, even if those are dealt with by another office.

Lord Bruce of Donington

My Lords, is the Minister aware that, contrary to popular supposition, local inspectors of taxes—as distinct from collectors of taxes—prove extremely co-operative when taxpayers call at the offices to discuss their tax affairs so that they do not have to incur the expense of going to accountants? Will the noble Lord therefore ensure that the service provided locally by inspectors of taxes is not reduced to the point where it becomes almost impossible for local people to make the appropriate tax inquiries in order to clarify their taxation problems?

Lord Henley

My Lords, I am grateful to the noble Lord for paying tribute to the service that is provided by many local offices. I think that the noble Lord deserves credit for not taking the opportunity to advertise his own profession—accountancy. I shall certainly take note of what he has said and I can confirm that so far as possible we would like to be able to provide the appropriate local advice from appropriately qualified local inspectors.

Lord Peston

My Lords, I hasten to add my words of support on what a good job the Inland Revenue is doing, particularly the inspectors. Can the noble Lord tell me what kind of people visit tax offices? I have been paying income tax for about 40 years. When I have problems, I ring up the inspectors; when they have problems, they write to me and I send them a cheque. It has never occurred to me to visit them. Is there any indication of what fraction of the tax-paying public makes use of the excellent service to which my noble friend referred? Is it usual and is it to be encouraged?

Lord Henley

My Lords, I think that it depends very much on the nature of the sources of income and the complexity of the matters of the individual. It may be that many self-employed people, particularly in small businesses, who do not wish to employ an accountant but find the whole process of self-assessment, or whatever it is, over-complicated, might prefer to make use of the advice that they can get from the tax office. They might therefore prefer to make a personal call. Certainly, the Inland Revenue can cope with that and will continue to provide that service. I cannot give figures as to what percentage of taxpayers like to call on the local tax inspector and make his acquaintance, but I shall certainly look into the matter. If I can provide the figures for the noble Lord, I shall do so.

Lord Monson

My Lords, will the noble Lord agree that it is a disgrace that taxpayers now have officially to be discouraged from posting cheques to the Inland Revenue because so many cheques are apparently stolen and the payee's name altered? Will the Minister agree that, in the absence of a repeat of the Great Train Robbery, there are only two places where the thefts can take place? The first is the Post Office and the second is the Inland Revenue itself. Can the noble Lord say what action is being taken to track down those responsible?

Lord Henley

My Lords, I cannot answer the noble Lord's question, but what I can say is that it is still possible for the noble Lord to pay his taxes by post. The Inland Revenue has no objection to him doing so. If he wishes to continue to pay by post, he may, but there are other means by which he can pay his taxes.

Baroness David

My Lords, may I say how helpful it is that I can include my income tax payments with my other bills and pay them all at the bank in one go? It is very simple, I get an envelope marked "free", with a first-class stamp on it, and it is sent to Glasgow. It is much more convenient and I am grateful that one is able to do that at one's local bank.

Lord Henley

Again, my Lords, I think that the Inland Revenue will note what the noble Baroness said and be grateful for her tribute to the services which it offers.

The Countess of Mar

My Lords, the noble Lord might be interested to know that I have had cause to call on my local tax inspector on my husband's behalf and I was dealt with politely. Is there any way in which the two systems of computers which the Inland Revenue has—in other words, the computers which make the assessments and those which make the demands for payment—could be made to talk to each other? Then one will not be asked for a payment and be given a refund about two weeks later.

Lord Henley

My Lords, I shall certainly make inquiries about the latter point, which I am afraid I cannot answer immediately at the Dispatch Box. As regards the first point which the noble Countess made, I am sure that the noble Lord, Lord Peston, noted that at least one Member of this House visits the local tax office.

Lord McIntosh of Haringey

My Lords, can the Minister say whether any progress is being made in the Inland Revenue on encouraging the instruction of taxpayers in completing their forms? I think in particular of the possibilities of interactive CD-ROMs or interactive videos which would be even more helpful than trying to deal with problems after they have arisen.

Lord Henley

My Lords, as regards new IT of that sort, I am afraid that I cannot answer the noble Lord's specific point. However, I shall certainly make inquiries as to whether greater progress has been made. I can assure the noble Lord that the Inland Revenue is committed to providing the best possible service it can to those who pay it tax.

Lord Boyd-Carpenter

My Lords, does my noble friend's supplementary answer mean that in 1997 responsibility for dealing with taxpayers who live in the south of England will be transferred back from Walsall to an office in the south of England?

Lord Henley

No, my Lords. What I said is that from that date most people will deal with only one office, particularly those who are multi-sourced. It might still be the Walsall office that deals with my noble friend's taxation, but a local office will be able to deal with him when he goes to make inquiries. By means of the new technology which is being introduced, my noble friend's records and papers will be accessed by a tax inspector in an office near my noble friend.

Lord Mackie of Benshie

My Lords, is the Minister aware that I have had much to do with tax inspectors? They have always been polite to me and invariably I have come off worst. Will the noble Lord assure us that the Government are not paying tax inspectors by results on the way to tax farming?

Lord Henley

My Lords, I can assure the noble Lord that there is no tax farming.

Lord Barnett

My Lords, perhaps I should declare an interest. I received a tiny perk for having recently opened a tax office in Manchester. Is it a coincidence that many bills from the Inland Revenue arrive just before Christmas?

Lord Henley

My Lords, I think that that is in the nature of things and I can assure the noble Lord that it is a coincidence.