For many of HMRC's 'customers' who have spent more than 30 minutes trying to get through on the phone, the thought of making a formal complaint to someone about the service may seem attractive, especially if some recompense may be forthcoming. There is someone to contact but unfortunately their remit is restricted to specific cases.

HMRC operates a two-tier complaints system. The first tier involves the taxpayer lodging a complaint with HMRC's own internal process. After a decision has been made, if the taxpayer feels their complaint has not been handled correctly or satisfactorily, they can escalate it to a second tier. Tier two is HMRC’s final review and will be conducted by a different review handler. If the taxpayer is still dissatisfied after the second review the next and final stage is to ask for an independent review by the Adjudicators Office (AO).

The role of the Adjudicator’s Office

The AO is an independent body that provides an impartial and independent review of complaints that have already been through the internal complaints process of the department involved. Being independent, the AO cannot enforce decisions – it can only make recommendations to resolve disputes, such as apologies, financial redress or process changes. The AO’s role is not to review or alter decisions made by the relevant government department but rather to assess whether that department has handled the complaint ‘appropriately and given a reasonable decision’ in line with its policies and procedures.

The AO can only consider and rule on specific types of complaints, namely:

· ‘mistakes’;

· unreasonable delays;

· poor and misleading advice;

· processes;

· inappropriate staff behaviour;

· whether a policy has been followed; and

· the correct use of ‘discretion’.

If a complaint involves HMRC’s use of discretion, the Adjudicator will evaluate the process concerning that discretion and whether the judgement reached was reasonable. The Adjudicator is not allowed to substitute their judgement for a reasonable judgement reached by HMRC.

The complaints process

Any complaint must first be made to the relevant government agency before the case can be transferred to the AO. A first and second review from HMRC must have been made before it can be transferred to the AO. The AO typically accepts complaints up to six months after the second review by HMRC. Once it reaches the AO, the review process usually takes around three to six months to complete, although this timeframe may vary based on the complexity of the case and the volume of complaints being processed. It is important to note that it may take many months of phone calls, letters and interactions with the relevant HMRC department to reach this stage.

The AO's 2023/24 annual report indicates that, for the financial year 2023/24, it received 1,046 complaints concerning HMRC, an increase from 950 the previous year. It upheld 41% of these complaints either fully or partially, a decrease from the previous year’s rate of 47%.

Ruling on compensation

If a case is reviewed by the AO and determines in the claimant's favour, it has the authority to recommend awards compensation should they rule that the claimant has lost money or experienced anxiety or distress due to HMRC's error or delay. The AO annual report states that it recommended redress payments of £103,063 for the 2023/24 year. The most recent information available shows that in the 2022/23 financial year, HMRC paid out a total of £718,000 in compensation to taxpayers, distributed amongst 4,742 individuals who had lodged complaints regarding delays and poor service. The average compensation was £136, with those escalating their complaints receiving an average of £371.