How taxman ignored 10,000 claims

An investigation by Jobs & Money has revealed that managers in one of the country's biggest tax offices resorted to dumping thousands of unread letters in a desperate effort to reach targets for processing tax credit forms.

This week, the Inland Revenue confirmed the validity of internal documents disclosed to Jobs & Money by staff at one of the Revenue's tax offices on the outskirts of Liverpool. They reveal why some taxpayers have had to wait as long as nine months for a reply to queries about their tax credit applications.

The documents show that managers at the Revenue's Sefton office, in Bootle, told staff last December to "file" nearly 10,000 letters. The letters were bundled, locked away in several filing cabinets and forgotten, say staff.

At the time, the letters had already been lying around for more than a month. The only reason officials would retrieve filed letters, staff say, would be if taxpayers had contacted the Revenue again to find out what was going on.

A spokesman for the Revenue concedes that the letters were filed away, but says officials have been digging them out since January. He says the backlog was cleared this week when the last of the 9,500 filed letters received a response.

"We would like to apologise to those people who have only just received a reply to their letter. It is not the policy of the Revenue to file letters. We are doing all that we can to catch up with the heavy workload," he says.

He argued that some of the correspondence was internal and all of it had been assessed to check it was not urgent. However staff deny that the post was thoroughly checked before it was filed.

Staff also say the situation has worsened since January and the backlog has only been cleared following a decision to delay responses to other correspondence, including self-assessment tax returns.

Last week, Liberal Democrat pensions spokesman Steve Webb accused the government of sitting on a mountain of unread and unprocessed tax returns in its Bootle offices. The accusation, in a debate in the House of Commons, was immediately denied by the Paymaster General, Dawn Primarolo.

Yet last month, minutes of meetings between managers at the Sefton office, which deals with two million taxpayers, reveal that staff were grappling with 30,000 items of post, most of which had not received an answer within the Revenue's stated "15-day service commitment". More than 10,000 items of post had been sitting in the in-tray for more than 40 days lying unanswered.

There is little incentive for managers to deal with post once it has been unprocessed for more than 40 days. They are rewarded for the proportion of post that is answered within 15 days - the Revenue's main measure of its success.

Managers will attempt to deal with post which is more than 15 days old in order to avoid the potential for compensation claims. Taxpayers can claim compensation from the Revenue if it fails to reply within 40 days, but there is no incentive after 40 days. For this reason, staff are redeployed to answer more recent post and ignore letters that are more than 40 days old.

One member of staff at the Sefton office, who asked to remain anonymous, said managers had pushed staff to work overtime and weekends to break the backlog, but even this wasn't enough and left staff feeling bitter and angry.

Graham Steel of the PCS union, says the Sefton office is the worst hit, but there are many other offices handling post that is more than 40 days old. He said the union was negotiating with Revenue officials for more resources and a review of the current system of targets.

"Some targets must be met by the end of the year, but are unachievable. We need more resources and to review whether we need to meet some targets. Surely putting extra effort into catching tax evaders is more important," he says.

A loser in the waiting game

More than two million calls over a five-month period to the Inland Revenue's dedicated tax credit helpline were abandoned before claimants could speak to call centre staff, the Liberal Democrats revealed this week.

The calls were abandoned after they had been "received but not handled", says spokesman Steve Webb MP. Worse still, he points out, the caller had to pay for the privilege.

"The helpline number was not a free service. The people, who were left hanging on the line, had to pay for the privilege," he says.

Jobs & Money reader Danielle Wykes (left) has been calling the tax credit helpline for four months with no joy. This week she phoned only to be told that the line was busy and to ring another time. She wasn't given the option of talking to call centre staff.

Ms Wykes was told in April that she would receive £120 a week tax credits to help her pay £500 a month childcare bills. Within a week she was sent a second letter telling her the award would be £40 a week. When her payments eventually arrived, she was paid the lower figure.

"I have thought about writing, but you suspect they are too busy to deal with letters as well as phone calls," she says.