HM Revenue and Customs

5. Mr A complains that HMRC mishandled his tax affairs relating to his travelling expenses claims.

6. Mr A also complains that there were significant delays in its handling of its claims and during the complaint process.

7. Mr A tells us he had sleepless nights as a result of getting told there would be fines. He also lost entitlement to a claim for 2015/16 and is having to deal with all the stress this has caused while caring for an ill wife. He tells us the delays just made things worse.

8. Mr A would like a detailed breakdown of the tax years 2016-2017 through to 2020-2021. He would also like to be reimbursed the monies he would have been entitled to had HMRC not prevented him from claiming. He would also like compensation for the impact on him of these events.

9. Mr A wrote to HMRC in January 2020 to ask for advice on how to claim tax relief on travelling expenses he incurred in his employment. Those expenses were incurred in the tax years 2016/17 and 2017/18. HMRC told Mr A he would need to fill in a P87 form for each year and send them to HMRC.

10. Mr A did so in June and July 2020. In late July 2020, HMRC wrote to him and explained it could not accept his claim as he had not provided evidence that he had incurred the expenses as part of his employment. Mr A provided further information in August 2020 but in September 2020 HMRC requested additional evidence which he provided later that month.

11. In November 2020, HMRC told Mr A that it was not able to accept his claim and that if he wished to challenge that decision he would need to complete a Self-Assessment Tax Return (SATR) for each of the two years. This is where the taxpayer submits a tax return to HMRC instead of or in addition to the employer doing so. Mr A wrote to HMRC on three more occasions to provide further information; November 2020, January, and March 2021.

12. HMRC told Mr A in May 2021 that, based on the additional information, he may be entitled to claim the tax relief, but he would still need to submit a SATR for each year. He did so in November 2021 and sought updates about the progress of his claim in February and April 2022 after not hearing anything from HMRC.

13. HMRC contacted Mr A on a number of occasions during 2022 to apologise for the delay in reviewing his claim and in January 2023 it wrote to him to confirm his claim had been accepted.

14. Mr A complained to HMRC in July 2022 about the delays and it responded in January 2023 at the first tier of its process. It acknowledged and apologised for the delays and offered a consolatory payment of £60. In early April 2023, Mr A asked for his complaint to be escalated to the second tier, and he received holding letters in April and June 2023 saying he would receive a full response as soon as possible. Mr A wrote again in July and September 2023 and again received a response to say that his complaint would be reviewed as soon as possible.

15. In early October 2023, HMRC provided a response to his complaint, apologising again for the delays and offering a further £50 consolatory payment. It also added that Mr A would not need to submit an SATR in the future due to a change of his circumstances and issued him a tax refund for the year 2021/22. HMRC also cancelled the late payment charges Mr A had accrued in the 2021/22 tax year.

16. Mr A brought his complaint to the Adjudicator’s Office (the AO) in April 2024 and received its response in August 2024. The AO partly upheld his complaint and asked HMRC to issue an additional consolatory payment of £100 for its delays in handling his expenses claims.

17. Mr A then brought his complaint to our Office.

Mishandled his tax affairs

18. Mr A complains HMRC did not properly process his 2016/17 and 2017/18 tax relief claims. He also says he is owed tax from HMRC for the period 2016/17 through to 2020/21 which includes his inability to make claims for expenses for the last two tax years of that period. Mr A also complains that he could not claim for the 2015/16 tax year.

19. When we consider a complaint that has been brought to us, we look to see that all the parts of that complaint were brought to and addressed in some way in the complaint handing process of the organisation complained about.

20. We can see that HMRC, and the AO addressed the part of the complaint about the handling of his tax relief claim for the years 2016/17 and 2017/18. The AO also commented on the later periods. We will look at the first two periods now and then review what was said about the rest later in this document.

21. While Mr A tells us he lost the opportunity to claim for 2015/16 we have not seen any mention of this in his complaint to HMRC. For us to look at this further, he would need to have filed a claim for that period by the end of March 2020 which he did not. As Mr A has not completed the complaint process for this part of his complaint, we cannot look at it further.

22. When Mr A asked for advice on submitting his expenses claim in January 2020, HMRC explained to him that he should submit a P87 Form. This was for the 2016/17 and 2017/18 tax years.

23. The Employment Income Manual (EIM) Section 31700 says:

• If an employee considers that an expense is deductible it should be entered on their SA Return in the appropriate boxes on the employment pages.

• If the employee has not received an SA Return they can request a deduction for expenses from HMRC. See ‘Claim Income Tax relief for your employment expenses’ (P87).

24. HMRC acted in line with the EIM when it told Mr A to complete a P87 from for each year he was claiming expenses.

25. The P87 claim information at the time said:

You can make a claim (using this form) if:

• your claim is within 4 years from the end of the tax year you are claiming for • your total expenses claim for each tax year is £1,000 or less (£2500 if professional fees) — if the amount is more than £1,000, you need to fill in a Self-Assessment tax return • you have paid tax in the year you are claiming for

26. We can see in the background that Mr A submitted a P87 for 2016/17 and 2017/18 and then added additional information when HMRC sought it. HMRC initially said the tax relief being claimed included an ‘unreasonable estimation of the expenses incurred’ and suggested a SATR would be the best way to challenge that. It also allowed Mr A to provide more detail about the claimed expenses. The amounts were more than £1000 (over £2000) so HMRC were acting in line with the Claim Guidance when it requested the SATR.

27. We appreciate that the need to submit expanses claims and fill in SATR forms was a new experience for Mr A. We know from what he has told us that the process caused him frustration and at times distress when he thought his claims may not be paid. We are sorry to hear that was the case.

28. The evidence shows that HMRC followed the appropriate Guidance when considering Mr A’s claim for expenses for the years 2017/17 and 2017/18. We will not take any further action on this part of the complaint.

Delays in claim handling and complaint correspondence

29. Mr A followed the directions given to him by HMRC and submitted two SATR’s in November 2021. His claims were not reviewed or a decision reached until January 2023. We have seen that Mr A sought updates and complained about the delay during this 13-month period.

30. The AO stated in its report that Mr A was given timescales in which he could expect the review to take place, and these were not met.

31. The HMRC Charter says:

Being responsive

When you get in touch with us, we’ll make sure that the people you deal with have the right level of expertise. We’ll answer your questions and resolve things first time, or as quickly as we can. We’ll also explain what happens next and when you can expect a response from us.

32. HMRC failed to meet its commitment under its Charter.

33. Mr A complained to HMRC in late July 2022 and did not receive a response to that complaint until mid-January 2023. This is five months allowing for the holiday period. He then escalated his complaint to the second tier when he wrote in early April 2023 and, despite sending follow-up letters, he did not receive a response until the beginning of October 2023. This is five months.

34. The AO said that it considered these delays to be unreasonable and poor complaint handling by HMRC. We can see how these delays may have contributed to the stress Mr A experienced during this time. This must have been difficult for him.

35. When HMRC acknowledges it has not met the standards expected of it, it refers to its Complaints and Remedy Guidance (the CRG). In CRG6125, HMRC acknowledges that:

Sometimes our unreasonable delays can cause worry and distress to our customers.

36. CRG6075 looks at providing a financial remedy for the distress HMRC may have caused a customer. It says:

Our payments for worry and distress are meant to be a token - a way of acknowledging that our mistakes and delays have affected someone badly. They are not akin to damages and payment does not, in any way, amount to an admission of any legal liability. The payments will usually range between £25 and £500, but experience shows that the vast majority of payments are at the lower end of this range.

37. In its complaint responses, HMRC offered Mr A a combined consolatory payment of £110 for the delays in the complaint process. This is in line with CRG6075.

38. HMRC did not however acknowledge the impact of how long it took to process Mr A’s claims for expenses. The AO considered this in its investigation and reached a decision that HMRC should pay Mr A an additional £100 to acknowledge the distress he experienced at having to wait 13 months for his claim to be processed.

39. This too is in line with CRG6075.

40. We can see the financial remedy of £210 and apology HMRC provided is in line with the guidance mentioned above and, as such, we will take no further action on this aspect of the complaint.

The matters we cannot consider

41. Mr A told us that HMRC prevented him from claiming expenses for this period 2018/19 to 2020/21 and from verifying his tax position which he says differed from that which HMRC held.

42. This issue was raised with the AO during its investigation. It was not raised with HMRC in the original complaint. We have also not seen that Mr A submitted any P87 claims or SATR returns for the expenses he incurred in the above years. The rules changed in September 2023 to allow for any expenses to be claimed up to £2500 per year so he may well have been able to make a postal claim without the need for an SATR for the years 2019/20 and 2020/21.

43. In respect of his current tax position, the AO said in its report:

As of the date of this letter HMRC records shows that Mr Burke has no outstanding tax liabilities in PAYE or SA. However, if you (Mr A’s representative) or Mr A have any further questions regarding his tax position or claim for tax relief you can contact HMRC directly on 03000 123 456.

44. Mr A’s representative told us that she and Mr A had tried on multiple occasions to get answers to several questions about his tax position. While we can appreciate the frustration this will cause Mr A, given HMRC has not had an opportunity to address any remaining concerns he may have we are not able to consider it here. Therefore, we will take any further action.

1. We have carefully considered Mr A’s complaint about HM Revenue and Customs (HMRC). We are sorry to hear of the difficulties he has experienced in relation to Tax claims and the subsequent delays in the complaint process. He told his representative that he found dealing with HMRC about this matter to be confusing. We have seen from the evidence that he would have been used to his tax affairs being dealt with in the more typical Pay As You Earn (PAYE) approach where tax is handled by the employer and HMRC. The added complication of claiming back expenses was not something he was familiar with. We can see from the information he has shared with us that these matters have caused him frustration and distress, and we are sorry to hear that is the case.

2. We have considered the evidence available to us and can see that HMRC followed its guidance when it told him to submit the necessary forms with his evidence. The additional steps it took to process his expenses claims were also in line with its guidance and therefore there is no indication maladministration in how HMRC processed Mr A’s claims for the tax years 2016/17 and 2017/18.

3. The evidence also shows that HMRC was responsible for delays in its handling of Mrs A’s claims as well as in the complaints process. We note it has recognised these shortcomings in its service and offered a financial remedy of £210 and an apology to put right the impact these had on Mr A. We cannot give a view on some of the matters Mr A raised with us as HMRC has not yet considered them and it needs to do so before he brings them to our Office.

4. Having thought about the steps HMRC has taken on the matters we are able to consider, we can see it has taken appropriate action to put right the impact caused by its mistakes so we will take no further action. We explain in more detail below how we reached this decision.