HMRC Staff Get Financial Incentives ! Fact !
If you have asked anyone at HMRC if there are financial incentives and bonuses for HMRC staff you will always find it is flatly denied, at least officially as HMRC staff are not allowed to discuss it!
Various national papers have run articles in the past suggesting that HMRC staff have some form of financial incentive but as far as I know this is never formally being confirmed by HMRC in the past.
Freedom of information act request
Following a Freedom of information request for details of the bonuses, financial incentives and requirements for promotion made by a director of a Tax Publications Limited in 2011 we can now firm that it is indeed true that HMRC staff are incentivised by financial incentives, bonuses and that promotion is dependent on achieving targets.
HMRC Financial Appraisal System
HMRC’s reply to the Freedom of Information Act request confirms that there are for performance marks available in HMRC’s staff appraisal system.
These are, Top, Good, Improvement Needed and Formal Poor Performance.
In order to receive a performance award an employee at HMRC must achieve a”top performance” appraisal marking which is defined as follows:
“Across the year the employee has consistently delivered a high level of performance and behaviour which exceeded the required levels of performance set out in their business, HMRC behaviours or behaviours, skills and abilities framework and development objectives.”
HMRC also confirmed that:
“At the start of each performance appraisal year (April) managers meet with job holders to discuss and agree business and development objectives for the coming year and one of the core business objectives across HMRC is to “maximise revenue flows” which includes raising additional revenue from compliance interventions. Job holders performances against these objectives are assessed at midyear and end of year reviews and a performance marking is agreed”.
“Managers at HMRC use moderation and quality assurance to achieve a fair and consistent approach to performance appraisal across the Department. Moderation provides an assurance that managers:
Understand the standards against which they assess job holders
apply those standards consistently and accurately
ensure that HMRC’s equality and diversity principles are clearly embedded and delivered throughout the process.”
HMRC’s information supplied under the Freedom of Information Act also confirms:
“Guided distribution is designed to help managers spread performance appraisal marks for their team members fairly, across the available box marks and gives a guided expectation that:
- up to 15% are awarded “Top”
- 80% to 85% are awarded “Good”
- 5% awarded “Improvement Needed” and “Poor” combined.
Performance awards are paid as a percentage of the in please basic salary. The percentages for all awards for the last three years have been:
That means a grade 7 (grade 6 are paid even more) member of HMRC, Inspector level, on between £52,669 and £61,590 who can expect an annual incentive bonus of £1,549 a year.
This is on top of and separate to any annual pay rise!
As if the £61,590 was not already too high for the level of competence of many Inspectors show it totally beggars believe.
HMRC truly live in a world of their own.
HMRC apparently received more complaints than the banks in recent years! And just like the banks HMRC are awarding themselves bonuses for behaving badly.
Of course promotion is very unlikely unless you hit “Top” either.
So in conclusion next time you have an aggressive HMRC member of staff chasing tax you for tax you don’t even agree is legally due you know it is personal for them. Their pockets get lined if they can scare you into paying more. Is see this going on regularly.
Complaints about tax enquiry staff
HMRC were asked in the Freedom of Information Act request how many complaints are made about staff dealing with tax enquiries and HMRC confirmed that no separate records are kept of the number of complaints made about Inspectors behaviour during tax enquiries specifically.
However HMRC confirmed that according to their records in the 18 months from 1 April 2010 to 30 of September 2011 HMRC investigated 212 behaviour related complaints across their “compliance activity streams” which is where tax inspectors most commonly operate.
In 2010 HMRC received a total of 73,455 complaints. It is difficult to believe that there were only 212 complaints about HMRC staff behaviour in “compliance stream” work.
I personally have seen around 10 complaints in the past 18 months about the heavy handed tax enquiry approach by HMRC staff and I am just a small drop in the ocean of the world of tax. So that means I have seen not far off 5% of all the behaviour complaints. From less than a handful of accountants!
That is why I think HMRC’s complaints figures are a little less than honest, in the same way HMRC only confirmed the Financial Incentive structure within HMRC as they were forced to by the Freedom of Information Act. The vast majority of HMRC staff I questions of the existence of financial incentives flatly denied they existed.
Clearly HMRC staff are TOO ASHAMED to admit or they themselves understand the exceedingly bad light this shines on HMRC.
This is public servants at their very worst. Deception about very important facts.
To my mind this is as bad as the scandal about MP’s expenses. It does just feel sometimes as though public servants are primarily interested in lining their own pockets at the expense of members of the public. HMRC are at it too.
Maybe HMRC don’t want to keep the records as the real facts would be too unacceptable to the ordinary public?
So what is wrong with the financial incentive system at HMRC?
The fact that HMRC have confirmed that it is expected that managers will award a “top” performance award to up to 15% of their staff is a disgrace. Why set out expectation like that? What message is that sending?
It’s ridiculous frankly…
The fact that expected percentages outlined by senior management are that up to 85% of HMRC staff should be in the “good” performance category shows that the whole system is a complete farce.
As the stated key performance target for HMRC staff is to “maximise revenue flows” putting inspectors and staff dealing with tax enquiries in this incentivised situation. No wonder they so often behave so badly.
This is particularly wrong where taxpayers in the UK tax system are presumed ”guilty until they can prove themselves innocent” and given the extremely complex tax system and very burdensome, red tape system the UK has it is indeed clear why HMRC staff are extremely reluctant to admit that there is a financial incentive scheme in place at all.
HMRC should hold their heads in shame for not being prepared to formally admit it previously. A public disgrace. If HMRC were not ashamed and know the system is totally wrong they would never have been so keen to keep it quiet!
One HMRC senior management were keen to keep quiet. Thank goodness for the Freedom of Information Act. The FOIA is definitely in the public interest.
Details About HMRC Staff Wages
If you want to work out the % bonuses given to the 15% of HMRC in the “top” performance awards rating who got a 2.5% bonus for 2010 see salary levels at HMRC’s website at http://www.hmrc.gov.uk/jobs/salaries.htm
Freedom of Information Act Requests to HMRC
If you think there is information at HMRC that the general public has an interest in knowing see the HMRC’s FOI page for guidance about making your Freedom of Information Act request. http://www.hmrc.gov.uk/freedom/foi-index.htm
For HMRC transparency information http://www.hmrc.gov.uk/transparency/
If you make a complaint about an HMRC member of staff’s conduct during a tax enquiry we want to hear about it. Heavy handed, unreasonable behaviour by HMRC staff is totally unacceptable especially during tax enquiries where they cannot quote the tax law to back up their approach as they so often can’t.
Take Part in Our HMRC Staff Incentive Scheme – Survey