P&R denies ‘chronic failure’ in tax system
Policy & Resources has rejected the suggestion that there has been ‘chronic failure and inability to manage’ the revenue service.
The top committee was responding to Rule 14 questions submitted by former Treasury lead Mark Helyar, and said that the long-standing backlog of income tax assessments required support and strengthening of resources, not ‘drastic and reactive changes in personnel’.
It is hoped that service improvements, such as paper returns and automatic assessments, additional resources and the shortening of the filing deadline to 30 November, would help address the backlog more quickly.
Revised assessment targets will be considered once the new IT systems are embedded.
Following P&R vice-president Heidi Soulsby expressing ‘the difficult cash position’ of the States, Deputy Helyar asked if P&R would press for more challenging reporting deadlines in tax procession and collection.
‘While we may accrue for income such as Pillar 2, this would do nothing to replenish the reserves that would be reduced if the income tax proposition was not accepted,’ P&R said.
‘It is important to note that the backlog has been around for many years and was exacerbated by the changes to normal working life caused by the Covid pandemic. The Revenue Service continues to focus efforts on processing the backlog of tax returns.’
About half of 2022 returns and a quarter of 2021 returns still need to be processed or have outstanding queries.
But the questions also revealed that many islanders leave it late to submit their returns. About 60% of 2022 personal returns were received in January and February 2023, right before the deadline, meaning they would be processed later.
Ongoing resource pressures and recruitment difficulties, exacerbated by the criticism of the service are said to have made things more difficult for the Revenue Service.
Deputy Helyar was grateful for the detailed response.
‘What the numbers demonstrate is that we do not actually know how much money the States may be owed until all forms are processed, at a time when we desperately need it,’ he said. ‘It also demonstrates that the service’s ability to process this vital data in good time falls well below any reasonable measure of performance. I expect there to be significant improvement and will continue to press for it.’
