An experiment with the privatisation of decision making in tax credits appears to be in tatters after HMRC ended its contract with Concentrix (the private company contracted to investigate the correctness of tax credit awards) early. But where does this leave advisers with cases opened by Concentrix, and does it mean we should expect any improvement in the quality of administration and decision making? Mark Willis investigates.
Concentrix is no longer handling any tax credits cases, as HMRC ended the contract early and took all cases back in-house from the end of October 2016. However, 250 Concentrix staff in the Belfast call centre who were facing redundancy have been transferred to HMRC, and ‘received further training and support to help HMRC strike the right balance in ensuring good customer service and bearing down on error and fraud in the tax credits system’.1">www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/pressreleases/hmrc-and-con...
So although Concentrix is no longer handling cases, advisers may find that they speaking to the same person who they were unable to get through to when Concentrix was handling cases. HMRC took back around 181,000 in-complete Concentrix cases, which it says have all now been completed.2 Suspended payments, where information had been requested by Concentrix but not provided within the time allowed (which by law must have been at least 30 days), should have been dealt with as a priority, so that the claimant has been contacted by HMRC and a decision made on her/his entitlement.
There has been major concern that Concentrix had been suspending payments unlawfully, without the correct notice. HMRC said it had contacted all claimants affected by Concentrix by the end of October.
The large majority of outstanding mandatory reconsiderations (20,000 out of 32,000) have been concluded, with around 90 per centbeing found in the claimant’s favour.3 HMRC has explained that this is usually by obtaining new information either from the claimant or by accessing other government data which was not available to Concentrix. HMRC staff can still take on new mandatory reconsiderations that are requested of any decision made by Concentrix. In most cases, it means it will be reasonable for HMRC to accept a late mandatory reconsideration request (or at least it should be, given the nature and extent of the problems with the Concentrix experiment). In mandatory reconsideration cases, claimants who are accepted as being in hardship may receive ongoing payments, the first normally on the following day, while their review is being handled. HMRC guidance on hardship remains scant, but in practice it seems to be depend on being very persistent – and it helps to involve a local MP. Note that this is not a compensation payment, but a payment of tax credits, so may be deducted from any future arrears if the mandatory reconsideration is successful, or classed as an overpayment if the claimant loses. HMRC has stated that where claims are reinstated, the first payment following an over-turn of a Concentrix decision will include arrears owed (the award notice should make this clear so that the arrears are not counted as income for housing benefit but are treated as capital and disregarded for 52 weeks).4
Under the terms of the contract, HMRC should have been dealing with complaints about Concentrix in most cases, although complaints about ‘tone and treatment’ (ie, by a member of Concentrix staff) were supposedly dealt with by the US company itself.
However, it seems clear that the procedure for referring and monitoring complaints was not working, as hundreds of claimants resorted to social media to get any response. Any claimant who feels aggrieved by the way her/his case was handled, and especially if s/he incurred costs due to telephone calls or postage, debt or overdraft charges, should make a formal complaint now to HMRC and reques tcompensation for losses and distress caused. If a satisfactory response is not received, there is a review stage and then lodgement of a complaint with the Adjudicator’s Office.
The House of Commons agreed in an early day motion that Concentrix has not fully met the performance standards set out in its contract and called on the government to take urgent action to compensate people who have erroneously had tax credits withdrawn by the company.5">https://hansard.parliament.uk/Commons/2016-10-26/debates/9DC288E8-BD7C-4...
Jon Thompson, HMRC Chief Executive, told the Treasury Select Committee that, ‘We will not be going back to the market for this kind of work… We will not be going back to the market to seek a third party to help us in any way with the tax credits system.’ 6The">http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidence... Commons Work and Pensions Select Committee has heard evidence to ‘begin the public process of learning what exactly has been happening during Concentrix’s stewardship. Once we have done so, we will then be inviting the government to act on this information so that tax credit claimants in future will not be left penni- less through no fault of their own.’7">http://www.parliament.uk/business/committees/committeesa-z/commons-selec... The National Audit Office is investigating the performance of Concentrix and how HMRC managed the contract.8">www.nao.org.uk/work-in-progress/hmrcs-contract-with-concentrix
CPAG believes that some of the problems associated with Concentrix could have been reduced if HMRC had paid closer to attention to monitoring the contract, and more training and guidance had been provided to Concentrix. CPAG raised concerns about the apparent confusion over responsibilities and lack of monitoring when the contract was first announced. Cases coming through our advice line and early warning system, including lone parents being accused of living with persons unknown, left without payments for months, were brought to the attention of HMRC in a briefing last December, with no response.9">www.cpag.org.uk/sites/default/files/CPAG-Scot-EWS-Briefing_tax-credits.p...
It is also worth noting that many of the same problems and failures have also been a feature of HMRC’s own conduct in tax credit cases. Concentrix was, of course, acting on instructions and information provided by HMRC, who had a duty to monitor its performance throughout the contract, but appeared to have abnegated its responsibilities. However, we believe that the whole concept of involving the private sector in a payment by results contract when dealing with subsistence income for families on low incomes was fundamentally flawed and the exercise must not be repeated.
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- 1. HMRC press release, 11 November 2016, available at 2. Letter from Jon Thompson, HMRC Chief Executive, to Treasury Committee, 16 November 2016
- 3. Letter from Treasury Committee to Jon Thompson, HMRC Chief Executive, 17 November 2016
- 4. Reg 46(9) Housing Benefit Regulations 2006, SI No.213, and disregarded for 52 weeks under Schedule 6 para 9(1)(e)
- 5. Early day motion, agreed following debate, 26 October 2016, available at 6. [
Treasury Committee, Q84 and Q85, 27 October 2016, available at 7. Commons Select Committee, 6 October 2016, 8. See 9. CPAG, Policy Bulletin: tax credits, December 2015, available at