Death and taxes - what Government could do better
The lives of bereaved people could be made a great deal easier if the different government agencies involved when someone dies were to share information and join up the services they offer, a new report concludes.
The Low Incomes Tax Reform Group (LITRG) has campaigned for many years to promote better joined-up services for the bereaved. The Government has promised a solution but has yet to deliver in practice. A report (attached) launched today at the House of Lords by LITRG, supported by research and data from the advice charity TaxHelp for Older People (TOP), suggests how it might be done.
The report considers what simple steps could be taken to improve bereaved people's experience of the tax system (including tax credits and benefits administered by HMRC). It makes a range of recommendations aimed at making better use of government systems, and reducing the number of contacts people need to make with government agencies at a difficult and stressful time.
The report's 12 recommendations include:
the Government should roll out the Tell Us Once pilot (where bereaved people can make one notification of a death reach a number of government departments) nationwide, and involve HM Revenue and Customs (HMRC) in its development;
HMRC should offer face-to-face help and home visits to vulnerable taxpayers, or fund the voluntary sector to do so;
A working party should be set up to consider how best to achieve an ‘end to end' government service to the bereaved, and to maintain a high standard of service to the bereaved and other vulnerable customers in the context of the new Department of Work and Pensions (DWP) and HMRC Charters;
HMRC should take the initiative in (for example) giving older taxpayers the age-related allowances when they turn 65, and eliminating overpayments of tax by matching data where available.
When someone dies, bereaved friends and relatives face a number of hurdles in dealing not only with HMRC but with other government departments and agencies such as the DWP.
Apart from registering the death and dealing with the deceased's property, the personal representatives might have to submit an inheritance account of the estate and its assets, or a self-assessment return for the deceased up to the date of death. If the deceased was receiving tax credits, the Tax Credit Office will have to be notified; if in business, there will be PAYE and VAT implications to resolve. If the individual was in the PAYE system the problems are different.
A death can also bring about changes in the income and circumstances of those who are left behind. And all this comes at a time of great emotional stress.
Martin Hodgson, Chairman of trustees of TaxHelp for Older People and a lead contributor to the Report, said: "Government could do so much more to help people who are bereaved, simply by linking up systems and thinking through what could be done automatically. That way bereaved people will not have to report the same thing continually to different Government agencies - or even to different departments within the same agency.
"A more thoughtful and creative use of existing mechanisms is all that is needed. And it can be done at low or negligible cost."
John Andrews, Chairman of LITRG, said: "Advice agencies such as TaxHelp for Older People are at the frontline of the inefficiencies of the system. LITRG tries to join up the activity of HMRC with other departments, such as the DWP and we are continually frustrated at the silo mentality of ostensibly customer-facing organisations.
"People need the maximum support from all government departments at the time of bereavement."