Accessing HMRC - Good Things Foundation
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Accessing HMRC services: the role of the community sector Accessing HMRC services: the role of the community sector p1
Online Centres help people to interact more • Negotiate manageable repayment
confidently with HMRC benefits and tax schedules for people with large tax bills
Summary services. They use their holistic support model
to identify and respond to a range of user
or penalties.
needs. This report characterises these needs Online Centres are experts in mobilising
and the impact of Centres’ responses to them. these functions when they recognise
It presents usable typologies of the advice and specific needs in people. Their support
guidance which the community sector excels assists people to enter and maintain
at. employment. This realist report examines
the mechanisms behind this work and
In their benefits advice work, Online Centres: demonstrates the centrality of community
• Raise awareness of HMRC benefits among organisations in facilitating access to HMRC
people in financial difficulty services.
• Support the apprehensive to make their first
claim
• Help existing claimants to better
understand their reporting obligations
• Act as intermediaries in situations
where claimants to struggle to report
independently to HMRC
• Advocate for people when they struggle to
challenge a decision that they feel has been
made incorrectly.
In their tax advice work, Online Centres:
• Encourage people who have the vocational
skills but not the confidence to enter self-
employment, by explaining the obligations
of self-assessment
• Teach newly self-employed individuals how
to keep orderly business records
• Advise unprepared traders on how to deal
with approaching tax return deadlines
Accessing HMRC services: the role of the community sector p2Recommendations This report demonstrates that Online Centres
improve access to HMRC services. They also
complex. Support must remain in place
to assist those who are less able to
provide additional help which complements access HMRC services digitally. Online
their advice work. Centres’ wider services Centres already have experience and
improve people’s language skills, digital expertise in digital inclusion and would
competencies and ability to enter employment. be well placed to provide assisted digital
This multifaceted support improves the access for HMRC users.
likelihood that people will maintain stable
work. The holistic model of support found in 2. Invest in further user research
the community sector strengthens the policy and partnership with Good Things
function of HMRC benefits. Foundation and the Online Centres
Network. The difficulty that otherwise
On the basis of this report’s findings, Good capable claimants face when
Things Foundation proposes that HMRC and attempting to challenge an HMRC
other government departments take the decision suggests that the structures
following actions to improve their support for and services underpinning the
the most vulnerable in society: challenge process could be significantly
improved. We urge that HMRC and
1. Make a strategic commitment to comparable government departments
continue supporting the Online Centres conduct substantial user research
Network to deliver advice, guidance into the use of digital and assisted
and assisted digital public services. Our digital services. This will improve user
research shows that Online Centres play an experiences for people accessing
ongoing role in helping some users interact public services and reduce the need for
with HMRC and other government bodies. advocates in the community sector.
This should be acknowledged through
continued financial support for the activities 3. Provide more extensive record-
of Online Centres and the community sector keeping guidance for self-employed
more widely. people. Online Centres report a rapidly
growing need for this type of guidance.
• Although the migration of HMRC Our primary and secondary research
services online is perceived positively indicates that this demand will increase
by both Online Centre staff and many as self-employment continues to
users, the transition to these services is become a larger part of the labour
Accessing HMRC services: the role of the community sector p3market. Additionally, Universal Credit is starting to place greater reporting obligations on self-employed people than many have previously experienced. We recommend that HMRC and the Department for Work and Pensions (DWP) create provision of this support either by training the community sector to provide it, or by investing directly in their own guidance resources. Accessing HMRC services: the role of the community sector p4
Project Purpose and Context skills to access services as they move
Chapter 1:
online. HMRC’s transition to digital services
Since 2015, Good Things Foundation and is partially underway, meaning that Online
its Online Centres Network1 have supported Centres participating in this project
Introduction
people seeking help with their benefits and provide both online and offline guidance to
tax. HMRC funding worth £1.1m has already individuals.
provided almost 25,000 individuals with a
range of advice and guidance on HMRC- Community centres are committed to being
specific queries. as responsive as possible and typically
provide a range of linked support services.
48 Centres across England have run drop-ins,
appointments and workshops to provide this They are accessed by people in need
service. They have helped families, sole traders because they are situated in deprived
and people with additional needs to access the communities. These are the unique
following services: strengths of the Online Centres Network2,
but they also mean that projects run
• Working Tax Credits through the network are necessarily
• Child Tax Credits complex.
• Child Benefit
• PAYE The HMRC project is complex because
• Self-Assessment the organisations delivering it are diverse
and deploy a range of different resources3.
The project has helped people to better Geographical and socioeconomic contexts
manage their income, challenge unfair vary at each delivery point, and the breadth
decisions, and access additional financial help of advice topics allows for large variation in
where it is needed. It has increased awareness the personal circumstances experienced
of HMRC services and enabled people to make by each project user. Additionally, the
the transition into work. problems that project users have are often
complicated and difficult to resolve.
Online Centres have been crucial to the
success of the project. They combine holistic
community support with expertise in digital
skills training, providing vital help in the
transition to an ever more digital society. They
work with individuals who do not yet have the
Accessing HMRC services: the role of the community sector p5Methodology We conducted extensive qualitative research
with staff, volunteers and project users
We needed an evaluation methodology across 11 Online Centres to investigate the
which would address this complexity in contexts, mechanisms and outcomes specific
order to really understand how the project to this project. This research informed the
has had an effect on people’s lives. development of two typologies of HMRC-
related support.
Realist evaluation acknowledges
that an intervention is likely to vary in The first of these typologies summarises
implementation and effectiveness when benefits support. It describes the diverse needs
it operates in different settings and with of people who sought benefits advice at Online
different groups of people. In this way it is Centres. The typology links these needs with
suited to complex projects. the specific ways that Online Centres respond
to them. The second typology applies the same
Realist-informed approaches to approach to support with tax self-assessment.
evaluation are guided by the core enquiry
“What works, for whom, and in what The typologies have both a visual and written
circumstances?”4. They focus on how component and form the main body of this
three areas of a project relate to each report. They describe the work of the project
other: whilst capturing its complexity and the
nuanced ways in which it helps people.
• The context of a project, including the
circumstances of the people it helps The typologies are presented in Chapters 3
(ranging from personal beliefs to the and 4 of the report. Before they are presented,
legislative environment) Chapter 2 explains more about the HMRC
• Typical mechanisms or working services which the project has provided
elements of the project: how a project assistance on.
responds to the circumstances of
the people it helps and what makes it Following the typologies, Chapter 5 discusses
effective some of the broader impacts of the project.
• The range of outcomes that the Chapter 6 reflects on the understanding
project produces when different that we now have of the project and
mechanisms respond to different makes recommendations for future work. A
contextual needs. Methodological Appendix can be found at the
end of the report.
Accessing HMRC services: the role of the community sector p6As a government department, HMRC is • The claimable sum relies on both a
Chapter 2: responsible for both providing certain state
benefits and collecting taxes. These distinct
person’s weekly income and the number
of hours they have worked5
HMRC Services functions require people to interact with
its services in different ways, and produce
• Changes in these variables must be
promptly reported to HMRC to ensure
- the Advice
variation in the types of queries that users that the correct sum is paid
have when the seek help from a Centre. • If this is not done, claimants may have
to pay a penalty sum
Components Here we introduce the most important HMRC
functions addressed through the advice
• Claims are established and renewed
annually. Initial awards are based on
project to provide some context to these types the previous year’s income, meaning
of queries and how Centres respond to them. they are provisional and subject to
amendment as the tax year progresses.
HMRC Benefits
Claimants may need to amend estimates to
HMRC administers several forms of state reflect their income as it develops.
support to people of working age in the UK. The
Advice and Guidance Project typically assists Child Tax Credits (CTCs)
people with three of these benefits. • A ‘top-up’ payment available to families
or single parents can claim if they are
Child Benefit on a low income, regardless of whether
• A payment available to all parents of they are in work
children under the age of 16 • In most cases, only claimable for up to
• Claimable for all children, regardless of two children
family size • Also established on an annual basis and
• Its simple eligibility rules mean that subject to similar amendments as WTCs
claiming Child Benefit does not generally
involve much ongoing communication WTCs and CTCs are both administered by
with HMRC (outside of changing family the Tax Credit Office and are paid together,
circumstances) meaning that interruptions to one benefit
will likely affect the other. For people who
Working Tax Credits (WTCs) claim both Tax Credits, there is potential for
• A ‘top-up’ benefit available to people who extreme disruption.
have a low income, despite being in work
Accessing HMRC services: the role of the community sector p7Tax Self-Assessment
• The Advice and Guidance Project • The system by which self-employed people
provided guidance on several specific (or those earning significant additional
taxes6, but the majority of queries untaxed income such as from rental
related to Income Tax. This is collected property or share dividends) pay Income Tax
by HMRC either through PAYE or via • Earnings are declared in a tax return
self-assessment, depending on whether completed after the end of the tax year in
someone is employed or works for April
themselves. • Individuals paying tax via self-assessment
need a Unique Taxpayer Reference (UTR),
Pay As You Earn (PAYE) which is linked to all of their tax returns
• The system by which employees • Traders must maintain orderly records on
(constituting the majority of business income and outgoings, as these
economically active people) pay most of form the basis of HMRC’s calculations of
their tax taxable profit
• National Insurance and Income Tax • Inaccurate, incomplete or illegible records
deductions are taken directly from may lead to financial penalties
payslips before wages or salary reach an • Different self-assessment tax return
individual deadlines exist for paper and online
• Operates via a system of codes which submission (October vs. January).
vary according to factors such as
the number of jobs/income streams
a person has, and if they receive
employment benefits
• Changes in jobs or working multiple
jobs part-time can result in someone
being placed on an incorrect tax code,
meaning that person will pay too much
or too little tax.
Accessing HMRC services: the role of the community sector p8Each person who interacts with an Online specific capacity that an Online Centre can
Chapter Centre as part of the HMRC Advice and
Guidance project is an individual with their
own set of unique life circumstances. Their
mobilise to respond to each user situation.
These five Centre responses correspond
to the various circumstances of users and
3: Kinds of family life, living situation, and working status
are particular to them. So are their skills, past
experiences, attitudes and fears.
their particular relationships with the state.
Figure 1 was developed through research
Benefits Over the course of several months’ research
we met enough diverse people to understand
conducted into advice given on Tax
Credits, as these generated the greatest
number of benefits-related queries over
Support that the way in which users seek help from an
Online Centre often takes similar forms. There
are typical circumstances which users may
the course of the project. However,
we stress that the need and response
pattern in the typology is likely to be
find themselves in when they access HMRC found whenever public services place
support at an Online Centre. Additionally, how an administrative burden on vulnerable
a user presents to an Online Centre is closely users. Community centres provide support
connected to the sort of relationship they are relating to queries that are likely to emerge
likely to have with HMRC. from a range of public services.
We summarise these multiple relationships in
a typology, displayed on page 10. It represents
typical user needs of benefits claimants and
how an Online Centre would respond to these
needs. These interactions between need and
response provide a series of mechanisms
unique to community support.
The lower half of the typology plots five
typical user situations along a spectrum of
familiarity with, and comprehension of, state
services. From left to right the typology charts
a development of increasing association
between users and the state.
The upper half of the typology presents the
Accessing HMRC services: the role of the community sector p9Accessing HMRC services: the role of the community sector p10
After being in the dark, people find “Some people told me, they told me to
illuminators contact [the Centre] to get help with my
problems. Friends. Everybody tells me,
“If you’ve got a problem, come here for
User Circumstances
information.”
The first user group in the typology has minimal
- Cumar7, Project User in Southall
interaction with HMRC. People in this group
are struggling financially but not aware that
they could be eligible for further state support,
including Tax Credits. People are likely to first use a Centre for
something other than benefits advice
They are likely to be in poverty. They could and guidance. They might come for a
already be in employment, but stuck on a low community lunch, a children’s clothing
income. Alternatively, they might be claiming swap, or a free English class. By providing
Jobseeker’s Allowance but reticent to start this open, unconditional and immediately
working in a part-time or low-skilled position tangible support, Centres gain users’ trust.
that they think is unlikely to support them.
Users struggling in these circumstances often Centre Capacity
have binding responsibilities, such as being As users get to know the people who
locked into an expensive private rental contract run their local Online Centre, they often
or having to care for young children. They may become more comfortable opening
be recent migrants to the UK, have low English up about themselves. Centre staff and
language skills, or suffer from low confidence. volunteers show an interest in their lives.
Through a series of conversations, users
These users are all looking for a way out of bad reveal their struggle.
circumstances. Their first interaction with an
Online Centre is the start of this journey. When they know more about the user’s
situation, Centre staff draw on their
Many users find assistance through social links knowledge to help users access state
in their community. Online Centres are often support. Users may be aware of Child
well known in their neighbourhood, where Benefit, but don’t know anything about Tax
networks of peers with a shared language and Credits until a member of Centre staff tells
experience tell each other about these friendly them.
community centres where a range of help is
available.
Accessing HMRC services: the role of the community sector p11“There was one case, I remember, one of Outcomes
the kids was saying they were hungry at At this stage, the main outcomes for individuals
school. The school realised that granny— are:
because I think the mother had died—was • Awareness of additional state assistance
doing it all out of her pension and hadn’t • Discovery of a new trusted space in the
known to claim all these other benefits. community
So we got all that sorted out. People are • Encouragement to start learning new skills
aware of Child Benefit, but not always Attendance at English language classes
Child Tax Credits.” • Use of computer drop-ins
- Advisor, Online Centre in London • A push to think about making changes to
working patterns
“Some clients who haven’t accessed Child
Tax Credits get Child Benefit, and they
think that’s it.”
- Sharmarke Diriye, Golden Opportunity
Skills and Development
Many Centres address this lack of aware-
ness of Tax Credits in their communities
by embedding a benefit eligibility check
towards the start of any ongoing rela-
tionship with users. Advisors use online
benefits calculators to generate better-off
scenarios, which powerfully demonstrate
how much more money a user could
have access to per week if they applied
for a new benefit or adjusted their work to
reach additional eligibility thresholds.
Accessing HMRC services: the role of the community sector p12People who are aware but scared use towards online forms, which can
their safe place to access services automatically filter out sections which
specific users do not need to complete.
User Circumstances
“Instead of [a form] being 93 pages long,
when they start putting their details in, it
“One of the things we’ve found is that a lot of fits that form to them, so it kind of reduces
people from different communities have this it down so they only put in what they need
issue about liaising with organisations like to fill in.”
HMRC. They have this kind of fear that so they - Advisor, North Manchester Community
have to go through an organisation or have Partnership
someone do it on their behalf.”
- Sharmarke Diriye, Golden Opportunity
Centres acknowledge the time saved by
Skills and Development
completing forms and other HMRC-related
tasks online rather than by phone. During our
Users who are aware of Tax Credits may remain research, users and advisors often described
hesitant about submitting an application. their frustration with the poor service of the
Low confidence, literacy or language skills HMRC helpline.
can essentially prohibit some users from
completing a form or communicating with However, many users who are aware but
HMRC on their own, even if they are aware of scared also struggle with using digital
its services. technology. Regardless of whether a form
is on paper on a device, their need for
“A lot of what we’re doing is actually more assistance persists.
admin as well, because people just don’t have
the confidence, because they’re scared.” Centre Capacity
- Advisor, Online Centre in London Advisors address these users’ needs in a
variety of ways. They often provide a direct
assisted digital service, sitting together with
Vulnerable users find paper forms to be users at a computer and helping them enter
unwieldy and overwhelming. People become their details correctly. A learner at a Centre
confused by form subsections which may or in South West England compares trying to
may not have to be filled out for their particular complete her Tax Credits form on her own
case. For this reason, Centres and learners with having an advisor guide her through it:
alike recognise the benefits of the transition
Accessing HMRC services: the role of the community sector p13“You don’t know what applies [to you], so “Carol will be a perfect example for you today.
it definitely is helpful having somebody She was so scared of filling forms in, and she
there. Otherwise you think, “Oh God no,” sat with me and she couldn’t believe it [...]
you get a mental block. And then you now she’s quite confident of actually doing a
think, “I’ll do it tomorrow,” and that’s how it form herself, because she’s realised it isn’t that
carries on. And you can’t carry on getting scary. It’s taking that small step with them. A
on, if something else is stopping you. And lot of people - especially with the Jobcentre
that’s where the stress comes into it.” again - are forced to learn computers. [We]
- Julie, Project User in South West don’t force anybody to learn computers [...]
England People can come and do 20 minutes with me
if that’s what they want to do. I’d rather do 20
minutes five times a month than they sit with
Centres also provide broader digital skills
me for five hours and go away and forget the
and ESOL training to help users become
lot of it.”
confident enough to submit claims
- Advisor, North Manchester Community
themselves.
Partnership
Online Centres are accepting and
non-pressuring environments which For users who are aware but scared, having a
encourage steady learning and the trusted advisor by their side as they navigate
embedding of skills. With gentle HMRC services gives them assurance that their
encouragement, users can move communication is appropriate and accurate.
from minimal engagement with digital
technology, through sitting and watching Outcomes
advisors using computers, to tentatively
trying things out for themselves - taking • Confident and accurate submission of a new
as long as they need. claim
• A new income stream
Accessing HMRC services: the role of the community sector p14Claimants who have tripped up need Payments received during periods of
emergency troubleshooters insufficient work are classed overpayments
and are liable to be recovered by
User Circumstances HMRC alongside a £300 penalty. Such
overpayments can also surface at the end
As people start claiming benefits, they begin of the tax year if a claimant’s estimated
to interact more heavily with HMRC. Some of annual income deviates significantly its
this contact can be complicated. Working Tax actual figure.
Credits provide an example: they are calculated
in response to a number of factors in a person’s The recall of overpayments often places
life. Some of these are circumstances which users in immediate financial difficulty. Quite
can change on a short time frame. Each time suddenly, they find themselves in significant
they do change, the claim must be adjusted to debt.
reflect the altered circumstances.
Centres deal with the common scenario of
The most frequent change is a person’s weekly WTC claimants presenting with daunting
total of working hours. Recent developments sums of accrued overpayments which need
in the UK economy such as the proliferation to be repaid. These can arise because users
of zero hours contracts8 and growth of the gig have:
economy9 mean that more people are working
non-regular hours. a) been unaware of the need to report on
such a frequent basis
Legally, Working Tax Credit claimants must b) experienced difficulty in reporting due
notify HMRC of any instance when their or their to a lack of English language or digital
partner’s working hours drop below the level at skills
which entitlement starts to apply10. Depending c) been operating under the false belief
on a claimant’s specific circumstances, this that they had already reported.
threshold could be 16, 24 or 30 hours per week.
Unaware of the need to report
For people on zero hours contracts, falling Some users already have a Tax Credit
below these thresholds is not uncommon. account established when they engage with
Changes to working hours must be reported a Centre for the first time, but have little
within a month. If they go unreported, familiarity with their obligations.
claimants continue to receive Tax Credits until
HMRC discovers the error at a later date.
Accessing HMRC services: the role of the community sector p15Over time, their circumstances have So people end up not informing, and of course “A common thing is not all clients see the
changed and they no longer qualify for Tax some people don’t even know that they have HMRC and DWP as separate entities - and
Credits on a constant basis, meaning they to inform, and then later on [the Tax Credits the council. So because they’ve told one
have received a series of overpayments. Office] always come back to people, maybe person something, they kind of assume
The user is notified by HMRC that they one or two years later on, to say “We overpaid that everybody knows.”
must repay these sums plus a penalty you,” and then of course there’s no money to - Advisor, Online Centre in London
levy. This combines with their lower pay!”
working hours to place them in acute - Sharmarke Diriye, Golden Opportunity This leads to users reporting changes in
financial crisis and with a deteriorating Skills and Development” circumstances to the wrong authority, or
relationship with HMRC. failing to report information that is relevant
to one authority and not another. This results
In these circumstances, reporting falls from
Difficulty in reporting again in the risk of Tax Credits overpayments
users’ lists of priorities. Claimants do not report
Other users are aware of the need to and the need for recovery by HMRC.
as needed, overpayments build up, and the
report, but find it hard to consistently
user is placed in debt.
update HMRC. The challenge can be Centre Capacity
compounded by poor English language In each of these scenarios, users face
Attempting to report in the wrong way
skills. Users may attempt to report, but overwhelming and acute (financial
For a further group of users, the main barrier to
find the experience of calling or writing to distress). Online Centres respond by
accurate reporting is confusion in the face of
the Tax Credits Office stressful and time- intervening as a (supportive third party)
a complex system. Many Tax Credits claimants
consuming. Claimants who need help with to help users to quickly (navigate their
also receive other benefits. A typical user could
translation find they cannot rely on friends indebted situation). Centre staff use the
be claiming Housing Benefit from the Council,
or family members to help them with this information that users give them about their
as well as benefits from both the Department
task on such a frequent basis. circumstances to assess whether it is worth
for Work and Pensions and HMRC.
(challenging the overpayment sum) via
mandatory reconsideration11 or attempting
to (negotiate a more achievable payment
“Somebody, for example, on a zero “What is the biggest confusion for residents? schedule) if claimants have been asked to
hour contract: they’ve been told by the It’s about which benefit you get from where. So repay a lump sum.
agency—mostly people work for agencies, you go to HMRC for certain benefits, you go to
not directly with the employer—[that] they the Jobcentre for other benefits, you go to your Centres are familiar with the appeal process,
haven’t got a job maybe the following council for Housing Benefit and Council Tax the obligations of HMRC towards citizens,
week. So this person has to inform the Tax Reduction.” and the scope for negotiation within the
Credit Office for that particular week. [...] - Advisor, Northmoor Community system. They can decisively act on behalf of
You can imagine: how many times will you Association a claimant to minimise the worsening of their
be able to do that? financial position.
Accessing HMRC services: the role of the community sector p16Outcomes Beneficiary: To return papers that are
The possible outcomes for this user coming. So I talk [to my advisor], [and] I am
group can be negative as well as positive, understanding. Here there is a community, and
depending on how a person responds [my advisor].”
to their individual crisis (reflected in the Yuusuf, Project User in Southall
benefits user journeys further into the
chapter):
• Negotiation of a manageable repayment
Negative schedule
• A retreat from claiming, back to being
aware but scared:
“We have clients who won’t claim Tax
Credits because they’ve got into so much
trouble in the past with the way the
system works, that they’re too scared to -
even though they do qualify now. If you’ve
been hit for huge overpayments that
you’re still paying off, even if you qualify
now, some people just don’t want to touch
it with a bargepole.”
- Advisor, Online Centre in London
Positive
• An increased awareness of
responsibilities:
“Interviewer: Will you do anything
differently when it comes to tax now? Have
you learnt anything from this experience?
Accessing HMRC services: the role of the community sector p17People who are dutiful but unable find Most Centres are not frustrated by these
their constant allies repeat visits:
User Circumstances “With our residents it’s about getting them
Some users recognise the importance of on- to a point where they feel comfortable they
going communication with HMRC. However, can come in if they’re struggling. “
they may still experience persistent language - Advisor, Northmoor Community
and skill barriers that prevent them from doing Association
this. Even if they have a good level of conver-
sational English, it can be difficult for users to
Instead they see them as a positive
confidently interpret the language of govern-
development because they signal that
ment. These users often need help.
users are seeking assistance when they
need it. Frequent engagement with a
One project user we interviewed was a Soma-
Centre in order to communicate with HMRC
lian man working as a delivery driver. He once
indicates that a user has recognised the
incurred overpayment charges and has since
closer intricacies of the system and is less
been vigilant in the way he reports to HMRC.
likely to end up in debt.
He knows that he needs to report when his
hours change, and realises that his local Online
Outcomes
Centre can help him with this responsibility,
• Maintenance of active benefit claims
which he does not feel confident enough to
• Reduced risk of overpayment crises
undertake alone. He now acknowledges that
• Effective communication with HMRC
“the journey never ends”, but also knows that
• Sense of being surrounded by a
if he gets the right help, he can avoid overpay-
supportive community
ment crises.
Centre Capacity “Community. That’s confidence.”
For these users, Centres become constant Yuusuf, Project User in Southall
allies. They communicate with HMRC on be-
half of users and mediate the small changes in
circumstances as they happen. When people
realise how Centres can help them, they adopt
a common tactic. Each time they think they
need to report, they bring information to their
Online Centre.
Accessing HMRC services: the role of the community sector p18People who are alone in the fight meet Adaolisa had been a long-term claimant of
advocates Tax Credits, which supported her alongside
her part-time work as a healthcare
User Circumstances assistant in the NHS. She also received the
The users who are already most engaged with additional childcare element of Working
HMRC approach Centres’ advice services from Tax Credits, which helped her to pay an
a distinct perspective. People who feel alone in approved childminder to look after her
the fight are already engaged in active dispute youngest child.
with HMRC, but are unable to progress their
case. Adaolisa quickly fell into arrears with her
Council Tax and childminder when HMRC
They are able to pursue a dispute because stopped all of her Tax Credits payments,
generally they do not face language barriers. after she missed the deadline to renew
However, although these users are able to her claim. She contacted HMRC and tried
start an official challenge, they find it hard to to explain why this had been the case:
pursue. Their confidence and resilience when she had recently moved house, and
dealing with authorities is low. After a series of despite setting up a forwarding address,
unsuccessful communications, they feel they the relevant HMRC documentation had a
can no longer make progress without support. delayed arrival at her new address. By the
time it arrived, Adaolisa was caring for her
brother who was recovering from major
“I felt that I was talking to the wall. I even tried heart surgery.
to write a letter, but they didn’t acknowledge
it either, or accept it. They are so aggressive, “I was running up and down, trying to fix
they don’t want to listen.” things, because when [my brother] finished
- Chibundo, Project User in London his operation, he came home and I was
looking after him. I had to bathe him, I had
These users engage with an Online Centre in to clean him, make sure he was alright. I
the hope of finding someone who can present said [to HMRC], “All these things have come
their case more forcefully and with greater together, that’s the reason why.” I was
effect than they can alone. This scenario is trying to explain to them, I wrote a letter
powerfully illustrated by the case of Adaolisa, to them, but they refused, they said they
a 49 year-old single mother of three children couldn’t reinstate me.”
from London. - Adaolisa, Project User in London
Accessing HMRC services: the role of the community sector p19After 8 months of pursuing her case, Centre Capacity
Adaolisa was still not receiving Tax Credits The Online Centre acted as an advocate for
payments. Her physical and mental health Adaolisa. Her advisor applied pressure on
had deteriorated and the recovery of HMRC with a persistence and confidence that
her Council Tax arrears was transferred Adaolisa couldn’t match. The Centre wrote
to bailiffs. Adaolisa became increasingly letters and had phone conversations with
exasperated with her situation. HMRC to demonstrate Adaolisa’s eligibility
until HMRC agreed to reinstate her Tax Credits
Things started to change when a friend and backdate 4 months’ worth of missed
told her about a local Centre who could payments. This meant that she was able to
probably help take up her case. Adaolisa start to paying off debts.
made an appointment with an advisor and
felt immediate relief when she realised Outcomes
she had found someone who was willing • Getting a case heard
to hear her story and take it seriously. The • Effective negotiation with HMRC
advisor reassured Adaolisa that she was • Reinstatement and/or back-payment of
still eligible for Tax Credits and that she benefits
would be able to have them reinstated:
“She wrote a letter to them and asked me “They gave me that confidence that, no matter
to read it. And I read it and I signed it and the trouble I have, I still have some people that
said it was OK. Everything that I’d said, can help me to fight my battles.”
she wrote it, and she gave them a call in - Chibundo, Project User in London
my presence, which really cheered me up.
She called them and asked them why they
couldn’t reinstate me. And they gave a
few reasons: “Well, it’s too late… blah blah
blah,” and she said, “That’s alright, if that
is the case, we’re going to put it in writing
and I’m going to write to you.” So she said,
“Adaolisa, go home. Don’t worry, I will write
to them. I will keep pestering them. They
have to pay you your money.””
- Adaolisa
Accessing HMRC services: the role of the community sector p20User Journeys through Benefits Support The benefits support typology is not intended to represent the typical journey of a single user through the benefits and advice systems. In- stead, it depicts characteristic points in individuals’ journeys which cause them to seek help. The illustration below supplements the typology by showing how single users’ journeys might intersect with the advice service. The shaded bar represents user contexts which Centres respond to with direct assistance. Accessing HMRC services: the role of the community sector p21
It is possible that a user may start in the decision, where they experience difficulty. In these cases, Centres can act in a
dark and progress through each stage They are an independent claimant until they similar role to the advocate response in
of need in close contact with a Centre. feel alone in the fight, at which point they the benefits typology, clarifying disputed
However, it is also likely that some users seek the advocacy support available at an circumstances to HMRC and presenting
will only draw upon Centre support at Online Centre. individuals’ situations to other decision-
specific points in their journey. We provide making authorities.
four examples here. A note on Child Benefit
Although Tax Credits constituted the major Notwithstanding this observation, many
1. A user becomes aware of benefits component of the benefits advice delivered Centres specialising in benefits advice are
and gets help applying for them at a through the project, people also sought located in communities where English is
Centre, but goes on to independently assistance on Child Benefit. Centres reported not spoken as a first language. Centres
manage their claim. This happens that these queries were often of a different give users with additional language needs
because the user has developed the nature to those relating to Tax Credits. The guidance on interpreting, completing and
skills and confidence to communicate problems lay not in liaising with HMRC, but in sending off Child Benefit forms, much like
with HMRC independently and the personal and familial disputes surrounding a safe place to access in the benefits
Centre has effectively made them claims. This reflects the much lighter typology.
aware of their obligations. bureaucratic load that Child Benefit places on
2. Someone registers for benefits claimants compared with Tax Credits. Centres Unlike Tax Credits, there is widespread
independently, but subsequently spoke about disagreements when relationships awareness of Child Benefit in most
incurs penalties through failure to come to an end and both parents assert that communities. Wai Yin Society, a Centre in
adequately manage their claim. This they should continue to receive Child Benefit Manchester, described how local Chinese
leads them to seek emergency help payments. mothers arrive at the Centre asking about
when they have tripped up. From this ‘milk money’, which the Centre has learnt is
position, they may disengage from the “There might be problems where partners their shared term for Child Benefit. There is
benefits system; progress to using a have split and both partners are trying to thus much less need for Centres to act as
Centre as a constant ally; or resume get the Child Benefit, sometimes out of spite. illuminators for Child Benefit.
independent claiming. We’ve had a few like that. Say that the mother
3. A claimant needs Centre help with (usually, [but] sometimes the father) is the one
managing a claim for an extended looking after the children, but the other [parent]
period whilst they remain dutiful but will keep trying to put the claim in [...] the
unable, but eventually moves towards trouble is [HMRC] will often close the mother’s
independent claiming. claim because the father has claimed, and it’s
4. A user communicates independently more of a battle—a family issue, rather than
with HMRC effectively until they wish anything else.”
to challenge or contest an official - Advisor, Online Centre in London
Accessing HMRC services: the role of the community sector p22In Chapter 3 we presented the range of
Chapter 4: circumstances that users seeking support with
benefits can have, in addition to the responses
Kinds of Self- that Centres can mobilise to assist each type
of user circumstance. Here we apply a similar
Employment and treatment to the range of contexts which
cause people to seek help with personal tax
Self-Assessment affairs. The result is a typology of support with
self-employment and self-assessment12.
Support
From our research, we developed profiles of
users with varying levels of self-employment
and self-assessment experience. The typology
matches these profiles with corresponding
response activities from Centres. 4 user
personas and their touchpoints with the
project are plotted along a conceptual timeline
that ties in with the tax year. The profiles start
with the first user group sitting just after April:
the skilled but skeptical.
Accessing HMRC services: the role of the community sector p23Accessing HMRC services: the role of the community sector p24
People who are skilled but skeptical begin to share more of themselves and
see how self-employment can be their life circumstances with others.
demystified
In this way, Centre staff become aware
of people’s life challenges, but also their
User Circumstances (assets). They see where individuals could
People in this user group are proficient in a utilise their skills to greater effect, and
particular skill that could become an additional (encourage) them to do so.
income source - such as carpentry, cooking
or design. However, they choose not to pursue Many of the advisors involved in the HMRC
this skill as an income-generating activity Advice Project have (lived experience of
because they perceive the obligations of self- self-employment). They use this experience
employment to be complicated and out of their to support users by sharing their own
reach. understanding of self-employment and
self-assessment.
“I think people who have got [job-specific]
skills but lack digital skills in a bigger way, and
“...because I’ve been self-employed myself
[who] also don’t have confidence in spoken
I know how to do [it]. I’ve spent the last
English, I think they are the ones who still have
two years explaining to people that self-
the ambiguities and think “Self-employment
assessment is not as hard as you think.
is not for me. It’s like business - I have to be
Most people like me, a tutor or a builder,
in a coat and a suit to be self-employed.” I’ve
they don’t need an accountant, it’s
seen, it’s how our users view it. So for example
something they can do on their own. They
this lady, Manuela. She’s very good at making
can do the cash-basis [accounting]. It’s a
earrings and other things, and that’s a little
very simple in and out—very simple form.”
self-employment opportunity.”
- John Curtin, North Manchester
- Malathy Muthu, Skills Enterprise
Community Partnership
Centre Capacity Elucidating what is involved in self-
As described in the previous chapter, many employment and self-assessment is an
organisations in the Online Centres Network important step for people who do not
play multiple roles in the lives of people who consider it because they believe it is too
interact with them. Over time, people who complicated.
attend a Centre’s activities develop trusting
relationships with staff or volunteers. They
Accessing HMRC services: the role of the community sector p25When advisors a) focus on people’s Some Online Centres are unable to commit
strengths and b) share their own the time necessary to help sole traders in
experiences of self-employment, they this way, coping with demand in other advice
provide two sources of confidence to areas. Others recognise the limits of their own
users. Through their advisors, skilled expertise and so use their partnerships with
but skeptical individuals witness what specialist services to ensure users receive the
is possible by hearing stories of lived best guidance possible.
experience. They also receive crucial
encouragement from trusted people who “We do signpost and refer to other organisa-
know their strengths. Witnessing success tions for them to support the setting up of a
in others who share your characteristics business. [...] We try and link them in with those
and receiving encouragement from to get them thinking about things like business
respected places are two of the key plans, income and expenditure sheets, and
sources of confidence to act. This is trying to get that built in as early as possible,
a concept of self-efficacy developed because although we could probably help
by Nesta13. Services which support them with setting that up initially, we have a
confidence to act by building hope, restriction on time. That’s when our time factor
confidence and sense of purpose - and kicks in.”
enabling people to set personalised and Advisor, Northmoor Community Association
realistic goals - are examples of what
Nesta terms ‘Good Help’13. Some of these more specialist services can
also be found in the Online Centres Network.
Strong interpersonal relationships These organisations are studied in the next
between Centre staff and users form section of the typology.
the fundamental basis for this type
of help and underpin the main advice Outcomes
mechanism in this stage of the typology. • Willingness to engage with the idea of self-
For users who decide they want to employment
pursue self-employment more seriously, • Initial understanding of how self-
some Centres also refer users to a more assessment and the Personal Tax Account
formalised service that can provide
more intensive support on areas such as
VAT registration, business planning and
funding options.
Accessing HMRC services: the role of the community sector p26Those keen to start learning the During these sessions they can develop
their business plan and seek further
ropes have the opportunity to equip expert advice. Users also attend series of
themselves with skills group-based workshops on topics such
as invoicing, financing a new business,
User Circumstances and marketing. HMRC-specific advice
This group of project users already feel (on tax-deductible business expenses,
comfortable with the potential idea of entering VAT registration, relevant deadlines
self-employment. However, they also recognise and obligations, and what constitutes
that they lack certain skills that would give adequate and proper business records) is
them a stronger foundation for success. thus embedded in wider provision of self-
Some of these users were previously skilled employment support.
but skeptical, but have been encouraged to
consider self-employment by Centre staff.
Others consciously seek assistance from “I went quite a lot, to see [my advisor].
a Centre specifically for self-employment, Every two weeks, I think I went [...] She’s
having already decided for themselves that it so friendly and straight to the point. You
is an avenue they want to pursue. If this is the ask her any questions, and she gives you
case, they may have been referred from their the straight answer, it’s no beating about
local Jobcentre Plus or discovered the HMRC anything. “This is how it is, this is what you
Advice Project through their own independent have to do.” It’s made very simple.”
research. These users are generally (not - Julie, Self-Employed Cleaner and
entering self-employment under duress). They Household Help
normally have (sufficient literacy, numeracy and
digital skills) to eventually manage their own “I was so glad the [Centre] has this service
tax affairs once they understand the principles here—that it caters for people who are self-
of record-keeping and commence working for employed. And it’s great that [my advisor] is
themselves. self-employed, because then we are on the
same platform and he can advise me on the
Centre Capacity dos and the don’ts of being self-employed,
At a Centre able to provide this sort of support, so I know that I’m making my contributions.”
users are introduced to a small team of trained - Vasi, Self-Employed Teacher
business advisors. They may also have access
to a set number of free 1-to-1 business advice
sessions.
Accessing HMRC services: the role of the community sector p27These types of interaction give individuals where clients can register for HMRC Online Outcomes
the time to realistically assess the viability Services in the reassuring presence of advisors • Knowledge and confidence for fulfilling
of their proposed business activities. It is (acting once again as safe places to access). tax-reporting obligations
increasingly important that sole traders • Time and resources to assess if a stated
do so, as the introduction of Universal business idea is viable
Credit14 will place more pressure on self- “Yes, I [come here] to do emails and to print
• Understanding of the mechanics of man-
employed individuals to prove profitability out worksheets relating to English teaching [...]
aging one's own tax affairs
than Working Tax Credits have done. It’s like this is my business outlet where I do all
• Embedding of ‘healthy’ record-keeping
Self-employed Universal Credit claimants the business stuff.”
habits and routines
will be expected to prove that they are - Vasi, Self-Employed Teacher
‘gainfully self-employed’, with organised
and regular work which generates income “Yes, I do my own accounting. I keep all my
These Centres also tend to (keep their services
at least the level of the National Minimum receipts, and everything is filed according to
openly available to clients once they have
Wage15. Recent research carried out by the year and the month. So yes, it’s collecting
started trading) and as the time comes for
DWP discovered that currently 67% of self- paper.”
them to submit their first self-assessment.
employed WTC claimants working over - Vasi, Self-Employed Teacher
They remind users that their trained coaches
36 hours a week earn less than £1,000 a
will be there to double check everything is
month16. This places them well below the “...the paperwork, that is all about being self-
in order for the tax return deadline. Centres
minimum level of viability for Universal employed. Do the work and get the payment
thus stay open to further (‘touchpoints’)
Credit eligibility and means that they will be and that, but you have do your paperwork. That
occurring between the project and the
required to seek alternative employment. is essential.”
user, creating as many as are needed for
Online Centres delivering the HMRC Advice - Julie, Self-Employed Cleaner and
the individual to feel competent in fulfilling
Project acknowledged this scenario as a Household Help
their obligations independently. This typifies
future cause for concern.
effective (scaffolding), another central element
of ‘Good Help’13. Scaffolding is successful when
Centres providing this type of advice are
a service’s support gradually retreats from
more formal and specialised than many
intensive assistance to occasional guidance,
others in the Online Centres Network. They
whilst remaining available to lend help should it
are oriented towards preparing people for a
be necessary.
successful launch as a sole trader or small
business. They have classrooms available
for workshops and may also provide free or
(low cost workspace) to new sole traders
who do not (yet) have their own premises
to work from. They also have IT suites
Accessing HMRC services: the role of the community sector p28Sole traders with a bag of receipts and receipts. In place of this, Centres
receive a friendly wake-up call advise users on the minimum viable actions
that they should take to establish more
orderly accounts. This generally means
User Circumstances
cash-based accounting and paper-based
Self-employed people also seek help in
record-keeping in a dedicated entry book.
more challenging circumstances. Individuals
who have already started trading on a self-
employed basis, but are rapidly approaching “In the beginning, when I went to [the
the end of the reporting window for self- Centre], I tipped everything on the desk and
assessment with non-existent or highly [my advisor] said, “I mean, that’s enough
disorganised accounts turn up at Centres with to put anybody off. All these bits of paper,”
bags, boxes or bundles of receipts. Often, the and I hadn’t a clue where to start. And she
receipts may not even be relevant to their showed me how to do everything […] I’ve got
business activities, and they are likely to be out one book now. In the beginning my book was
of chronological order. a right muddle […] I’ve got each day, how
many hours I work, how many miles, and
“I remember a client who came to us with a add up the total and then I do that at the
big box of receipts and things and we said, end of the week, how much, and at the end
“We can’t do that.” We can’t say, “This is your of the month, I do the four weeks, and then
expenses and this is your milk bill,” and all put that in to the front of the book for the
those things. We can’t do that. And he was a month.”
bit angry. So we thought: no. We can guide, but - Julie, Self-Employed Cleaner and
you can’t come on the 29th [i.e. just before the Household Help
deadline] for last minute advice.”
- Malathy Muthu, Skills Enterprise Centre staff introduce this information with
more sensitivity than might come from an
accountant or an official authority. For users
Centre Capacity in this situation, the Centre is a forgiving
For these users, Centres provide a friendly final touchpoint before they must submit
but firm wake-up call that such practice is their tax self-assessment. The project
insufficient and would not be looked upon functions as a much-needed reality check
kindly by HMRC. Advisors underline to users for unprepared sole traders who may have
that they can not sit with them and pore over entered self-employment in desperate
details of months’ worth of invoices, payments measures17.
Accessing HMRC services: the role of the community sector p29Through our research, we discovered Online Centres recommended repeatedly
many advisors who do not have the time that public bodies including HMRC, DWP and
or expertise to help individuals in this Jobcentres should invest more thought and
situation and would want to refer them resources towards addressing this shortfall.
to more specialist services. However, This is especially since Centres perceive the
they reported that such support for sole problem being likely to worsen as Universal
traders who are already established but Credit is further rolled out.
unsuccessful is severely lacking.
Outcomes
The possible outcomes for this user group can
“We get a lot of calls from people who are be negative as well as positive, depending
sole traders or self-employed, for help, on how a person responds to their individual
and there isn’t much around. And we can’t crisis:
help very much. There’s a legal advice
centre up the road that does some, but Negative
we’re just not geared up for that at all. • Disengagement from the Centre
We work with some people who try and • Continued failure to keep records to a
find people jobs and we’re always asking, sufficient standard
can they do some courses or help for sole
traders, but the one place that we knew Positive
seems to have gone to ground. So there’s • Realisation and acceptance of the
not an awful lot of help in that area. A unsustainability of current record-keeping
huge need for courses on how to do self- methods
assessment [...] So you’ll get quite a few
people who might not have necessarily
thought about being a sole trader or self-
employed, [they] will go down that route,
and often then don’t have the skills to do
even the basics to keep up. But there’s
not much help out there for them at the
moment [...] there is a huge gap there.”
- Advisor, Online Centre in London
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