Insights from the Inside: HMRC’s £5.5m Grant Funding Impact

FOR over 20 years, HM Revenue and Customs (HMRC) have funded voluntary, community and charitable groups to support customers needing extra help fulfilling their tax obligations and claiming the correct benefits. This evolved into HMRC’s Voluntary and Community Sector Grant Funding Programme and with a new round of funding starting, Charity Today asked the policy experts at HMRC what difference it has made: 

How did the programme come about?

For many years Grant Funding has been used across the government to help departments target those who will benefit from policies and communicate changes to them. In 2003, with the introduction of Tax Credits, the Inland Revenue awarded a grant worth £500,000 to voluntary and charitable groups to provide extra support to customers who may need help to claim the correct benefits and entitlements. By 2005, when the Inland Revenue merged with HM Customs and Excise, a multi-year funding arrangement, of £1 million annually, was offered to third-sector organisations to support customers who may face difficulties dealing with the newly-formed HMRC. The purpose of the funding was to ensure customers paid the right amount of tax and claimed the benefits they were entitled to.

How else do HMRC help customers who may need extra support?

HMRC’s Customer Directorate was set up in 2008 with the aim of developing a greater understanding of customers’ needs. It undertook research into the specific needs of customers who may need extra help and as a result, a dedicated customer service team called the Needs Enhanced Service (now known as the Extra Support Service) was established in 2011. Extra funding was secured to support voluntary and community organisations to work closely with the team to ensure free, accessible advice and support was in place for customers who may need help with their tax and entitlements ahead of the start of HMRC’s digital transformation programme.

The HMRC Voluntary and Community Sector (VCS) Funding Programme was set up in 2014 to address any gap in customer support and specifically aims to support customers who:

• may face difficulties in understanding their tax obligations
• may have complex needs
• are digitally excluded from accessing HMRC services

How was the fund set up?

Funding principles are aligned with Cabinet Office guidelines. These include research and insight behind the proposed objectives of the scheme, and the design of the programme which includes the application process, guidance and sift criteria. Once the application process is closed, two rounds of shortlisting take place and due diligence procedures are completed before a grant funding contract, which includes key performance indicators and evaluation, is agreed with each organisation.

Each organisation has a designated account manager from HMRC’s Grant Funding Programme team who meets with them regularly to address any queries and to ensure due diligence. The organisations also submit quarterly figures and mid-year and annual reports.

How has support for customers evolved?

Grants were awarded on an annual basis until 2021 when it was decided to award funding for a longer period in recognition of the valuable work done by VCS organisations to support customers – and to reduce the administrative impact both on the sector and HMRC. HMRC’s schemes are now generally for 3-year periods with regular funding payments to the successful organisations.

For two decades, more than £25 million has been awarded to a range of organisations with specialist knowledge and expertise including organisations that can provide specialist tax advice as well as those offering general wide-ranging advice; groups supporting single parents, older people, refugees, those who are digitally excluded, blind and deaf customers as well as a range of debt support agencies.

HMRC’s Extra Support Team of 100 advisors can liaise with all lines of business internally and with external agencies, including other government departments, on behalf of customers. Customers are supported over the phone, through webchat, via email and post and face-to-face or video call if required. HMRC also has a Voluntary Sector Tax Resolution (VSTR) team that works alongside the Extra Support Team and can support VCS organisations with a proportion of their more complex individual tax cases.

How effective is the support?

In the last eight years alone, awarded organisations, working hand in hand with HMRC’s Extra Support Team, have supported nearly 320,000 customers over the phone, via emails or face-to-face. In that time nearly £8.5 million of tax liability has been reduced and more than £11 million in benefits claimed.

Starting in April, 12 organisations – some new to the programme and some that have been awarded funding before – received a share of £5.5 million to continue to provide tailored tax and benefits advice to those customers who may need it over the next three years.

For more information about HMRC’s Voluntary and Community Sector Grant Funding Programme and which organisations are being funded, go to GOV.UK.