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HMRC dismissals for gross misconduct hit five-year high as 179 civil servants sacked

September 12, 2024

HMRC have increased the interest rates payable by taxpayers on late payments, to 7.75% - up from 7.5%, the highest interest charge on late payments since ca. 2001.

HM Revenue and Customs (HMRC) has sacked 179 employees for gross misconduct in 2024, the highest number in at least five years, according to data obtained through a freedom of information request.

This represents a 43% increase from 2020 when 125 employees were dismissed for similar reasons, accounting for just 28% of all terminations at the time.

The recent dismissals, which now constitute over half of the 321 terminations at HMRC this year, reflect a firmer stance on disciplinary matters within the department, which employs over 65,000 staff. Gross misconduct encompasses serious breaches of conduct, such as bullying, theft, intoxication, damage to company property, gross negligence, or other actions that could harm the organisation. Specific to HMRC, it can include unlawful disclosure of sensitive taxpayer information or fraud using government systems.

In one notable case, a tax office worker was jailed for over two years after defrauding the taxpayer of £300,000 in child benefit by falsely claiming that three of her children were disabled and fabricating tax credit claims for another 15 children, using details accessed through her work computer system.

Civil servants can also face dismissal for unauthorised access to government databases. For instance, Louise Kelly, a 20-year veteran of the Department for Work and Pensions (DWP), was dismissed after improperly searching for her neighbour’s address in the “Searchlight” database, which contains sensitive financial and health information. Her dismissal was upheld by an employment tribunal, underscoring the importance of robust policies to prevent misuse of such systems.

The DWP also reported 190 dismissals for gross misconduct in 2023-24, accounting for about 40% of all terminations, down from 221 the previous year.

Steve Sweetlove of accountancy firm RSM noted that while the increase in gross misconduct dismissals at HMRC could seem troubling, it might also indicate a stricter approach to upholding standards of conduct. “Given the vital role HMRC staff play in dealing with taxpayer data and collecting revenues for the government, cases of gross negligence can represent a really serious issue, so it’s important that appropriate action is taken where necessary,” he said.

Michael Newman, an employment law specialist at Leigh Day, added that gross misconduct is reserved for the most serious breaches and remains relatively rare. He highlighted that what qualifies as gross misconduct can vary depending on the employee’s role, with fraud at HMRC being particularly serious.

The increase in dismissals comes as HMRC faces significant operational challenges, with customer service at what has been described as an “all-time low.” The department managed to answer only 66% of customer calls last year, well below its target of 85% and down from 71% in 2022-23. Rising demand for HMRC services, driven by frozen tax thresholds pulling more taxpayers into higher rates, has compounded these issues.

The Public Accounts Committee earlier this year criticised HMRC’s service levels, describing them as the worst they have ever been, following an “unprecedented” number of complaints about the tax office’s performance. Additionally, levels of bullying and harassment at HMRC are reported at 8%, while employee engagement is at 56%, the lowest in the civil service compared to a benchmark of 64%.

A government spokesman acknowledged the challenges but emphasised that all large organisations face occasional issues with staff behaviour. “We take all allegations seriously to ensure we work in an inclusive environment that is friendly, tolerant and respectful,” the spokesman said. “All our employees must ensure they follow our code of conduct alongside the civil service code, with breaches looked into and if necessary investigated, potentially resulting in dismissal.”

As HMRC prepares to receive additional funding for recruitment, the need for strong oversight and support for new recruits will be crucial in maintaining standards and improving overall performance.