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Q&A with HMRC on its customer services

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What does good customer service look like?

In HMRC, we believe that good customer service is about helping people to pay the right tax at the right time and making sure that the process is as straightforward as possible. It’s about helping people to understand their responsibilities and how they go about paying their tax.

We know that HMRC doesn’t offer the levels of consistent customer service that people should expect from us. Our recent performance has been well below the mark, and we’re doing a lot to address that in the short, medium and long term.

What changes has HMRC already made?

We’ve recently introduced a new telephony system. That moved us from 08 to 03 prefix numbers, which means it’s cheaper, and for some people free, to phone us. We recognised that the cost of calls was a bugbear for customers. While mostly invisible to customers, the new telephone platform means we can answer calls much more quickly, because the queue system is automated. And we’ve introduced a new digital scanning system for our customer correspondence – again, invisible to customers – which means that post is moved around HMRC electronically, rather than in vans and on trollies, so we can deal with it more quickly.

Right now, an additional 3,000 people are being recruited and trained as customer service advisers to take calls and deal with post, together with a further 2,000 people from across the department specifically to deal with the tax credits peak. And what we’ve learned over the past few years is how to flex our existing resource to make sure we’re there for customers at the right time.

For example, we know we’ve got big spikes in demand in January for self-assessment and in July on tax credits, so for those two or three weeks we need thousands more advisers to be available to our customers than at other times of the year. I think that will start to address the immediate needs of our customers, who just want to get through to us and get their queries answered quickly and accurately.

The final thing I’ll mention here is that it’s now a year since we introduced our ‘needs extra support’ service. This is a new telephone and mobile face-to-face service for our vulnerable customers, which has been an exemplar of listening to what customers and their advisers really need and designing a service around them. We recognised that people who need extra help weren’t all well served by our enquiry centres and the feedback we’ve had is that the new service is outstanding.

What about your medium and longer-term plans?

The next step is to move customer service on from how quickly a customer can get through on the phone – which I recognise is their most immediate concern – to the quality and level of service they can expect through a range of channels. We’ve already piloted a service called ‘once and done’, which we’ll roll out more widely during the 2015/16 tax year.

For the customer, that’s about not being bounced around different parts of HMRC, each dealing with their own particular element of the customer’s affairs. The idea is that, whichever way you contact us, we’ll be able to resolve all your queries without your having to phone somebody else, being transferred or told you need to write in. It’s a great service which again customers are telling us really works for them. We’re giving our advisers the skills to do this and it’s more fulfilling for them too.

The move to seeing customers in the round will underpin the move from having purely contact centres or purely post-processing centres. By next year, we’ll have merged these to become customer service centres, where our advisers will be able to multi-skill and offer a much better quality service. That’s at the core of what we think good customer service looks like.

Does that mean you will be doing more digitally?

Yes. We’re moving fast into providing more services online. Our personal tax account is going live in the near future and we’ll talk more about that in another article. Going online puts customers in control: they’ll have their own digital tax account and will be able to self-serve, where they want and when they want. Hopefully, that will address a number of the queries that we get, by phone in particular, where people aren’t clear about their tax position or don’t understand how their tax bill has been made up or how their tax code works.

We don’t presume that everyone can go online: we know that some customers choose not to or really can’t deal with us digitally, and we’ll always retain our phone and face to face services for our vulnerable customers. We’ll be developing an ‘assisted digital’ service to help those people who are struggling to stay online and get what they want from their digital account, and for those who really can’t deal with us online, we’ll offer an alternative channel, such as resolving their query over the phone.

You’ll see us really start to develop new channels too, such as social media and web chat, to communicate with customers. If we answer a question on Twitter, it can be seen by all of our Twitter followers and, when retweeted, by their followers too, so we have the potential to help thousands of customers with the same query just by answering one question.

What has the impact been of real-time information (RTI) on HMRC?

The information we’ve got from PAYE reporting in real time will be used to create cumulative tax codes for our customers, so far fewer of them will have underpayments or overpayments in their taxes at year end. We’ll also start to use the data we have across HMRC to pre-populate the forms we send to customers, or increasingly their digital accounts, so when they access self-assessment online, for example, they won’t need to tell us what we already know. That’s quite a big step forward in using our data better.

Using RTI means we’ll increasingly be moving away from the annual tax year cycle. Just as with online bank accounts or utilities, customers will be able to check online how their payments are going, what they owe and what we owe them.

What about issues that customers are facing at the moment, such as the marriage allowance verification process?

Marriage allowance is the first policy that we’ve delivered digitally by default, which means we’ve started the digital service before the phone service. It’s been an interesting experience in understanding who can deal with us online and who can’t.

To make sure everyone gets access to the marriage allowance, we’ve been testing the online service for limited numbers of registered customers, and it’s required them first to verify their identity through the cross-government identity verification service, ‘GOV.UK verify’. Identity assurance is important to keep people secure online, and ‘verify’ offers a single log-in to all government online services.

In these early months, we’ve had feedback from customers that they’re having trouble using ‘verify’, so we are now offering them another way to apply online for marriage allowance and we’re continuing to monitor the situation. I should stress that people can apply for it at any point during the tax year and still get their full entitlement.

There still seem to be issues around tax credits renewals. What are you doing to resolve them?

Our strategy with tax credits is that it’s good to go online.We tried this for the first time last year and 410,000 people renewed that way. Given that we didn’t advertise, that was a great success and our customer satisfaction ratings were 86%. This year, we hope more than a million people will renew online. About 75% of our customers tell us that they want to renew that way, and the phone service is still there for the minority of customers who don’t want to. Some people who prefer the phone don’t even need to hold for an adviser, as many can renew automatically by using our automated telephone service. We’re also using Facebook and Twitter to give general advice and reminders.

But we know that we still need lots of advisers on the phones in July to help customers renew their tax credits, and that’s why we are recruiting those 3,000 extra people and moving around 2,000 people internally to support the tax credits peak.

Is there a change of tack on compliance? Why have you changed your approach to self-assessment late filing penalties?

Our compliance strategy is about making sure we spend our resources in targeting those who are deliberately cheating the system. So it is people in avoidance schemes, people who evade their tax or, from the customer service point of view, people who are persistently late or make lots of avoidable errors.

We announced in February that we’re reviewing our approach to automatic penalties, so that we don’t disproportionately penalise people who might just have missed a deadline, when they actually have a really strong pattern of good behaviour in sending in their tax returns on time. Our analysis suggests that this doesn’t feel right. Our intention with penalties was never about getting extra money: we wanted to change people’s behaviour. We’re likely to follow the discussion paper that we published earlier this year with a request for more detailed feedback. Do they work? Who are the right people to chase after? And what do we do with people who just make mistakes? Do we educate them to get it right without using the blunt instrument of penalties?

How will your plans be affected by the recent announcement of further cuts to HMRC’s budget?

Clearly we need to reflect on the budget we have available. We’re a public service, paid for from the tax we collect, with a great responsibility to be as efficient as possible. A lot of what I’ve described will enable us to deliver a better service and bring in more revenue at lower cost.

What we’ve said initially about the £80m budget cut announced recently is that we won’t be taking it out of either customer service or compliance. We’ve got very strong plans for both of these this year. That means we’ll have to take it out of our change budget, so some of things I’ve mentioned may need to be done differently or to different timescales and we’re looking at that right now.

Final thoughts?

Our long-term vision for customer service is really about customers owning and understanding their tax, having it all in one place online. In March, we published Making tax easier, which sets out that vision in more detail. We’ll be looking again at all our policies and processes, making sure they’re designed around the customer.

We believe it’s absolutely right that people should have access to HMRC by phone or online, but we also need to look at why people contact us as much as they do. We want to hear from our customers not only about what it’s like to deal with us, but also what we’d need to change for them to understand the tax system better and to meet their tax responsibilities easily and quickly.