A new report by the National Audit Office highlights both the extent of HMRC customer service failings and the scale of the challenge facing the tax authority. According to the report:
HMRC’s telephone customer service is not delivering: average wait time of nearly 23 minutes in first 11 months of 2023/24 (up from five minutes in 2018/19). Customers cumulatively spent 798 years on hold waiting to speak with HMRC in 2022/23 – more than double the time spent on hold in 2019/20.
New digital services have not reduced service pressures as much as HMRC expected.
HMRC is not expecting to meet its telephone performance target in 2024/25 and has not made clear what level of service customers should expect.
While HMRC’s strategy to move customers to digital services ‘makes sense in many ways’, the its digital services do not currently allow customers to resolve more complex queries, and they have not made enough of a difference to customer contact levels.
HMRC now faces a significant challenge without increasing capacity, the NAO says. Although the total number of telephone calls has reduced, the total amount of time advisers are spending on each call has increased – and as a consequence, HMRC’s call-handling workload has reduced more slowly than reductions in call volumes. The department has therefore not been able to make all the staff reductions it planned. However, due to budgetary constraints, it now needs to cut staff numbers by 14% in 2024/25, despite only achieving a 9% reduction between 2019/20 and 2023/24.
The NAO recommends that HMRC develops more realistic plans for cutting the services it is replacing with digital channels and adopts a more customer-focused approach to encourage the take-up of new services.
HMRC should also reduce avoidable and expensive forms of contact, for example by increasing opportunities for customers to send correspondence and documentation through secure electronic networks, and learn from the implementation of its digital projects, the NAO says.
In related news, earlier in the week the Financial Secretary to the Treasury, Nigel Huddleston, had announced ‘£51 million in new funding’ for HMRC, to enable HMRC ‘to meet the performance standards on its phone lines that its customers expect, while continuing the transition to a digital first model of tax administration’.
Huddleston notes that, while HMRC’s digital-first strategy is ‘the correct long-term vision for tax administration’, taxpayers need to have access to reliable and responsive helplines. The funding aims to bring phonelines ‘back up to the published target of 85% of calls to HMRC advisers being answered’.
However, Richard Wild, CIOT Head of Tax Technical, commented: ‘With the [NAO] report suggesting HMRC customer services have been told to find at least £116 million of new savings during the 2024/25 tax year, this week’s £51 million funding injection, while welcome, amounts to no more than slowing the pace of the cuts and tempering their short-term impact.’
‘HMRC’s service levels continue to be the single greatest concern expressed by our members, and our surveys tell us that this is making it harder and more expensive to do business, and damaging trust in the tax system.
‘While £51 million sounds like a lot of money, it’s just a small fraction of HMRC’s customer service budget, and needs to be spent wisely. It also needs to be sustained rather than a one off. We hope that this additional funding can help bridge the gap that exists between the desire to do more digitally, and the availability and reliability of systems which would make that possible.’
The CIOT points out that the net cost of HMRC’s customer service operations in 2022/23 was £881m, with the extra £51m representing a 6% increase on that figure.
A new report by the National Audit Office highlights both the extent of HMRC customer service failings and the scale of the challenge facing the tax authority. According to the report:
HMRC’s telephone customer service is not delivering: average wait time of nearly 23 minutes in first 11 months of 2023/24 (up from five minutes in 2018/19). Customers cumulatively spent 798 years on hold waiting to speak with HMRC in 2022/23 – more than double the time spent on hold in 2019/20.
New digital services have not reduced service pressures as much as HMRC expected.
HMRC is not expecting to meet its telephone performance target in 2024/25 and has not made clear what level of service customers should expect.
While HMRC’s strategy to move customers to digital services ‘makes sense in many ways’, the its digital services do not currently allow customers to resolve more complex queries, and they have not made enough of a difference to customer contact levels.
HMRC now faces a significant challenge without increasing capacity, the NAO says. Although the total number of telephone calls has reduced, the total amount of time advisers are spending on each call has increased – and as a consequence, HMRC’s call-handling workload has reduced more slowly than reductions in call volumes. The department has therefore not been able to make all the staff reductions it planned. However, due to budgetary constraints, it now needs to cut staff numbers by 14% in 2024/25, despite only achieving a 9% reduction between 2019/20 and 2023/24.
The NAO recommends that HMRC develops more realistic plans for cutting the services it is replacing with digital channels and adopts a more customer-focused approach to encourage the take-up of new services.
HMRC should also reduce avoidable and expensive forms of contact, for example by increasing opportunities for customers to send correspondence and documentation through secure electronic networks, and learn from the implementation of its digital projects, the NAO says.
In related news, earlier in the week the Financial Secretary to the Treasury, Nigel Huddleston, had announced ‘£51 million in new funding’ for HMRC, to enable HMRC ‘to meet the performance standards on its phone lines that its customers expect, while continuing the transition to a digital first model of tax administration’.
Huddleston notes that, while HMRC’s digital-first strategy is ‘the correct long-term vision for tax administration’, taxpayers need to have access to reliable and responsive helplines. The funding aims to bring phonelines ‘back up to the published target of 85% of calls to HMRC advisers being answered’.
However, Richard Wild, CIOT Head of Tax Technical, commented: ‘With the [NAO] report suggesting HMRC customer services have been told to find at least £116 million of new savings during the 2024/25 tax year, this week’s £51 million funding injection, while welcome, amounts to no more than slowing the pace of the cuts and tempering their short-term impact.’
‘HMRC’s service levels continue to be the single greatest concern expressed by our members, and our surveys tell us that this is making it harder and more expensive to do business, and damaging trust in the tax system.
‘While £51 million sounds like a lot of money, it’s just a small fraction of HMRC’s customer service budget, and needs to be spent wisely. It also needs to be sustained rather than a one off. We hope that this additional funding can help bridge the gap that exists between the desire to do more digitally, and the availability and reliability of systems which would make that possible.’
The CIOT points out that the net cost of HMRC’s customer service operations in 2022/23 was £881m, with the extra £51m representing a 6% increase on that figure.
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