HMRC customer service plummets to ‘all-time low’ and taxpayers are fed up, say MPs

Customer service at the tax office has fallen to an all-time low as taxpayers face increasing delays.

HMRC service levels have continued to deteriorate over the past year, according to a Public Accounts Committee report published today.

In 2022-23, it took an average of 16 minutes and 24 seconds for an advisor to answer the phone, up from 12 minutes and 22 seconds in the previous financial year. in 2021-22.

In 2022-23, 62.7 per cent of callers waited more than 10 minutes to speak to an advisor, up from 46.3 per cent in 2021-22.

The increased demand for HMRC services is largely due to the increased number of people paying taxes due to the tax burden.

HMRC told the PAC inquiry it did not have the resources to meet growing demand for its telephone and postal services to the expected standards.

A target has been set to reduce incoming telephone and postal contacts by 30 per cent by 2024-25 compared to 2021-22.

It says if it can achieve this reduction it should have the resources to meet its service standards.

However, HMRC has already received criticism from accountants and business owners who have struggled with the transition.

Last summer, the tax office announced it would close its self-assessment helpline for three months to try to direct queries from the helpline to the department’s digital services.

In December, HMRC closed its phones again ahead of the self-assessment deadline of 31 January.

This Is Money has written extensively about HMRC delays and the impact of the closure of the VAT registration and self-assessment helplines.

The committee said it had received an “unprecedented” number of submissions on the tax office’s performance, “demonstrating the extent of taxpayers’ exasperation at the quality of services and the impact on businesses”.

Several submissions highlighted deteriorating customer services and increasing delays as a key issue affecting businesses.

The PAC has called on the Treasury and HMRC to ensure the department has “sufficient resources both short and long term” to meet its service standards.

While staff cuts have done little to help with resourcing, insiders have told This is Money that staff retention and a lack of training are at the root of HMRC’s problems.

HMRC is ‘struggling to cope’

The increasing taxpayer population and the complexity of tax issues mean HMRC is “struggling to cope”, the report said.

Tax revenue hit a record £814 billion in 2022-23, but the department still fell £2 billion short of its £36 billion compliance performance target, which is additional income that would otherwise have been lost if not for HMRC intervention.

The PAC report also found a significant reduction in criminal prosecutions by HMRC, from 691 in 2019-20 to 240 in 2022-23.

HMRC says it is “increasingly selective” when it comes to seeking prosecution, partly due to delays in the justice system, but the PAC is concerned it sends the wrong message.

Dame Meg Hillier MP, chair of the Committee, said: “It is almost eight years since our Committee questioned HMRC because its phone lines contained a message that was one of the most played pieces of music in the country.”

‘Our latest report on its performance sadly illustrates a continuing story of decline in its services. ‘Our report also raises serious questions about whether HMRC is striking the right balance between its civil and criminal processes.

‘Our findings show a sharp drop in the latter, at the same time as we see HMRC going to great lengths to challenge people in court over their employment status.

‘Our Committee has heard the frustration felt by the many contributors and organizations who provided evidence to our investigation loud and clear. HMRC would do well to do the same.”