HMRC ‘degrading’ services and ‘eroding’ confidence, MPs warn
The UK’s tax authority is “degrading its own services as a matter of policy” and damaging the public’s confidence, a report by MPs into HMRC has warned.
Growing concerns have been raised about HM Revenue & Customs (HMRC) delivering poor customer service, which MPs claim is intentional, failing to pursue debts and reducing its prosecutions.
MPs on the influential House of Commons Public Accounts Committee (PAC) have warned HMRC’s “continual failings” have “eroded trust” in the organisation, via a report out today.
It comes as HMRC has been aiming to move to a digital-first service since 2010, but the report claimed it has been “too willing to let its telephone services fail” in a bid to force users to go online instead, with customer service deteriorating from last year’s record low, they said.
In 2023, helplines were closed after just two days notice was given, prompting outcry and forcing the authority to reverse plans to close them permanently in April 2024.
Committee chairman Sir Geoffrey Clifton-Brown said: “Unfortunately, we have a tax authority excavating its way to new lows in service levels every year.
“Worse, it seems to be degrading its own services as a matter of policy.”
But Jim Harra, permanent secretary and chief executive at HMRC, insisted the claims were “completely baseless” and said the service had made “huge improvements”.
HMRC service failings
In 2024, a PAC report warned that HMRC customer service was at an “all-time low”, with 62.7 per cent of callers in 2023-24 waiting more than ten minutes to speak to an advisor.
Average call waiting times now exceed 23 minutes, and just under 67 per cent of calls are actually answered, the new report found.
The service also cut off nearly 44,000 customers who had been waiting in the queue for 70 minutes without warning and did not call them back, MPs also found.
Compared to other organisations, the report added, HMRC has accepted it is “behind” in offering users a secure digital messaging service.
The PAC report found HMRC did not give customers enough consideration and failed to provide real-time call waiting information – but that a new phone platform would be procured.
They said telephone demand remained high, with 37m phone calls in 2023-24, and a lack of resources to deal with 3m more income tax payers thanks to frozen thresholds, while there was no “efficient means” of digital communication, with millions of letters still being scanned.
Large backlogs, delays and costs are still in play, with HMRC spending £68m on postage and print in 2022-23, and email still used “sparingly” due to security concerns.
A digital roadmap is being created, HMRC said, with plans for a HMRC App and a personal tax account in development, with investment being sought.
The report recommended customers needs – including small businesses – should be put first, as well as call waiting times and a callback service being prioritised; guard rails to protect customer services and meeting targets should be set up; a minimum telephone service level maintained; and secure digital file submissions and electronic messaging introduced.
Tax collection issues
Tax collection also needs to be improved, the MPs said, and HMRC should set out a plan for collecting debts before they expire, with some £5bn written off as uncollectable in 2023-24.
At worst, HMRC estimated it may not be able to collect some 45 per cent of money owed to the public purse, while MPs also said it was not doing enough to tackle deliberate non-compliance, and had an “implausibly low” estimate of the offshore tax gap at £0.3bn.
Sir Geoffrey described HMRC as “defensive”, and added: “Given citizens have no choice but to engage with HMRC, it has a responsibility to aspire to the highest standards of service.”
But he said there was “some hope”, thanks to new funding announced last year at the autumn Budget. He urged tax collectors to “pursue what’s owed”, reduce the gap in unpaid tax, recover older debts including those hidden offshore, and deter “criminal tax evaders”.
Harra said: “The committee’s claims about our customer service are completely baseless. In reality, we’ve made huge improvements to our service standards, with call wait times down by 17 minutes since April last year.”
He added: “We will always be there to answer the phone for those who need extra help.
“At the same time, more than 80 per cent of customers are satisfied with our digital services, with more and more people using them to quickly and easily manage their tax affairs.”