HMRC performance turnaround is no small feat

In the months leading up to the publication of HMRC’s annual accounts, it is customary for the publication of its performance level statistics to be paused. 

Any respite from scrutiny this year has been short-lived however, with the recent National Audit Office (NAO) report on 15 May concluding ‘HMRC’s telephone and correspondence services have been falling below the expected service levels for too long, and HMRC has not achieved planned efficiencies’.

Since then, HMRC has updated its ‘Standard for Agents’ on 17 May 2024. This broadly outlines that HMRC expects all tax agents and advisers to act as if they were members of professional bodies, and subject to their code of conduct, even if they are not. That is a development that will be welcomed by many in the tax profession but there is some irony that it comes at a time when HMRC’s own customer service standards have fallen so low.

HMRC will be hoping to address some of its underperformance issues by deploying the £51m of additional funding recently committed by the government. Recent feedback from some of RSM UK’s staff members who regularly deal with HMRC highlights some of the challenges ahead, with recent issues including:

• waiting times of up to and over an hour during busy periods;
• the cancellation of calls, seemingly on an automated basis in some instances; and 
• service levels on tax agent helplines not being at the expected level, leaving tax agents unable to properly support their clients.

Whilst investment into additional staff resource will hopefully ease some of these issues, the longer-term answer is expected to be the use of more technology to assist taxpayers.

HMRC’s digital services, particularly their online chat function, can be very effective when they are running properly. There are other instances however when digital automation is not as helpful and is actively causing issues.

One recent illustration of this involves a company who had made its tax payments but had them incorrectly allocated against its tax liabilities. This resulted in around £250 of interest being charged by HMRC in error. Delays in dealing with correspondence have meant that instead of correcting the issue, HMRC has passed the matter on to a debt collection agency who are now demanding a higher amount. 

Situations like this are a waste of time and source of frustration for all involved but are unfortunately more common than they should be. Call waiting times can be a real issue for taxpayers, particularly over the winter. However, the focus should not just be on the phone lines as it is the delay in dealing with correspondence that can really prove a thorn in taxpayers’ sides and may in turn result in more calls to HMRC’s helplines.

Examples of such delays include a client who made a complaint to HMRC regarding alternative dispute resolution (used to settle a tax dispute), which was acknowledged by HMRC but said it would take at least 16 weeks for a response. In another case, HMRC informed the taxpayer it had understated the amount of late interest it said was due, and they would need to pay up more in interest, but six months later, they are still waiting for HMRC to explain why the additional late interest is due.

It’s clear a long-term plan that tackles all aspects of HMRC’s interactions with taxpayers is needed.