Independent report is further evidence HMRC are struggling to keep up with demand

A new report by the body tasked with investigating complaints against HMRC is further evidence that the tax authority is ill-equipped to deal with the pressures on its services.


The Low Incomes Tax Reform Group (LITRG) added that the criticism of the way vulnerable customers are handled in the Adjudicator’s Office annual report should prompt a rethink within HMRC of their decision to temporarily shut down their self assessment telephone helpline, a decision LITRG believes will further hamper the efforts of unrepresented taxpayers to engage with the tax system.


While the Adjudicator’s Office report1 stated that it had received fewer complaints about HMRC in 2022/23 (950) compared to 2021/22 (1,029), the number of those that were upheld (either fully or partially) increased by 15%, from 32% to 47%, nearly half of all those it received.


Of particular concern to LITRG were the office’s findings that “Increasing numbers of customers, often vulnerable, are stuck in the complaints system for long periods with little or no meaningful response from HMRC”.


The report states that many of these customers have bypassed HMRC’s complaints process and turned to the Adjudicator for help, with financial and other vulnerabilities a ‘key motivating factor’ for their decision.


LITRG is also concerned that the scale of the challenge facing HMRC means that it may be failing to uphold some of its responsibilities contained in the HMRC Charter 2.


Joanne Walker, LITRG Technical Officer, said:


“It is becoming increasingly clear to us that HMRC are struggling to keep up with the demands being placed on their services and that it is those on lower incomes who are unable to afford professional tax advice that stand to lose the most.


“The Adjudicator’s report shows that while fewer people complained about HMRC in the past year, an increasing proportion of them are successful in their complaints, fuelling the idea that HMRC are failing to support taxpayers in their dealings.


“What is particularly concerning to us is the suggestion that a large number of vulnerable taxpayers are turning to the Adjudicator for help because they do not have confidence in HMRC’s processes.”


Joanne Walker continued:


“Recent developments, such as HMRC’s decision to temporarily close their self assessment telephone helpline and direct customers to HMRC’s online services for help, will only exacerbate these challenges and store up problems for the future.


“The Adjudicator’s report specifically recognises the potential of HMRC’s Charter to ‘drive radical change’ within HMRC, and indeed acknowledges that some parts of HMRC are embedding the Charter successfully. Unfortunately, this is not the case in the parts of HMRC with which most taxpayers interact.


“The temporary closure of the self assessment telephone helpline, in our view, breaks three of the seven Charter principles. To embed the Charter consistently and successfully across HMRC will require leadership and clear direction, and this decision sends the wrong message to HMRC staff and taxpayers.


“HMRC want people to interact with them online as far as possible and while that is laudable, our experience suggests that their digital services aren’t yet good enough and that customers are finding them difficult to interact with.


“We think HMRC need to invest in their telephone and post services while they get their online services to an acceptable standard that can meet taxpayer need. Otherwise, they are making it harder for taxpayers to comply with their responsibilities and making it difficult for their staff to be aware of taxpayers’ personal situations and be responsive to taxpayers.”