New report lays bare HMRC customer service failings

A new report on HMRC service levels has laid bare the extent of customer service failings and the scale of cuts being asked of the tax authority, the Chartered Institute of Taxation (CIOT) has warned.

The report by the National Audit Office reveals that callers to HMRC spent a cumulative 798 years waiting on hold in 2022-23 – more than double that of 2019-20. The department is looking to move more callers away from helplines to digital platforms as it attempts to cut staff numbers by an unprecedented 14% in 2024-25. The NAO recommends HMRC develops “more realistic plans” for cutting services and adopts a more customer-focused approach.

Financial Secretary, Nigel Huddleston, announced earlier this week¹ that £51 million in additional funding would be provided to HMRC to improve customer helplines, but the CIOT has warned that this is just a small fraction of the annual £881 million net cost² of HMRC’s customer service directorate and is less than half of the savings the tax authority has agreed to make this year.

Richard Wild, CIOT Head of Tax Technical, said:

“The NAO report shows not just the extent of HMRC’s customer service failings but that of the cuts being imposed on it while the number of taxpayers and the complexity of their affairs is increasing.

“With the 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.

“Helping willing taxpayers to be compliant is a vital part of HMRC’s job. Unless and until automated digital services can be radically improved HMRC must be provided with the resources to provide all year round, well-publicised help and advice to taxpayers from a human adviser over phone and webchat.

“We are also concerned that HMRC seem to make their commitments on ‘efficiency savings’ in isolation, without properly engaging with their stakeholders to see whether they are sensible and will deliver the intended outcomes. We would welcome fuller engagement with HMRC over future plans.”