The National Audit Office found that HMRC’s quality of service provided to personal taxpayers ‘collapsed’ in 2014/15 and the first seven months of 2015/16.
During this period, call waiting times tripled, as HMRC began moving personal taxpayers online and the number of personal tax staff fell from 26,000 to 15,000. According to the NAO’s latest report, The quality of service for personal taxpayers, HMRC misjudged the cumulative impact of this online transition, as demand for telephone advice did not fall. HMRC subsequently recruited more than 3,000 additional advisers to fill the gap.
The NAO estimates that the overall cost incurred by customers calling the taxes helpline, taking into account both the cash cost of calls and the economic cost of time on the phone, increased from £63m in 2012/13 to £97m in 2015/16. This represents an increased cost to customers of £4 for every £1 saved by HMRC over the period.
However, an NAO survey of customers using HMRC services found 58% rated it as good or excellent, 21% as average and 21% as poor or terrible.
HMRC has responded to the report, saying there have been ‘significant improvements since then’. Ruth Owen, HMRC’s director general for customer services, said: ‘Over the past six months, we’ve consistently answered calls in an average of less than six minutes.’ She added: ‘There’s never been a better or more convenient service for our customers.’
Several experts commenting on the report have warned of a potential adverse impact on future HMRC service levels as HMRC proceeds with its digitalisation of tax plans.
John Cullinane, CIOT tax policy director, said: ‘This report sets out starkly what happens when government makes over-ambitious assumptions about the speed with which savings from digitalisation can be realised and cuts staff prematurely. There is a lesson here for HMRC’s future digitalisation plans. “Making tax digital” promises significant potential benefits, but HMRC’s resources should not be cut further in anticipation of this before the cost-savings that digitalisation promises are actually being delivered.’
Meanwhile the Association of Taxation Technicians (ATT) called for a government rethink on HMRC resourcing. Calling for a 'thorough review of HMRC resourcing', ATT president Michael Steed said that an inadequately funded and inefficient operating tax system affects everyone. 'It is imperative that HMRC ensures that a well-functioning and well-informed service to personal taxpayers is in place before it goes further with digitalisation. A digitally distracted HMRC is focusing so much on the projects related to the future delivery of services that it has evidently been paying far too little attention to the here and now.'
James Hender, partner at accountancy firm Saffery Champness, said: 'There may be more difficult times to come as the digitalisation drive gathers pace, with there being real concerns from taxpayers about how and when they set up their digital accounts and, particularly for small businesses, how they pay their taxes on the new quarterly basis without it having a significant negative impact on their cash flow. HMRC is consulting on this but the concerns that many taxpayers have will no doubt be amplified by today’s findings.
'Taxpayers lives do not run in neat, straight lines and often they need to be able to speak to another human who can actually assist them', Hender added. 'HMRC’s rush, however well intentioned, into digital systems is let down by the fact that there are now too few well trained people to give the assistance that taxpayers deserve.'
Anthony Thomas, chairman of the Low Incomes Tax Reform Group (LITRG) said: 'The NAO’s fair and balanced report demonstrates beyond doubt that if you cut resources too deeply and too fast, the quality of customer service will suffer. We highlighted this to HMRC at the time of its cuts. It is just as important, if not more so, for HMRC to maintain a service that will satisfy the compliant majority, and keep them compliant, as to focus its resources to counter tax avoidance and evasion, an activity that has attracted extra investment.
'It is good news, though, that HMRC believes it is once again on track to deliver a better customer service following more investment', Thomas said. 'We can but echo the NAO’s warning not to allow future budget cuts to reverse that trend which would be a worrying development with "making tax digital" high on its agenda.'
The National Audit Office found that HMRC’s quality of service provided to personal taxpayers ‘collapsed’ in 2014/15 and the first seven months of 2015/16.
During this period, call waiting times tripled, as HMRC began moving personal taxpayers online and the number of personal tax staff fell from 26,000 to 15,000. According to the NAO’s latest report, The quality of service for personal taxpayers, HMRC misjudged the cumulative impact of this online transition, as demand for telephone advice did not fall. HMRC subsequently recruited more than 3,000 additional advisers to fill the gap.
The NAO estimates that the overall cost incurred by customers calling the taxes helpline, taking into account both the cash cost of calls and the economic cost of time on the phone, increased from £63m in 2012/13 to £97m in 2015/16. This represents an increased cost to customers of £4 for every £1 saved by HMRC over the period.
However, an NAO survey of customers using HMRC services found 58% rated it as good or excellent, 21% as average and 21% as poor or terrible.
HMRC has responded to the report, saying there have been ‘significant improvements since then’. Ruth Owen, HMRC’s director general for customer services, said: ‘Over the past six months, we’ve consistently answered calls in an average of less than six minutes.’ She added: ‘There’s never been a better or more convenient service for our customers.’
Several experts commenting on the report have warned of a potential adverse impact on future HMRC service levels as HMRC proceeds with its digitalisation of tax plans.
John Cullinane, CIOT tax policy director, said: ‘This report sets out starkly what happens when government makes over-ambitious assumptions about the speed with which savings from digitalisation can be realised and cuts staff prematurely. There is a lesson here for HMRC’s future digitalisation plans. “Making tax digital” promises significant potential benefits, but HMRC’s resources should not be cut further in anticipation of this before the cost-savings that digitalisation promises are actually being delivered.’
Meanwhile the Association of Taxation Technicians (ATT) called for a government rethink on HMRC resourcing. Calling for a 'thorough review of HMRC resourcing', ATT president Michael Steed said that an inadequately funded and inefficient operating tax system affects everyone. 'It is imperative that HMRC ensures that a well-functioning and well-informed service to personal taxpayers is in place before it goes further with digitalisation. A digitally distracted HMRC is focusing so much on the projects related to the future delivery of services that it has evidently been paying far too little attention to the here and now.'
James Hender, partner at accountancy firm Saffery Champness, said: 'There may be more difficult times to come as the digitalisation drive gathers pace, with there being real concerns from taxpayers about how and when they set up their digital accounts and, particularly for small businesses, how they pay their taxes on the new quarterly basis without it having a significant negative impact on their cash flow. HMRC is consulting on this but the concerns that many taxpayers have will no doubt be amplified by today’s findings.
'Taxpayers lives do not run in neat, straight lines and often they need to be able to speak to another human who can actually assist them', Hender added. 'HMRC’s rush, however well intentioned, into digital systems is let down by the fact that there are now too few well trained people to give the assistance that taxpayers deserve.'
Anthony Thomas, chairman of the Low Incomes Tax Reform Group (LITRG) said: 'The NAO’s fair and balanced report demonstrates beyond doubt that if you cut resources too deeply and too fast, the quality of customer service will suffer. We highlighted this to HMRC at the time of its cuts. It is just as important, if not more so, for HMRC to maintain a service that will satisfy the compliant majority, and keep them compliant, as to focus its resources to counter tax avoidance and evasion, an activity that has attracted extra investment.
'It is good news, though, that HMRC believes it is once again on track to deliver a better customer service following more investment', Thomas said. 'We can but echo the NAO’s warning not to allow future budget cuts to reverse that trend which would be a worrying development with "making tax digital" high on its agenda.'
