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HMRC’s admit their service is poor

In recent months HMRC’s average call wait time has seesawed between 15 and 20 minutes and they have failed miserably to meet the pre-Covid target of less than five minutes. The tax department has made some progress in improving its customer service levels but acknowledged that some of the levels “aren’t where we want them”. This is according to HMRC performance update which was released earlier this month.

Echoing the apologetic tone in its annual accounts, HMRC said that it started the new financial year in a better position than in 2021 to 2022 and has apologised that its levels of service have fallen well below expectations it had promised, with their spokesman publicly stating: “We’re sorry to customers and accountants who have been affected.”

HMRC admit their service is poor: Long wait times

HMRC’s service levels have been routinely criticised in accountancy forums, with users complaining of long wait times, with the accountancy professional bodies raising concerns about the poor service. “The impact on individuals and businesses of these delays is considerable,” the tax bodies said in a joint letter.

Watchdog The Public Accounts Committee (PAC) was equally scathing about HMRC’s service levels recently saying, “Yet again customer service has collapsed and HMRC’s recovery plans are not clear.” Although the average wait times on HMRC helplines have seesawed throughout the year, with callers waiting 14.49 minutes in March, 18.51 minutes in April and 19.48 minutes in May, there were signs of improvement by the end of June when the number fell to 13.10 minutes.

As highlighted by PAC, the average caller wait times in the fourth quarter of 2020–21 was over 15 minutes – which far exceeded the less than five minutes callers had in 2017–18. Meanwhile, service levels have continued to teeter elsewhere. The performance update highlighted that the promised correspondence turnaround within 15 days had dropped dramatically, with HMRC admitting that they had only dealt with 75% of the correspondence within 40-days in the month of June.

HMRC admit their service is poor: Service problems

HMRC claimed that the up and down service levels in the first quarter, was because it was a busy period. What a surprise! You would think that with the tax return deadline being the 31st January, as it is every year, that they would and should have allocated more resources.

They also claimed that some of the delays were due to extremely high volumes of repayment claims, which at 90% higher than usual, were mostly due to working from home expenses. HMRC then admitted that during this period, it had diverted resources to upgrade its IT system security, which of course beggars the question, why not wait until the summer, its quietest period!

Looking at the road ahead, HMRC struck a pessimistic tone. “We expect to see continuing pressure on our services for some time, but we’re maintaining service levels across most areas of our business and we’re focused on trying to deliver improvements for our customers in the remaining quarters of the year.”

HMRC also faced the pressures of trying to reduce the stock of correspondence built up during the pandemic. It even had to reduce the VAT helpline to four days a week from January to March to work through the backlog. This reduced the level from its peak of 3.3m items in July 2021 to 1.9m by the end of the financial year – which is around four weeks’ work.

“Given the volume of post we receive (around 2 million items), it’s normal for us to have this level on hand at any given time,” said HMRC.

HMRC admit their service is poor: Debt balance improves

HMRC did manage to claw back its overdue debt balance, from a peak of £72bn in 2020, largely due to Covid, to £39nbn by January 2022. However, since then the debt balance has started to build again, increasing to just over £42bn by the end of June. Although HMRC pointed out that this is still £8bn lower than the same time in 2021.

In fairness to HMRC, the growth of the debt balance was down to a number of factors caused by the pandemic, including a pause of debt chasing activity, the government’s Covid intervention and the deferral of VAT and self-assessment payments from the first quarter of 2020 for one year.

While emerging from the pandemic has helped the debt balance, HMRC recognised that taxpayers are entering more economic turmoil driven by supply-chain pressures and cost-of-living rises, which will affect some people’s ability to pay. “These challenging economic conditions may last beyond 2023 to 2024, so we expect the debt balance to remain broadly static through 2022 to 2023, with initiatives to reduce it having an impact during 2023 to 2024 and future years,” they said.

Tax Accountant’s view

I had a distinct feeling of déjà Vu when writing this Blog and scanning back over the last few years of Blogs it is clear that following stinging criticism of its debt collection and service levels (usually by Meg Hillier Chair of the Public Accounts Committee) there is usually a temporary improvement before, once again, the rot sets in.

I for one think it’s about time that HMRC got its house in order, but I’m not holding out much hope.