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HMRC in meltdown as self-assessment deadline looms

HMRC’s customer service is on the verge of collapse due to delays dealing with online tax returns

Customer service at HMRC is at risk of being completely overwhelmed just a fortnight before the 31st January tax deadline – a time when taxpayers need the most support.

Waiting times for callers have nearly tripled since 2019, according to government data, with much of it caused by delays in dealing with online tax returns, which has created a huge backlog.

While many freelancers, contractors and self-employed workers have already submitted their self-assessment tax return, 5.4 million (out of 12.1 million) are still due to file it this month and calls to the taxman are expected to reach unprecedented levels.

In November 2020, wait times for calls increased to 12 minutes 45 seconds, up three minutes on October and almost three times as long when compared to November 2019.

HMRC faces renewed calls to extend tax deadline 

Despite a drop in the number of requests submitted to HMRC, only half (47.4%) were turned around within seven days in November compared to 76.6 per cent in October and 94.4 per cent in November 2019.  

Professional accountancy bodies and experts have called again on HMRC to extend the 31st January deadline, amid concerns about the taxman’s ability to cope. This is in addition to the added pressures businesses, accountants and the self-employed are facing because of the pandemic.

HMRC previously rejected this plea stating that moving the tax deadline would “complicate things”.

COVID-19 has had a profound impact on many people working for themselves, meaning they may not be able to pay their tax bills. Millions of self-employed workers have lost income and have had to rely on their savings in a bid to survive, having failed to qualify for the government support schemes. 

Many self-employed facing ‘bumper tax bill’

Alasdair Hutchison, Policy Development Manager at self-employment trade body, IPSE, said: “2020 was a financially devastating year for the self-employed and their end of year tax bill will only add to their financial woes. 

“This tax payment will be particularly hard to make for the estimated 1.5 million self-employed people who missed out on the SEISS and have now been without support for nearly a year. Not only that but many of the self-employed will be facing a bumper tax bill this January if they deferred their July self-assessment payment last year while struggling without income.

“We urge the government to do the decent thing and adopt a more lenient approach to self-employed taxes. In these extreme and unprecedented circumstances, it should certainly not penalise late payment of taxes owed, which would only feel like another kick in the teeth after a difficult year.”

Accountants too have had to navigate the changing rules around government-backed grants and loans for their clients, while also dealing with their regular work. Add to that people falling ill with Coronavirus or taking care of family members, which has made things even more difficult.

Appealing against late penalties simply ‘adds to the workload’

The problems faced are expected to lead to a rise in the number of tax returns filed late and subsequently the number of appeals, which will only add to HMRC’s workload.

Helen Thornley, Technical Officer at the Association of Taxation Technicians, told The Times: “We want greater understanding about the unprecedented pressures that accountants and tax advisers are under at the moment. Asking agents and their clients to appeal against penalties simply adds to the workload in February and March.”

A spokesperson at HMRC. said: “Like other service organisations, we have been impacted by the pandemic and we’re doing all we can to offer the best possible service to our customers, whether it’s supporting them with their taxes or delivering the government’s support schemes. 

“Wait times on some of our helplines are longer than we would like, and we’re sorry about the inconvenience this causes to customers at busy times. Our digital services are available 24 hours a day, and customer satisfaction for them is very high, so we encourage customers to go online where they can.”

By Contractor Weekly

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7 thoughts on “HMRC in meltdown as self-assessment deadline looms”

  1. Paul Hill

    So, its approaching the deadline for submitting self assessments. Nothing new here, it happens EVERY year, so why are CW making a big deal of it (as usual)?
    Of course it will get busy, because all those people who decided not to sort out their tax affairs during the last 9 months have decided to leave it until the last minute!
    Covid affects staffing levels, not just for HMRC but all businesses, so even more reason why the self assessments should have already been submitted and not left until now!
    You can’t blame HMRC for people being lazy!

    • SJ

      What kind of statement is this!
      Didn’t you read in the article that a huge number of the self employed differed taxes because they weren’t working and were concentrating on survival without any assistance at all?

      Now they can’t pay and will need assistance from the HMRC simply because 1) they haven’t had any income 2) they had no assistance
      3) deferred taxes are also due

      Everyone else had assistance but they did not!
      IR35 also had an effect on contractors in regards to companies not only suffering but reducing head counts. Brexit did not help either.

      It is a very worrying time and your statement is not constructive but knocking people whilst they are already down.
      If you want to help give a positive point of view rather than a lazy one and some good ideas!

    • Gary Andrews

      Yes this article explains how (heavily taxed) freelancers have now been screwed in every posible way. Government have cynically withheld assistance. The failing, abusive HMRC are unable to do their admin job but still want paying in full for what is now 2 years’ worth of taxes.

      In this new Britain expect to be held up, made to queue then be charged £50/hr for the privilege.
      No one knowledgeable with this environment is cheerleading HMRC.
      Like the government as a whole, they think they can brush every problem under the carpet with PR and lies.

  2. IR35 Victim

    I cannot honestly say I have any sympathy for HMRC.

    My business has been destroyed fortunately I have paid my tax but that will be end of it.

    IR35 reduced me from £100k turnover to £0 and all the work was shipped offshore.

    I now receive UC so now a taker rather than a payer.

    Top result HMRC.

  3. No Future

    You and me both mate. My turnover was about £90K of which the taxman took £15K VAT before the accountant even started hacking off both NI s,income tax, corporation, dividend tax and the like. Im on universal credit too now so dont need to bother with all that bollox anymore.

  4. Philip Wade

    The perfect storm! No doubt reduced staff due to COVID, plus dealing with the “red tape” (which we never had before, though if you a devotee of the Right Wing press was one of the reasons to leave EU lol) associated with Brexit. Topped off with IR35 – another unnecessary bit of nonsense which should be binned.

  5. JoJo San

    HMRC operates without elected Government oversight… it is NOT a democratic org voted in by ‘we the people’… period

    It has a ‘civil servant’ midset… can’t change light bulb culture

    It is administered by ‘jobsworth’ ‘never done anything’ wasters that have no experience of real life

    Bombastic, arrogant, beuraucratic, thoughtless, mindless ‘tick boxers’

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