Tax office collects record-breaking revenues, but customer service levels remain below target
HMRC has announced record-breaking tax revenues for 2023/24 in its annual accounts – but the tax authority also reported poor performance across a range of its key customer service metrics, raising concerns over the continued decline in service levels.
Despite collecting £834.4bn in tax revenues – an increase on the £814bn collected in 2022/23 – the report exposes the extent of the issue, particularly across HMRC’s phone lines.
The tax authority has previously faced criticism from the Public Accounts Committee, most recently in February this year, when the parliamentary spending watchdog said service levels were at an “all-time low”.
Speaking in February, Dame Meg Hillier MP, Chair of the Public Accounts Committee, said its report posed “serious questions”.
Hillier also queried whether HMRC was “getting the balance right” in providing acceptable service levels and chasing tax revenue through “civil and criminal prosecutions” – including its pursuit of contractors and high-profile presenters for alleged IR35 non-compliance.
Such activity is part of HMRC’s continued focus on compliance activity, which continues to contribute to increased revenue collection.
A closer look at the numbers
The report’s summary section highlights the extent of the decline in service levels that taxpayers have faced when trying to contact HMRC:
- One in three phone calls to HMRC went unanswered, meaning the tax office answered fewer phone calls in 2023/24 than during the previous reporting year.
- Call wait times increased for the sixth year running, to an average of 23 minutes, up substantially from the 5 minutes in 2018/19.
- Thousands of callers suffered much longer wait periods, with 55,000 calls ‘timed out’ and automatically terminated after 70 minutes on hold.
While the report highlights many areas of concern, HMRC has also reported some uplift in its customer services, including improvements to correspondence processing times. Despite this, correspondence processing remains below target.
In a bid to reduce call volumes, and therefore improve service levels, the report explains some other initiatives and methods HMRC is exploring, such as further enhancing its digital offering.
This includes the introduction of a ‘Digital Assistant’ with a webchat function and helpline. HMRC says this move “allowed us to redeploy advisers to high-priority work”.
Question marks over HMRC meeting its legal obligations
The tax authority is governed by the HMRC Charter, a document which sets out its responsibilities – including being “responsive” in its dealings with taxpayers.
Writing in the foreword to the annual report, HMRC’s CEO, Sir Jim Harra KCB, said the body was “fully committed” to meeting its Charter obligations, but cited “serious challenges” over the 2023/24 reporting year. These included “financial pressures” and an increase in the number of taxpayers with “complex tax affairs”.
Harra also cited “frozen Income Tax thresholds”, which HMRC says is dragging more people into the tax system. This is also driving “increased customer contact and new compliance risks”.
He added that HMRC is “working hard to address these challenges”, and acknowledged that “these issues can only be addressed by working closely with customers, agents, intermediaries and other stakeholders”.
Harra concluded his foreword by saying he was “determined” to resolve the challenges and “build a trusted, modern tax and customs service that works for everyone”.
Not surprised, you could also add to this the number of letters they don’t reply to. I wrote last year to ask a question about expenses but never received a reply.