HMRC to cut access to phone lines by 30%

by | Aug 9, 2023

The tax authority plans to cut the use of phone-based tax advisers by 30% within two years as it struggles to cope with increasing demand and cuts to staffing budgets

HMRC chief executive Jim Harra said: ‘We want to reduce the volume of contact through phone and post by 30% by 2025 compared with 2021 to 2022, enabling many more customers to resolve their issues quickly and easily online, and freeing us up to help those who need extra support.’

Recognizing the level of criticism of HMRC services, particularly from accountants and tax advisers, Harra added: ‘We’re determined to do all we can to be responsive and to help customers get things right – but that has to mean migrating an ever-increasing number of our customers onto our digital services and away from our phone lines so we are in a much better position to provide specialist support to those that need it, while improving the customer experience.’

A 30% cut to calls means that the total number of calls to HMRC would fall by nearly 10 million a year from the current 38.3 million recorded for year end April 2022. HMRC also missed its performance targets with only 71% of calls to advisers answered and dealt with, well below the department’s target of 85%.

The latest HMRC annual report showed that ongoing cuts to budgets was putting immense pressure on service delivery, leading HMRC to take increasingly radical steps to improve performance and push more taxpayers towards using online web services, while the impact of the fiscal drag meant more people were being pushed into higher rate tax, which was resulting in more demand for experienced advisers to handle increasingly complex queries.

HMRC is faced with a nightmare scenario with increasing demand for more experienced advisers to handle calls from taxpayers with complex questions, while it is struggling to pay for enough call handlers and advisers, and is desperate to force people to use its website to answer questions. Meantime, HMRC is under pressure to reduce the 4.8% tax gap equivalent to over £36bn in lost taxes a year.

Harra said: ‘It’s true that 2022 to 2023 was a challenging period for us across many of our traditional phone and post services. Our customer base is growing, with more customers having increasingly complex needs.

‘For example, the number of higher rate taxpayers – who may need more active management in the system – increased by 17% between financial years 2015 to 2016 and 2022 to 2023 and is likely to grow further.

‘We’re also seeing more small business customers getting into tax debt, and the average value of customers’ debts increasing.

‘In addition, we face an ever tighter departmental budget, creating significant operational challenges for us. Put simply, it’s getting harder to meet our service standards using the same approaches that may have worked in the past.

‘In response, we’re driving forward vital changes to make us more efficient in serving customers and managing their compliance.

‘The key to doing this is through quicker and easier online services.’

The annual report also highlighted that there was increasing pressure on individual taxpayers and companies struggling to pay tax bills on time, with 912,000 taxpayers using time to pay arrangements to spread their tax bills over longer payment periods. This meant that £5.7bn of debt was wrapped up in time to pay, up from £5.4bn the previous year. HMRC noted that 90% of those signed up to time to pay settle their bills in full.

Integral to the future is investment in IT infrastructure, which Harra said needed to be ‘more secure and resilient, to underpin our online services. In the last year, we broke up our largest IT contracts into a range of smaller, service-focused ones. This was the culmination of many months of work and gives us greater access to the latest technology. We’ve also completed 62% of migrations from legacy data centers as we move to cloud-hosting’.

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