Her Majesty’s Revenue and Customs (HMRC) has faced fierce criticism regarding the quality of its phone service after a recent report revealed that a significant number of taxpayers experienced extreme delays and disconnections while trying to reach the authority’s helpdesk. The report, produced by a committee of Members of Parliament (MPs), found that nearly 44,000 customers were cut off without warning after being left on hold for over an hour in 2023, with the problem exacerbated by an overwhelmed call-handling system.
The Public Accounts Committee (PAC), which compiled the report, expressed concern that these issues reflected a broader pattern of inadequate service provision by HMRC. It noted that the situation has only worsened over time and called for the tax authority to take responsibility for failing its customers. The report was issued ahead of the self-assessment tax returns deadline, a time of year when HMRC typically sees a surge in calls for support and assistance.
During the first 11 months of the 2023-24 fiscal year, 43,690 individuals seeking assistance on the phone were disconnected after an average waiting time of 70 minutes. According to the report, the issue stemmed from HMRC’s telephone system being unable to accommodate the volume of incoming calls. More troubling was the fact that customers were not informed when they were about to be disconnected, nor were they offered the opportunity for a call back. This led to an increasing number of frustrated taxpayers, many of whom were left without the help they needed.
Responding to the allegations, HMRC’s chief executive, Jim Harra, vehemently denied the PAC’s claims, calling them “completely baseless.” Harra emphasized that HMRC had been working diligently to improve its customer service, citing a reduction in the average wait time for calls by 17 minutes since April 2023. He further asserted that HMRC was committed to being available for taxpayers who require additional support and that improvements to the service were already underway. Harra also pointed to HMRC’s digital services, which he claimed have become increasingly popular, with more than 80% of customers expressing satisfaction with online options.
The report, however, did little to reassure MPs, who accused HMRC of deliberately degrading its services. Sir Geoffrey Clifton-Brown, MP and chair of the PAC, remarked that HMRC seemed to be “excavating its way to new lows” year after year in terms of customer service. He further suggested that the tax authority was strategically undermining its phone services as a policy to encourage taxpayers to use online services instead. This strategy, according to critics, may save HMRC money but leaves those without access to the internet or who are unfamiliar with digital platforms without adequate support.
In addition to the phone service issues, the report highlighted growing concerns about HMRC’s ability to effectively manage unpaid tax debts. The authority wrote off £5bn in uncollected debts in 2023-24, a substantial increase from the £3.2bn written off in 2022-23. MPs expressed alarm over the rising figure, calling for more rigorous efforts to reduce the amount of tax that goes uncollected. Furthermore, the report pointed to a decline in the number of criminal investigations and prosecutions related to tax evasion, urging HMRC to address what was described as a growing problem of tax system abuse.
The PAC report also stressed the need for HMRC to improve its understanding of the offshore tax gap— the difference between the taxes owed by individuals and businesses and those actually paid, especially in relation to cross-border transactions and international tax avoidance schemes. MPs argued that more attention needed to be given to these areas in order to tackle the wider issues of tax evasion and corporate tax avoidance.
The report follows a series of controversial decisions made by HMRC in the past year, including an announcement in March 2023 that the authority would temporarily close its phone line during the months of April to September. This decision was quickly reversed after a backlash from the public and MPs, who criticized the move as an attempt to further limit taxpayer access to essential services.
Despite these difficulties, Harra remained optimistic about HMRC’s future service improvements. He pointed to the authority’s continued efforts to modernize its systems and processes, which included the promotion of its digital platforms. These services, he claimed, were both faster and more efficient than phone-based assistance, making them an increasingly popular option for customers managing their tax affairs. According to Harra, over 80% of HMRC customers were satisfied with digital services, and the growing trend of taxpayers using online resources indicated a shift towards a more digital-first approach for tax administration.
However, as more taxpayers face issues with the accessibility of HMRC’s helpline, the question of whether digital services can fully replace traditional phone support remains a point of contention. Many of the people who rely on the phone lines for help may lack the digital literacy or access to the internet required to use online services effectively, leaving them at a disadvantage.
In response to these challenges, MPs have called for greater investment in improving the telephone system and a shift in leadership that places customer service at the forefront of HMRC’s mission. The PAC report called for “bold and ambitious leadership” to address the numerous problems outlined, including the increase in uncollected debts, the offshore tax gap, and the decreasing number of criminal investigations related to tax offences. The government will be under pressure to act on these recommendations to ensure that HMRC is better equipped to serve all taxpayers equitably and effectively.
As the self-assessment deadline approaches and the demand for HMRC’s services continues to rise, it remains to be seen how quickly the tax authority will implement improvements and whether it will be able to regain the trust of the millions of taxpayers who rely on its services each year.
