HMRC & the Helpline

HMRC left almost a million calls unanswered in January, figures show, with the average wait time to speak to a tax adviser exceeding 25 minutes for the first time. Yet despite this HMRC announced that they planned to close the Self-Assessment helpline for six months. Subsequently when HMRC chief executive Jim Harra was grilled by the Treasury Select Committee over the plans to close helplines, he said the tax authority didn’t have the funding to deploy more helpline resources. HMRC’s Angela MacDonald also told the Treasury Select Committee in June 2023 that the decision to adopt a seasonal telephony model was a result of the “challenging level of efficiencies required by the spending review 2021 settlement”, where only limited funding was assigned to them to spend on enhancing their digital services.

A report found that during a trial of the closure last year, around 113,000 callers were told they could find the answers they needed online. However, 61% of these taxpayers called back for help within five days. The Chair of the Treasury Select Committee said: “The idea that HMRC can interpret those figures as justification for making it even harder to contact them over the phone indicates something is seriously wrong at HMRC.” Following the merger of Customs and Excise and the Inland Revenue in 2005 10,500 jobs were cut. At the time the Chartered Institute of Taxation said it was sceptical that the Government could reduce staff this much, “without affecting operational efficiency and customer service. Unfortunately the scepticism was fully justified.

It appears that on 20 March the Chancellor intervened to prevent HMRC from shutting down its helpline for six months a year. HMRC chief executive Jim Harra said, “We've listened to the feedback and we're halting the helpline changes as we recognise more needs to be done to ensure all taxpayers' needs are met, whilst also encouraging them to transition to online services''.

The Head of the Low Incomes Tax Reform Group appeared on the BBC to discuss the U-turn over the closure of HMRC helplines. She said public backlash may have played a part in the reversal of the decision, stating, “I certainly saw a lot more reaction from the public on social media and that maybe tipped the decision to reverse it. I think it’s the right decision, we’ve been saying for some time that HMRC’s customer service is not at the level it needs to be.”

In a 1990s document HMRC aimed to answer calls “within 30 seconds and achieved this 88% of the time”. Today, 63% wait over 10 minutes to speak to an adviser, with an average wait time of 25 minutes on the Self-Assessment helpline. This enormous decline is, in spite of or perhaps, because of the need to keep up with the complexity of the UK's tax system, which has increased dramatically during that period and is now the longest tax code in the world.

A report by the National Audit Office (NAO) had found that waiting times to speak with HMRC on the phone have doubled between 2019/20 and 2022/23, with taxpayers spending a total of 798 years (or 7 million hours)—on hold. It commented that HMRC’s customer service was in a “declining spiral”.

The chair of the Public Accounts Committee said HMRC needed to have a ‘more realistic’ plan for dealing with wait times. Commentators said the report painted “a sorry picture of a service in serious decline”. HMRC said it was making “strong progress” in improving customer services.

This resulted in HMRC being warned again on poor customer service by scathing MPs and tax experts alike. MPs have demanded a “radical” improvement to HMRC after the report by the spending watchdog concluded it was failing the public.

As a result of this report and the publicity given to failings HMRC has received ￡51 million in additional funding to improve service levels for taxpayers. The additional funding is aimed at improving telephone helplines, with Financial Secretary Nigel Huddleston saying that while many tasks "can quickly and easily be completed online or via the HMRC app," the money'' means that everyone can rest assured there will be someone at the end of the phone, ready to speak.

The ￡51m is however a small fraction of HMRC’s customer service budget, and so needs to be spent efficiently to reduce the struggle taxpayers and their agents are currently experiencing to do business with the current phone services.

The extra funding will help the tax department to achieve the performance standards its customers expect, the Treasury said. It's expected to aid the productivity of small businesses, as they will not need to spend as much time waiting on the phone to manage their tax affairs.

Financial Secretary to the Treasury Nigel Huddleston said, “People sometimes think that managing their tax is daunting – but it doesn’t have to be, which is why I’m fully committed to providing HMRC with the resources it needs to meet the needs of all its customers.

“Many tasks can quickly and easily be completed online or via the HMRC app, but today’s funding means that everyone can rest assured there will be someone at the end of the phone, ready to speak.”

Jim Harra said, “We remain committed to expanding our online services, and encouraging customers to go online where they can, as we strive to deliver good services as cost-effectively as possible. But we recognise this must happen at a pace the public is comfortable with".

“This additional funding will enable us to improve our helpline service for those who need to speak to us – including the vulnerable and digitally excluded - making sure they get the support they require.”

Although many people prefer speaking to someone over the phone, HMRC estimates that around two-thirds of all Self-Assessment calls can be dealt with online instead of by telephone. Apparently HMRC received more than three million calls on three issue that could have been resolved digitally last year; resetting an online password, obtaining a tax code, and finding a National Insurance number.

HMRC has nevertheless reiterated its strategy is to move customers to online services, so its phoneline advisers can focus on helping people who need to speak to someone and operating more cost-efficiently. The Treasury stated that the use of HMRC's online services has increased "considerably", with its online accounts and mobile app accessed almost 250 million times in 2023/24.

The problem of contacting HMRC has only worsened as more people have been brought into the tax net as a result of inflation and fiscal drag, while HMRC’s resources have been squeezed. These new taxpayers are, by their very nature those not always conversant with the internet and not used to dealing with tax and their first reaction after receiving a demand or letter they cannot understand is to, “ pick up the phone.”

The reality of long wait times on HMRC helplines has become an ongoing frustration for taxpayers and agents and a frequent complaint on the Any Answers Forum.

The professional bodies have routinely called on the Chancellor before Budgets to invest in HMRC service levels. Last March, a group of professional bodies signed an open letter calling for more investment to sort out the “unacceptably low level” of customer service.

The Head of Tax Technical at the Chartered Institute of Taxation said, “We are pleased the government has recognised that HMRC need additional resources to improve its customer service, particularly its phone lines which have been underperforming for many years. HMRC’s service levels continue to be the single greatest concern expressed by our members, and our surveys tell us that it is making it harder and more expensive to do business, and damaging trust in the tax system.”

“From the perspective of agents, the current digital provision is not up to scratch. Agents would love to do more online for their clients and we look forward to working with HMRC to identify gaps in their services and help that transition.”

Summary

Unfortunately, the significant telephone delays are only part of the problem and they are in some part a result of a failure in other forms of contact with HMRC. If you are awaiting a response from HMRC to a letter sent some time ago you may be concerned as to the delay or indeed concerned that it did not reach them. Except in limited circumstances it is not possible to correspond with HMRC by email so you have no alternative but to telephone.

There ought to be a record on the taxpayer’s individual account of recent correspondence, maybe with a date it is due to be answered, to alleviate the need to contact HMRC by telephone.

With a much greater number of people being brought into the tax net more needs to be done on the education and publicity side. For example, the consequences of higher interest rates and stagnant allowances could be spelled out as this must be the main reason taxpayer numbers are increasing. Not everyone reads the weekend financial press. Otherwise those confused will not engage with the system and this creates much bigger issues down the line with fines and interest charges being imposed. Maybe a lenient approach to transgressions caused by a lack of understanding would be a good start.