HMRC customer service issues may be affecting tax revenue

04 November 2015

According to the Public Accounts Committee's (PAC) sixth report on performance, HMRC still do not report on how much cash was received as a result of its compliance work or on the scale of aggressive tax avoidance which exploits loopholes in the law. HMRC also continues to avoid publishing information on the scale and nature of tax reliefs that would assist Parliamentary oversight of this area of the tax system.

The report goes on to say that the standard of customer service remains unacceptable and that the Committee is particularly disappointed by HMRC’s failure in this area given that people are more likely to pay the right tax when they find HMRC easy to deal with. PAC said that they are concerned that customer service levels are so bad that they are having an adverse impact on the collection of tax revenues.

The Committee also remain extremely concerned that HMRC’s work has led to too few prosecutions of individuals for tax evasion and that there is, therefore, no credible punishment to deter people from breaking the law in this manner.

In March 2013, the previous Committee concluded that HMRC had “an abysmal record on customer service”, having only answered 74% of telephone calls received by its contact centres during 2011-12. In 2014-15, HMRC responded to just 72.5% of calls and over the first half of 2015 this had fallen to 50%. The previous Committee considered that HMRC’s target of answering 80% of telephone calls within five minutes was “woefully inadequate and unambitious” and recommended that HMRC should set a more challenging short-term target for call-waiting times and a long-term target that is much closer to industry standards. HMRC has consistently refused to set more demanding targets, however, and in 2014-15 it answered only 39% of calls within five minutes.

HMRC did not provide the Committee with any indication of when or by how much its customer service would improve, beyond a vague aim to improve year on year. It acknowledged that people are more likely to pay the right tax when they find HMRC easy to deal with, but, in the words of its own Chief Executive and Permanent Secretary, “we are still struggling”.

CIPP comment Can we expect more of this type of service as the government continues its departmental cuts? Surely it is about time that HMRC was ring fenced from any more cuts to allow them to provide the level of customer service require, which will ultimately result in an increase in tax revenue.