Taxpayers let down by poor HMRC customer service, report finds

Tax payers are being let down by HM Revenue & Customs (HMRC) poor customer service, according to a new report by the National Audit Office (NAO).

The report by the public spending watchdog found that HMRC’s telephone customer service is “not delivering” with an average wait time of nearly 23 minutes in first 11 months of 2023-24.

This is up from five minutes in 2018-19.

Customers cumulatively spent 798 years on hold waiting to speak with HMRC in 2022-23 – more than double the time spent waiting in 2019-20.

Advisers are taking more time on average to answer calls, and handle fewer calls than in 2019-20.

Many avoidable customer calls are caused by HMRC itself for reasons including process failures and delays, and customers chasing progress.

New digital services were found to have not reduced service pressures as much as HMRC expected.

Services

HMRC’s customer charter commits to supporting customers through a range of services, provided online, through written correspondence and over the telephone.

But the UK’s tax administrator is not expected to meet its telephone performance target in 2024-25 and has not made clear what level of service customers should expect.

Workload

While the total number of telephone calls has reduced, the total amount of time advisers are spending on each call has increased.

This means HMRC’s workload has reduced more slowly than reductions in call volumes.

More taxpayers hold multiple jobs, meaning they have less straightforward needs, while fiscal drag has also brought more people into the tax system.

With HMRC’s call-handling workload falling less than expected, it has not been able to make all the staff reductions it planned.

Due to budgetary constraints, it now needs to cut staff numbers by 14% in 2024-25, despite only achieving a 9% reduction between 2019-20 and 2023-24.5

Helplines

In March 2024, HMRC announced that it would restrict a number of its helplines, including closing its Self Assessment helpline for six months, to address both the funding pressures it faces and the backlog of queries.

HMRC reversed its decision one day after announcing the changes to the public.

The department had trialled closing and restricting helplines in 2023, but its evaluation of these changes did not consider stakeholder views or adequately assess the impacts of the changes on customers.

HMRC’s strategy is to encourage customers to turn to its digital services first so that queries can be resolved quickly online.

This is intended to cut costs servicing telephone calls and correspondence, as well as free up staff to serve people who need extra support.

The report found HMRC had not yet done enough to raise awareness of its digital services, increase customers’ confidence in using its online offering or understand how effectively these services meet customers’ needs.

Avoidable

The NAO recommends that HMRC develops more realistic plans for cutting the services it is replacing with digital channels and adopt a more customer-focused approach to encourage the take-up of new services.

HMRC should also reduce avoidable and expensive forms of contact, for example by increasing opportunities for customers to send correspondence and documentation through secure electronic networks and learn from the implementation of its digital projects.

Gareth Davies, head of the NAO, said: “HMRC’s telephone and correspondence services have been below its target service levels for too long.

“While many of its digital services work well, they have not made enough of a difference to customers, some of whom have been caught in a declining spiral of service pressures and cuts. HMRC has also not achieved planned efficiencies.

“HMRC must allow more time for these services to bed in and understand the difference they make before adjusting staffing levels.”

‘All-time low’

Meg Hillier MP, Chair of the Committee of Public Accounts said: “By law, taxpayers must engage with the tax system. But for its part, HMRC’s performance in picking up the phone to customers has hit an all-time low.

“Its digital by default approach is trying to force customers to engage online.

“But customers spent a total of 798 years waiting to speak to an adviser in 2022-23, more than double the amount in 2019-20. This shows there is still strong demand for a telephone service and that it is not good enough.

“HMRC must hear the frustration of taxpayers and make more realistic plans to improve customer service and deliver value for money.”

Satisfaction

HMRC says satisfaction with their digital services has consistently been above 80% in 2023-24.

But they say that in the last tax year they received more than 3 million phone calls on 3 things that can easily be done digitally – resetting an online password, getting a tax code, and getting a National Insurance number.

That’s almost 500 people working full-time to answer just those calls, spending an equivalent of 95 years on them.

An HMRC spokesperson said: “While customer service standards on our phone lines are still not where we want them to be, we’re making strong progress in our efforts to improve our customer service and additional funding has been confirmed by the government this week.

“Millions more people used our highly-rated online services last year – saving them waiting on the phone and freeing up our advisors to deal with those people who need extra support.

“We continue to encourage people to deal with us online or via the app where they can, and we are working to provide even better, easier and always-available online services. But, as we have recognised, these changes need to happen at a speed and in ways that our customers are comfortable with.”