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HMRC service failures ‘mean 3m people may have paid wrong tax’

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Written by: Paloma Kubiak
25/05/2016
More than three million people may have paid the wrong amount of tax in 2014/15, a damning report into HM Revenue and Customs has found.

The National Audit Office (NAO) said HMRC got rid of too many staff members too soon before services were moved online.

This “led to a collapse in service quality” as average call waiting times tripled to 47 minutes for self-assessment callers during the deadline week for paper returns in October 2015, the report said.

Between 2010-11 and 2014-15, HMRC cut staff in personal tax from 26,000 to 15,000 as it planned to make ‘tax digital’.

The NAO said: “It introduced two new services, automated telephony and paperless self-assessment, in 2013-14. But demand for telephone advice did not fall.

“HMRC was over optimistic about the cumulative impact of the change and had not built sufficient contingency into its plans.”

The report said there was an increase in outstanding discrepancies in tax records requiring investigation – from 2.4 million in March 2014 to 4.6 million in March 2015 – and 3.2 million of these were flagged as high priority cases, “carrying a risk that employees will have paid the wrong amount of tax.”

Amyas Morse, head of the NAO, said: “HMRC’s overall strategy of using digitally-enabled information to improve efficiency and deliver service in new ways make sense to the NAO.

“This does not change the fact that they got their timing badly wrong in 2014, letting significant numbers of call handling staff go before their new approach was working reliably.

“This led to a collapse in service quality and forced a rapid expansion of headcount. HMRC needs to move forward carefully and get their strategy back on track while maintaining, and hopefully improving, service standards”.

Ruth Owen, HMRC’s director general for customer services, said: “We recognise that early in 2015 we didn’t provide the standard of service that people are entitled to expect and we apologised at the time. We have since fully recovered and are now offering our best service levels in years.

“Over the past six months we’ve consistently answered calls in an average of six minutes, and have launched new online tax accounts and webchat for everyone, enabling customers to manage their tax affairs wherever and whenever they want. There’s never been a better or more convenient service for our customers.”

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