Customers spent a total of 798 years on hold waiting to speak with HMRC in 2022/23 – more than double the time recorded in 2019/20.
Meanwhile, the average wait time for customers stood at 23 minutes in the first 11 months of 2023/24, up from the five minutes in 2018/19 , according to the National Audit Office (NAO).
Its damning report on the tax collector’s customer service stated that “HMRC and customers have been caught in a declining spiral of service pressures and cuts”, with the department “unable to cope with telephone demand” and “falling short in processing correspondence”.
In 2022/23, HMRC spent £881m on customer service, but the NAO said “performance has been below expected levels for telephone and correspondence for almost all of the last five years”.
It added that to achieve value for money, “it must provide a timely and effective service for customers needing help with their tax or benefits, even as it attempts to reduce costs”.
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Digitisation at the detriment of customers
In a bid to cut costs servicing phone calls and correspondence, and free up staff to serve people requiring extra support, HMRC has adopted a ‘digital-first’ stance.
However, the NAO said its approach to cutting services as it introduces digital solutions has been “too aggressive”, adding that taxpayers “have been let down”.
Further, “HMRC has 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”, it wrote.
The NAO report explained there are 34 million individual taxpayers in the UK, five million business taxpayers and seven million families in receipt of benefits and credits administered by HMRC.
While it “makes sense” to replace traditional forms of contact with digital services, “they do not currently allow customers to resolve more complex queries”.
It suggested the move to a digital service hasn’t had the desired effect, as it hasn’t eased the pressure on traditional services.
In fact, advisers are taking more time on average to answer calls, and handled fewer calls than in 2019/20.
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.
“Many avoidable customer calls are caused by HMRC itself for reasons including process failures and delays, and customers chasing progress”, the NAO noted.
In a bid to “catch up” and encourage people towards its digital service, HMRC decided to close phone lines, which was met with severe backlash, resulting in a U-turn on the decision.
‘Below target service levels’
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.”
‘We’re making strong progress’
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 advisers 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.”
