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HMRC admits major Customer Service failure

June 26, 2015

In an honest appraisal of its own performance that has been welcomed by some accountancy commentators HMRC has admitted a significant failure of performance responding to taxpayer telephone calls. HMRC released figures that showed it had failed to answer 18 million calls from taxpayers and their appointed agents. Lin Homer the head of HMRC acknowledged HMRC’s call performance had “not been up to scratch” apologising to “those customers” affected.

The data, put out in an HMRC press release, showed more than a quarter of phone calls to HMRC in the last 12 months went unanswered. Of 64.7 million telephone calls made by taxpayers between April 2014 and March 2015, 27.5% – 17.8 million – were either unanswered or got a busy tone.

HMRC’s target is to answer 80% of calls. However, the figures show that in some months about two in three (65.5%) of phone calls were answered. In September 20.8% of people heard busy tones and could not join a phone queue when they called, while 13.7% of calls were not answered. In total 7.2 million calls made to HMRC last year - 11% of all calls - ended with people hearing a busy tone.

The failure to meet its own target comes despite HMRC’s previous investment in new telephone systems and online alternative channels for communicating with HMRC.

In a move timed to coincide with the press release HMRC simultaneously announced plans to devote increased numbers of call centre staff to deal with the problem, pledging to invest £45m in about 3,000 customer services staff. 2,000 HMRC staff will be moved temporarily from within the HMRC to assist with the tax credits renewals deadline and letters and forms. These measures amounting to an additional £45m investment in its capacity to deal with taxpayer contacts will come from existing HMRC budgets rather than from new Treasury funding HMRC confirmed.

While welcoming the announcement of additional HMRC staff to alleviate the problem, Paul Aplin, chair of ICAEW's tax technical committee, says new HMRC staff will not solve HMRC customer service problem. Mr Aplin has recently called for a review of HMRC 10 years after its creation with the merger of the Inland Revenue and HM Customs & Excise.

The admission from HMRC of its poor performance comes at a critical time for HMRC and Government. What these latest call handling statistics highlight is there has been no reduction as yet in the number of HMRC ‘customers’ needing to contact HMRC at a time when it is increasingly seeking to automate more and more of the tax reporting and notification obligations of individuals and businesses.

It is a reasonable expectation that over time the move to digital tax services by default will result in a reduction in the still very large numbers of customer contacts by phone. This after all is the intention of HMRC’s strategic plan and Government’s expectation for the delivery of public services more widely.

However, if over time there is no digital dividend and the volume of contacts from taxpayers and accountants does not reduce, then presumably commentators may ask if the digitisation of tax services is not actually the cause of the need to contact HMRC by telephone in the first place. Are stubbornly high numbers of ‘customer’ contacts from taxpayers actually the result of digital errors arising from the challenge of automating highly complex tax reporting such as PAYE?

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