Toxic Taxman Slammed Before Returns Season

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The Public Accounts Committee has slammed HMRC on several fronts just before tax return season when tax payers are desperate for help. It has been accused of offering a deliberately poor service and damaging public confidence. 

HM Revenue & Customs’ already poor service to taxpayers has become even worse according to the Committee. The PAC has urged the tax authority to take responsibility for how it has failed its customers and to act with greater boldness to tackle tax system abuse and to more effectively pursue the debts it is owed.

All time low

In 2024, a PAC report warned that HMRC’s customer service levels had reached an all-time low. This decline of six years has continued, with 66.4% of customers’ attempts to speak to an adviser answered and average call waiting times exceeding 23 minutes.

Written evidence to this year’s PAC inquiry paints a picture of the tax authority’s continual failures now eroding trust in the system, with the report warning that services are set to deteriorate further if HMRC struggles to meet further increases in demand from customers.

Hanging on the telephone

The PAC is concerned that HMRC has degraded its own phone services – willing to let them fail, in the hope that people will be forced to go online. HMRC has said that encouraging customers to switch to digital frees up its lines for vulnerable people and more complex cases. But the report warns that phone access has been restricted before digital services are ready. It further notes that not all services are available online and do not offer the reassurance people need, with HMRC accepting to the PAC’s inquiry that it is behind many other organisations in providing customers a secure digital messaging service.

Collections

The report also calls on HMRC to set out a plan for how it will collect older debts owed to it before they become uncollectable, raising concerns that these are not being effectively pursued. HMRC told the PAC’s inquiry that it is focused on pursuing high levels of new tax debt (largely driven by small businesses’ cashflow issues), which are easier to collect. In 2023-24, £5bn in debts were written off as uncollectable by HMRC, up from £3.2bn in 2022-23, with a risk this could apply to an estimated 45% of debt owed to the public purse.   

Chair comment Sir Geoffrey Clifton-Brown MP, Chair of the Committee, says: “Given that citizens have no choice but to engage with HMRC, it has a responsibility to aspire to the highest standards of service. Unfortunately, what we have instead is a tax authority excavating its way to new lows in service levels every year. Worse, it seems to be degrading its own services as a matter of policy. HMRC is an organisation in defensive mode and needs bold and ambitious leadership to begin to chart its recovery.  “There is some hope in our report. HMRC has now secured more funds to allow it to pursue what’s owed to it and has a welcome new goal to reduce the gap in unpaid tax. We would urge it to use its new resources not to just go after low-hanging fruit but to do more to recover older debts lest they become uncollectable.

“Further, if it is serious in its plans to reduce its prosecutions, it should also explain what the best means of deterring criminal tax evaders may be.”

Picture: HMRC's call lines are not being answered.

Article written by Cathryn Ellis
27th January 2025

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