Customer service levels at HM Revenue and Customs have sunk to an “all-time low”, parliament’s spending watchdog has said. Users regularly encounter long call-waiting times as the tax department apparently struggles to cope with demand, a report by the cross-party public accounts committee (PAC) has found. As demands on HMRC grow, the authority has not been given the resources needed to staff its phone lines, the report said. In 2022-23, 62% of callers waited more than 10 minutes to speak to an adviser – up from 46% the previous year. On average, it took a little more than 16 minutes for someone to answer the phone – up from a little more than 12 minutes in 2021–22. However, in December there were reports of some callers facing waits of up to an hour to get through, with some people saying they ended up being cut off before their call was even answered. The tax office is trying to cope by weaning service users off speaking to a real person on the phone in favour of having them make do with YouTube videos and chatbots, the report found. Since the PAC’s last report in January 2023, HMRC’s performance “has continued to deteriorate”, and it has now resorted to closing customer support channels to prevent people from contacting it to sort out their tax affairs. As the taxpayer population increases along with the complexity of their tax affairs, MPs on the committee said that “it looks like HMRC is struggling to cope”. A lot of this is linked to growing numbers of people being pulled into the system as a result of “fiscal drag”, said the report. The freezing of personal income tax thresholds until 2028 will, over time, drag more and more low-income households into paying basic-rate tax, which kicks in at £12,570 a year, and those with earnings nearing £50,000 into the higher 40% rate, which kicks in at £50,270. Linked to this, the number of people who have to submit a self-assessment tax form has grown over the years: a decade ago it was just over 10 million people, but this year it was more than 12 million.
The report quoted HMRC as saying that more than half of the phone calls it received “are capable of being serviced through an online service instead, including webinars, YouTube videos, chatbots and web chat”. It has set itself a target to reduce incoming phone and post contact by 30% by 2025, compared with 2021–22. There has also been a significant drop in the number of criminal prosecutions by HMRC – from 691 in 2019-20 to 240 in 2022-23 – but at the same time there were cases where taxpayers “are being pursued repeatedly for often trivial amounts”. Dame Meg Hillier MP, chair of the committee, said its latest report into HMRC’s performance “sadly illustrates a continued tale of decline in its services”. An HMRC spokesperson said: “We’re making strong progress improving our customer services, with a focus on encouraging people to deal with us online where they can by providing quicker, easier and always available digital services.” They added that millions more people used HMRC’s online services last year, “saving them waiting on the phone and freeing up our advisers to deal with those people who need extra support”. Meanwhile, three-quarters of all customer correspondence was answered in 15 working days, “a significant improvement on the 45% in 2021-22”.