The Treasury is to add £51m to HMRC’s budget to specifically fund improvement to HMRC’s phoneline services, to help it meet service standard targets.
The extra funding comes as the National Audit Office released its report on HMRC customer service, which shows call waiting times have increased by over 350% in the past five years. The NAO report also revealed that callers cumulatively spent 798 years on hold waiting to speak with HMRC in 2022-23.
HMRC recently had to perform a U-turn on cutting the operating hours of its taxpayer self assessment, VAT and PAYE support lines. The tax authority halted its plans only 24 hours after announcing them following a backlash from stakeholders, taxpayers and professional bodies.
The Treasury noted in a statement announcing the extra £51m that HMRC has received a £900m cash increase over Parliament, from £4.3bn in 2019/20 to £5.2bn in 2024/25.
In a statement, HMRC chief Jim Harra said: “This additional funding will enable us to improve our helpline service for those who need to speak to us – including the vulnerable and digitally excluded – making sure they get the support they require.”
Richard Wild, the head of tax technical at the Chartered Institute of Taxation, said: “We are pleased the government has recognised that HMRC need additional resources to improve its customer service, particularly its phone lines which have been underperforming for many years. HMRC’s service levels continue to be the single greatest concern expressed by our members, and our surveys tell us that it is making it harder and more expensive to do business, and damaging trust in the tax system.
“While £51m sounds like a lot of money, it’s just a small fraction of HMRC’s customer service budget, and so needs to be spent wisely. We hope that this additional funding can help bridge the gap that exists between the desire to do more digitally, and the availability and reliability of systems which would make that possible.”
And RSM UK is calling on the government to prioritise further investment.
The audit, tax and consulting firm would also like to see HMRC given ministerial department status to improve services and increase productivity.
RSM UK employment tax partner, Susan Ball, said: “While we welcome the government’s £51 million investment in HMRC service levels, the National Audit Office report lays bare the significant drop in customer service levels. It begs the question is the £51 million investment already promised going to be enough to make the significant improvements necessary? It’s likely to take some time for performance levels to shift, as new staff will need significant training to navigate and advise on our complex tax system.
“With around 34 million taxpaying individuals, and over five million businesses relying on HMRC for advice and support, the current lengthy wait times are not just an inconvenience for taxpayers. They are a drain on UK productivity, preventing tax advisers from supporting clients, and hampering business productivity. It may be time for the government to consider making HMRC a ministerial department, so it has the proper investment, oversight and focus needed to support taxpayers properly.”
