HMRC Under Fire: Deteriorating Service Quality Erodes Public Trust

The HM Revenue & Customs (HMRC) is facing significant backlash following a report from the Public Accounts Committee (PAC) that highlights a severe decline in service quality and growing public dissatisfaction. The report reveals that customer service levels have plummeted, raising concerns about the tax authority's ability to maintain public confidence in the tax system.

Key Takeaways

• HMRC's customer service has reached an all-time low, with only 66.4% of calls answered.

• Average call waiting times exceed 23 minutes, leading to frustration among taxpayers.

• The PAC criticises HMRC for deliberately degrading phone services to push customers online.

• Concerns over uncollectable debts have risen, with £5 billion written off in 2023-24.

• The report calls for bolder actions against tax evasion and better debt recovery strategies.

Declining Customer Service Levels

The PAC's report indicates that HMRC's customer service has deteriorated over the past six years, culminating in a crisis point in 2024. With only 66.4% of customer calls being answered and average waiting times exceeding 23 minutes, taxpayers are increasingly frustrated with the lack of support.

The report suggests that HMRC has intentionally allowed its phone services to decline, hoping to encourage customers to transition to online services. However, this strategy has backfired, as many essential services remain unavailable online, leaving vulnerable customers without adequate support.

Concerns Over Uncollectable Debts

Another alarming finding from the PAC report is the rising number of uncollectable debts. In the fiscal year 2023-24, HMRC wrote off £5 billion in debts, a significant increase from £3.2 billion in the previous year. This trend raises concerns that nearly 45% of the debts owed to the public purse may become uncollectable if not addressed promptly.

The PAC has urged HMRC to develop a comprehensive plan to recover older debts before they become irretrievable. The focus on new tax debts, primarily driven by small businesses facing cash flow issues, has led to a neglect of older debts that require attention.

Tackling Tax Evasion

While HMRC has set a new goal to reduce the tax gap, the PAC report criticises the authority for not being aggressive enough in tackling tax evasion. The offshore tax gap is estimated at a mere £0.3 billion, which the PAC deems implausibly low. Furthermore, the report highlights a worrying decline in criminal investigations and prosecutions, as HMRC prioritises high-value cases over a broader approach to non-compliance.

The PAC recommends that HMRC conduct research to identify effective deterrents for tax evaders and organised criminals, emphasising the need for a more robust strategy to combat tax abuse.

Call for Leadership and Accountability

Sir Geoffrey Clifton-Brown MP, Chair of the PAC, expressed deep concern over HMRC's current trajectory, stating that the organisation is in a defensive mode and requires bold leadership to recover its standing. He emphasised that citizens have no choice but to engage with HMRC, and thus, the authority must strive for the highest standards of service.

The report does offer a glimmer of hope, as HMRC has secured additional funding to pursue outstanding debts. However, the PAC urges the authority to use these resources wisely, not just to target easy collections but also to address older debts and improve understanding of hidden offshore tax liabilities.

In conclusion, the PAC's findings present a stark picture of HMRC's service quality and its implications for public trust in the tax system. As the authority grapples with these challenges, it must take decisive action to restore confidence among taxpayers and ensure a fair and effective tax system for all.

Sources

• HMRC accused of deliberately poor service and damage to public confidence in tax system - Committees, UK Parliament.