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Owners of small businesses have hit out at the UK tax authority’s plan to scale back phone services, fearing it will leave them unable to access support while remaining subject to strict penalties for mistakes.
HM Revenue & Customs’ 2022-23 annual report sets a target to reduce the volume of calls it receives by 30 per cent between 2022 and 2025. It said the reduction, which amounts to some 10mn engagements each year, would be delivered by channelling more people into online services.
The Federation of Small Businesses and the Institute of Directors, trade bodies, said HMRC’s ambitions hampered small businesses struggling to navigate complex tax affairs, who already faced difficulties accessing phone support due to long waiting times.
The FSB added that many businesses feared tax penalties if they filed incorrectly and they depended on HMRC’s guidance over the phone to resolve issues.
“Telephone lines need to be properly resourced, with trained, knowledgeable staff on hand to answer calls within a reasonable amount of time,” said Martin McTague, FSB chair. He said that business owners were instead forced to waste time searching for answers online.
HMRC is overhauling its services in an effort to meet budgetary constraints at a time when it faces growing demand due to increased complexity in the tax system.
The tax authority said the department faced “stretching efficiency challenges” to meet demand in line with its current annual budget of £6.2bn. High inflation meant it had to “reduce low value demand for our services” and “drive a shift to digital services”, it added.
“HMRC has narrowly missed its customer satisfaction target last year and is significantly off target for handling telephone inquiries,” said Kitty Ussher, chief economist at the IoD.
In June, HMRC said it would shutter its self-assessment helpline as a temporary measure over the summer to divert resources to areas facing higher demand. It advised taxpayers to use an online chatbot, but accountants said this risked creating a bottleneck closer to the January 31 filing deadline.
“All they’re doing there is kicking the can down the road. The people who would have phoned up in the summer will now need to phone up in the autumn and winter. A lot of these calls are now being deferred,” said Matt Crawford, a partner at accountants Blick Rothenberg.
Crawford said that many small businesses could not afford tax advice and relied on HMRC to guide them through complex processes.
A customer satisfaction survey published by the tax authority in July showed some 74 per cent of small businesses preferred to contact HMRC by phone.
In January, the House of Commons public audit committee said taxpayers were being “forced to interact” with HMRC online and it was “unconvinced” the tax authority’s plans to shift more enquiries to digital channels were sustainable.
Richard Wild, head of tax technical at the Chartered Institute of Taxation, said HMRC had suffered from a decline in technical knowledge among staff over time and that upcoming reforms, including changes to the reporting period for self-employed people, would only increase service demand.
“HMRC is going to have to be on hand for all kinds of support and you wonder where that support is coming from if they are trying to reduce calls by 30 per cent,” he said.
The tax authority said phone services continued to be used for simple issues including resetting their online password or to access other basic information readily available online.
It added: “We want to ensure our expert advisers are available to help those who most need to speak to us — those with complex queries, the digitally excluded, the particularly vulnerable.”
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