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Continued strain on HM Revenue & Customs’ services could harm taxpayers’ ability to comply with their obligations, UK tax and business groups have warned.
The comments come as the UK tax authority this week told MPs that blowback from the industry prompted its recent decision to scrap controversial plans to slash its telephone helpline service.
Last month, HMRC announced that from April phone services to assist with self-assessment returns, VAT and pay-as-you-earn issues would close for six months and taxpayers would instead be steered towards its online services.
The move that led to an outcry among business groups. HMRC reversed its decision a day later.
The tax authority was admonished in February for what MPs on the Commons public accounts committee called “unacceptable” customer service. The committee called on the government to increase the department’s resources.
HMRC had previously told ministers it needed to reduce drastically the volume of its interactions with the public via phone and post if it was to deliver its services with existing resources.
Ellen Milner, director of public policy at the Chartered Institute of Taxation, which has 19,000 members, said HMRC’s digital services “aren’t yet good enough” and need to be improved to enable the tax office to “scale down their phone lines without risking harming compliance”.
On Wednesday, Jim Harra, HMRC’s chief executive, told the Treasury select committee that discussions about additional funding for the department had been positive and constructive but he is yet to receive a decision from ministers.
More frontline resources are essential to bring down long wait times, according to Frank Haskew, head of taxation strategy at the Institute of Chartered Accountants in England and Wales, a professional body with more than 208,000 members. “However, the situation is unlikely to improve in the short term as it will take time for HMRC to train up staff,” he said.
Small UK companies spend a collective £25bn on tax compliance each year, according to the Federation of Small Businesses, whose members are “highly concerned” about service levels at HMRC.
“Extra funding for HMRC’s customer service channels is badly needed, along with an attitude shift,” said Tina McKenzie, policy chair at the FSB, “and if HMRC’s helplines are resourced to the level required, it will be an enormous help. But that is a big if. In the short to medium term, it’s fair to say that small businesses will continue to dread having to interact with HMRC.”
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