The heads of ten leading UK professional bodies have signed an open letter urging the Chancellor of the Exchequer, Rt Hon Jeremy Hunt MP, to prioritise investment in HMRC’s service levels in his upcoming Budget statement on 15 March 2023.
The group of professional bodies represent hundreds of thousands of professional accountants and tax advisers working across the UK, from small and microbusinesses to multinational organisations.
The letter notes the Public Accounts Committee’s recent claims that £42 billion in taxes have not been collected at a time when HMRC customer service staff numbers have been cut by 24 per cent in the past five years.
It also argues that the delays and business disruption faced by their members has become “a regular occurrence when dealing with HMRC” with some businesses waiting upwards of six months for repayment and relief claims.
The signatories of the letter commented: “Our members are increasingly facing severe delays, business disruption and frustration when dealing with HMRC which is having significant ramifications for taxpayers, business owners and their agents.
“If the government wants to meet its economic objectives and boost productivity, it must invest in improving customer service and effectiveness at HMRC. We urge the Chancellor to treat this as a top priority in his upcoming Budget.”
The letter was signed by:
- Sarah Beale, Chief Executive Officer, AAT (Association of Accounting Technicians)
- Abdul Goffar, Director, Association of Chartered Certified Accountants UK
- Jane Ashton, Chief Executive, Association of Taxation Technicians
- Andrew Harding, Secretary General, Chartered Institute of Management Accountants
- Ken Pullar, Chief Executive Officer, Chartered Institute of Payroll Professionals
- Helen Whiteman, Chief Executive, Chartered Institute of Taxation
- Michael Izza, Chief Executive, Institute of Chartered Accountants in England and Wales
- Bruce Cartwright, Chief Executive, Institute of Chartered Accountants of Scotland
- Ami Copeland, CEO, Institute of Certified Bookkeepers
- Mark Walley, Chief Executive, STEP
The wording of the letter is below:
Dear Chancellor,
Open letter on HMRC service levels ahead of the Spring Budget 2023
1 March 2023
We collectively represent hundreds of thousands of professional accountants who provide essential support for businesses across the UK, from small and microbusinesses to multinationals.
The Budget on 15th March presents a daunting challenge of delivering economic growth, controlling inflation, transforming to a net zero economy, and fixing the public finances. However, the success of these objectives relies on having in place a functional, fair and efficient tax service.
In your Autumn Statement you rightly said that “a strong economy depends on strong public services”. This is nowhere more evident than in the services provided by HM Revenue and Customs, but despite its critical role in funding the public sector, customer service levels delivered by HMRC have fallen to an unacceptably low level. This has significant ramifications for taxpayers, business owners and their agents who are trying to comply with their tax obligations but need to be able to interact with the tax authority in a timely and efficient way.
The Public Accounts Committee claimed earlier this year that £42 billion in taxes have not been collected – more than double the amount pre-pandemic and the equivalent of paying the annual wages of three quarters of staff in the NHS. While there are many factors causing this, it would appear that a major underlying problem is insufficient resourcing and underinvestment in HMRC’s systems.
As the Committee noted, HMRC customer service staff numbers have been cut by 24 per cent in the past five years and there have been instances recorded where HMRC have “simply closed its telephone line when it could not cope with demand”. At a time of economic hardship, this not only affects the amount we can spend on public services, but it also severely restricts economic growth.
We increasingly hear from our members about the severe delays, business disruption and frustration that has become a regular occurrence when dealing with HMRC. Businesses claiming repayments and reliefs are frequently waiting upwards of six months, straining cashflow. Time spent waiting on phone lines and sending chasing letters creates additional compliance costs that our members typically bear rather than pass on to their frustrated clients, but it is also an added cost for HMRC and ultimately, taxpayers.
As professional membership bodies, we recognise the role we too must play in raising the standards of the profession. More than £9 billion of the tax gap is comprised of taxpayer error or failure to take reasonable care, and a third of tax agents do not belong to professional bodies. Responsible businesses should always ensure that their accountants and tax agents are members of a professional body which has strong codes of ethics and practice.
The Budget presents you with an opportunity to properly invest in HMRC, with a focus on improving customer service and effectiveness, so it can help both improve public sector finances and boost productivity in the UK as a whole. We urge you to consider this as a top priority in your forthcoming statement.
