A parliamentary report has accused HM Revenue & Customs of failing to answer telephone enquiries in an attempt to push taxpayers to seek help online instead, eroding trust in the tax system.
The report from the Public Accounts Committee found that a third of customers’ attempts to speak to an adviser were left unanswered by HMRC, stating that it was concerned HMRC ‘has sought to downgrade its telephone service to drive taxpayers to digital channels.’
Calls to the tax authority are cut off after customers have been waiting 70 minutes with no explanation or callback option. Despite HMRC adopting a ‘digital first’ approach, it still received 37 million calls in 2023-24. However, its customer service levels have steadily declined since 2017-18, with performance reaching an all-time low in 2023/24.
Charlene Young, pensions and savings expert at AJ Bell, said the report highlights a “litany of failings” at HMRC, and warned that delays in dealing with enquiries is leading to taxpayers missing deadlines and facing late penalty charges.
Young said: “In the last tax year HMRC failed to answer a third of all attempts to speak to an adviser. That’s an astounding figure and illustrates perfectly why MPs have warned that HMRC’s failures have damaged faith in the tax system.
“Faced with a tax system so elaborate and convoluted, and a desperate struggle to reach anyone at the tax office able to help with queries, it is no surprise millions of taxpayers end up missing tax deadlines. Of course, with interest rates far higher than they were a few years ago, any late payment interest now accumulates far more rapidly than it has done in the past.”
Young said the twin problems of a growing tax burden and a squeeze on HMRC’s resources mean the situation seems unlikely to change anytime soon.
She explained: “Government measures in recent years have seen the capital gains tax and dividend tax allowance cut dramatically, meaning more taxpayers have small liabilities to tot up and pay to HMRC. Likewise, incoming reforms to alter the treatment of pensions on death and dilute agricultural property relief will in time mean more families are forced to consult the taxman for information on IHT.
“Meanwhile, the ongoing freeze on income tax bands, as well as the IHT nil rate band and other allowances, mean more and more people are being dragged into the tax system.
“All of this means added pressure on HMRC, which it appears ill-equipped to deal with. This is an urgent issue which needs to be addressed in order to allow taxpayers to pay their dues accurately and on time.”
A Freedom of Information request by AJ Bell found that 280,000 people were late in filing their self-assessment tax form in 2021/22, with an average penalty of £349.
Main image: luke-chesser-eICUFSeirc0-unsplash
