LONDON: The public accounts committee has urged HMRC not to “underestimate the demand for telephone contact” from taxpayers as it attempts to cut the cost of its personal tax services by 34 per cent by 2020-21 to meet spending targets.
The report said the impact of staff cuts had caused taxpayers to spend “some four million hours waiting for HMRC to answer the phone” in the 2015-16 tax year, incurring call charges to its 0300 phone numbers while they were on hold. These numbers cost up to 45p per minute to call from a mobile, and 12p per minute from a landline.
The average time taxpayers spent on hold reached almost 35 minutes in one week in October 2015 — with almost 30 per cent of all calls unanswered last year as callers simply gave up.
“Every £1 saved by HMRC on telephone services over this period [resulted] in an estimated £4 in extra costs to customers,” the committee said, reiterating similar criticisms by the National Audit Office earlier this year.
Meg Hillier MP, chair of the PAC, said the committee received more complaints from members of the public about HMRC’s personal tax services than any other issue, which she said was indicative of the scale of the problem.
“The prospect of HMRC making further cuts to spending on customer service will chill the blood of many taxpayers,” she said.
Recognising that service levels had improved following the recruitment of 2,400 new staff, she said there was “no excuse for poor customer service”, noting how high street banks had focused on improving their telephone response rates after criticism of their overseas call centres.
“HMRC could learn a thing or two,” she said. “They have to better understand the needs of the taxpayer.”
The criticism follows a separate report from the committee in November, warning that customer service levels were so poor they could be having “an adverse impact on the collection of tax revenues”.
Wednesday’s report acknowledged that HMRC had handled more than 90 per cent of calls in April and May this year, with an average waiting time of less than 6 minutes.
“HMRC says it now expects average waiting times to fall below five minutes and aims to reduce this still further,” the report said. “We will be holding senior officials to account on this target in the months ahead.”
HMRC said the MPs’ report was an “inaccurate, out-of-date reflection of our phone performance”.
The authority added: “We acknowledge that service levels in the early part of last year were not acceptable and we apologised at the time.
“But the PAC is well aware our phone lines have since fully recovered and we are now offering our best service levels in years. There’s never been a more convenient service for our customers.”
Paul Noble, tax director at law firm Pinsent Masons, said the Revenue was in a bind, caught between the need to crack down on avoidance at the same time as balancing costs and resources.
“Where do you put your eggs?” he asked. “It’s a strategic call that I’m not sure I’d want to make. It’s difficult.”
“Taxpayers need to be sure that when they call HMRC they are going to be dealt with in a timely and competent manner, which is why it’s important that service levels are high,” said Laith Khalaf, senior analyst at Hargreaves Lansdown. “In the last few years that hasn’t been the case, and has left taxpayers frustrated.
“The increasing move to digital processing is definitely progress, but that doesn’t remove the need for robust telephone services, because there will always be people with questions about the online process, as well as those who don’t use the internet to fill in their tax return.”
