Businesses ‘losing faith’ in HMRC as service levels fall

Record numbers of businesses rate the experience of interacting with HM Revenue & Customs as “poor”, a survey of more than 10,000 presented to the Treasury has found.
It is the first time that a majority of those polled by the HMRC’s independent Administrative Burdens Advisory Board (ABAB) said the service was unacceptable.
In response, accountants said that businesses and their professional advisers were “losing faith” in the taxman, with the failings impeding the collection of taxes.
“This simply can’t be allowed to continue,” said Caroline Miskin, a senior technical manager at the Institute of Chartered Accountants in England and Wales (ICAEW).
The biggest rise in dissatisfaction was in the time it took HMRC to answer the phone, followed by frustration with the quality of webchat and helpline advice.
HMRC was given credit for making it easier to find answers to tax questions on the .gov website in the past year. But in other areas, such as navigating more complex importing and exporting forms since Brexit, businesses have simply given up being angry.
Dame Teresa Graham, who chairs the advisory board, said that more respondents to the survey were accepting increased bureaucracy as a “cost of doing business” in Britain.
She said the Treasury and HMRC were acting on the findings, with James Murray, the exchequer secretary, receiving a copy. The priority was to resource the helpline service better, she added, directing basic personal taxation queries towards more customer-friendly online advice services, and beefing up the team responding to businesses taxation queries. “The helpline is a lifeline to many businesses and it is the priority [to fix] as it leads to the poor customer experience,” she said.
Graham added that through the survey businesses were telling the government it had to address the “legislative burden” of taxation, rather than simply adding further taxes at this month’s budget.
“Where people are saying this [reporting requirement or tax obligation] has become easier, they are just saying they have absorbed the burden in a way that allows them to move on from it,” she said. “Cumulatively, every year things hit them. The smallest changes have profound effects. And they pay for all these changes, as for a lot of them they use agents and they will bang in a bill [for their advice].”
Graham said HMRC was under-resourced and operating on IT systems that were decades old. It meant that sensible digital improvements — including the streamlining of information requested by HMRC — were being held up, with paper-based processes still being introduced instead for new taxes and reporting requirements.
Some HMRC teams were alert to the problems, she said, citing a meeting this week called by civil servants as a result of the survey’s findings. She said this particular team focused on making paper forms and letters more intelligible, with one deemed so unclear that it had to be rewritten from a full page of text to five lines. “It was transformational. We all suddenly said ‘Ah, that is what it meant’,” said Graham. “They have asked us to send them more examples of letters from HMRC that make no sense.” To do so, use the [email protected] email.
Businesses have increasingly expressed their frustration with HMRC’s services in recent years, with ABAB seeing the responses to its annual survey increase from fewer than 4,000 two years ago to 10,052 this year. Some 84 per cent of the respondents were businesses, with the remainder tax agents.
Miskin, at the ICAEW, said businesses and agents were “losing faith” in HMRC. “HMRC’s service levels have fallen far below what is needed for a modern tax system — politicians have told us that, the National Audit Office has told us that, and our members continue to voice their frustrations. Tax collection is suffering and there are huge inefficiency costs for taxpayers, agents and HMRC,” she said.