NAO report shows need to break vicious cycle of ‘failure demand’ on HMRC helplines

Analysis from the National Audit Office, published today, highlights the growing demands on HMRC from complexity and an increasing number of taxpayers. The NAO report found that the UK’s “increasingly complex” tax system is costing businesses £15.4 billion a year, while HMRC’s own running costs are also rising.

The CIOT says the findings support its calls for targeted investment into HMRC performance, alongside new tools to support emerging digital platforms alongside traditional contact methods such as telephone helplines.

Lindsay Scott, CIOT technical officer, said:

“The NAO report backs up what our own research tells us – that whilst recent investment may have improved connection rates to helplines, there is much to do to improve HMRC customer service, including the resolution of queries. Difficulties in this area continue to have a detrimental impact on the tax system as a whole, the ability to do business and the wider economy.

“This report highlights the vicious cycle that ‘failure demand’ is inflicting on HMRC customer services – repeated unnecessary contact incurring costs for all parties.  The introduction of an automated progress tracking facility could play a key part in breaking this cycle.”

In a survey of tax agent interactions with HMRC last year, conducted jointly with ICAEW, CIOT suggested HMRC could save an estimated 1.7 million hours of call handlers’ time every year, or £36 million, if it put a tracking system in place. The survey also estimated that one in three calls to a HMRC helpline is progress chasing.

Lindsay Scott added:

“Our survey highlighted examples of prolonged and difficult interactions with HMRC customer services to ask for HMRC errors to be corrected.  The introduction of a complex cases service could help to provide an avenue for resolution of these difficult cases, reducing costs and the negative impact that these errors have on taxpayers and their businesses.

“We welcome the NAO’s call for HMRC to be more ambitious in how it works with tax advisers and other intermediaries to reduce system costs and, in particular, their call for the government to commit to provide access to digital services to tax advisers on an equal footing with taxpayers.”