Taxpayers spent ‘800 years’ on hold to HMRC, says UK spending watchdog

HM Revenue & Customs’ customer service is “in a declining spiral”, according to a damning report by the UK public spending watchdog, which found taxpayers spent the equivalent of 800 years on hold to the agency in 2022-23.

The National Audit Office said on Wednesday that funding pressures, job cuts and a push to reduce costs by encouraging people to manage their tax affairs online had all led to worse call-handling performance by HMRC.

The average time spent waiting on the phone to speak to an adviser in the 11 months to February 2024 was almost 23 minutes, the NAO said, well above the five minutes recorded in 2018-19. In the same period, HMRC answered only 67 per cent of calls from taxpayers, compared with a target of 85 per cent.

Altogether taxpayers spent 7mn hours, or 798 years, on hold to HMRC in 2022-23, the latest year for which full data is available — more than double the time in 2019-20, according to the NAO.

HMRC had not met its goals for responding to taxpayer correspondence or telephone calls for several years, with annual targets last achieved for correspondence in 2018-19 and for telephone services in 2017-18.

“In the face of funding pressures, HMRC has pressed on with attempts to reduce costs despite its poor performance. HMRC and customers have been caught in a declining spiral of service pressures and cuts,” the report concluded.

HMRC spent £881mn on customer service in 2022-23, a 6 per cent real-terms cut since 2019-20, the NAO said. It noted that the Treasury — to which the tax agency reports — had in 2021 asked HMRC to make annual efficiency savings of £75mn in customer services by 2024-25.

Last year the Treasury doubled that target to £149mn, but HMRC has struggled to make the original one. The NAO found the tax authority had made just £53mn of savings by 2023-24.

The watchdog also said HMRC had cut its frontline customer service workforce by 6 per cent in 2023-24 compared with 2022-23, to 18,200.

Customer service staff numbers had fallen by 9 per cent since 2019-20 — when they totalled 20,000 — during which time “call-handling performance worsened significantly”.

As of last month, HMRC planned to slash its frontline customer service workforce, including temporary staff, by 14 per cent in 2024-25 “to live within its customer service budget”, the NAO said.

It warned this reduction would be “unprecedented in recent years” and recommended HMRC rethink its approach.

In March, chancellor Jeremy Hunt ordered HMRC to reverse course a day after the tax agency said it would permanently cut the number of telephone lines available to provide taxpayers with help for self-assessment tax returns, VAT and pay-as-you-earn issues.

The NAO report echoes the influential House of Commons public accounts committee, which said in February that HMRC customer service was at an “all-time low” and that the Treasury had failed to give it sufficient resources.

The Treasury on Monday set out £51mn of new funding to improve the performance of HMRC’s customer service helplines.

HMRC said: “While customer service standards on our phone lines are still not where we want them to be, we’re making strong progress in our efforts to improve our customer service and additional funding has been confirmed by the government this week.

“Millions more people used our highly rated online services last year — saving them waiting on the phone and freeing up our advisers to deal with those people who need extra support,” it added.