HM Revenue and Customs has rejected a number of recommendations for customer service improvements put forward in a controversial report from members of parliament’s Public Accounts Committee.
The tax-collection agency came out fighting in February when PAC accused it of providing a “deliberately poor” level of customer service on some of its telephone lines. Permanent secretary Sir Jim Harra openly rejected the suggestion in an on-the-day response, prompting committee chair Sir Geoffrey Clifton-Brown to defend the report's findings.
In the PAC report, committee members said HMRC’s performance levels for telephony and correspondence had been below expected rates for years, with HMRC answering fewer calls and waiting times increasing. MPs warned the tax agency had been “too willing to let its telephone services fail in the hope this forces people to use its digital services instead”.
HMRC’s just-published formal response to the PAC report, contained in the latest Treasury Minutes, maintains its rebuttal of MPs’ central allegation, that the agency does not give enough consideration to the needs of customers. It also rejects three of the committee’s nine recommendations for improving customer service.
A particular bugbear of MPs was HMRC’s practice of cutting off calls without warning when customers have been waiting for 70 minutes to speak to an adviser. Evidence to the committee indicated 40,000 calls to HMRC were cut off in 2023-24 under the 70-minutes-maximum-wait policy, up from 6,875 the previous year.
PAC recommended that HMRC reintroduce a call-waiting time target as a key performance measure, in the interests of aiding telephone customers.
But the agency disagreed with the proposal. It said “average speed of answer”, which is the equivalent of call-waiting time, was already a key performance metric and monitored to “help make resourcing decisions”. HMRC said ASA was just over 28 minutes in April last year and “significantly lower" now.
HMRC said its current preference was to use the existing “adviser attempts handled” metric to capture customer-experience, because it provided a “more rounded” view of customer experience – including those who abandon their calls.
Another rejected recommendation was MPs’ call for a “corrective response” to be triggered whenever customer service levels fall more than five percentage points below target. PAC members said the deployment of additional resources should be one option in such circumstances.
Disagreeing with that proposal, HMRC said it did not wait for specific performance triggers and was “always reviewing plans and forecasts of demand, monitoring performance and proactively adjusting resourcing levels”.
It added: “Where performance pressures are identified, HMRC will always have discussions with HM Treasury and ministers about resourcing levels and whether funding or reprioritisation are needed to improve service levels.”
One of the customer service recommendations HMRC agreed with was a request to give callers accurate estimates of waiting times, not cut people off without warning, and create a callback service.
The agency said it was due to begin procuring a new contact service platform in the coming weeks, with the expectation that it will be in place in 2026-27. HMRC said the specification requirements would include accurate waiting-time estimates, warning about cut-offs, and callback options.
Department pledges to publish target for reducing tax debt
Elsewhere in its Treasury Minutes response, HMRC addressed recommendations related to its work to reduce the tax gap – which is the difference between tax owed and tax collected – and tax debt.
MPs said HMRC had received significant additional resources to crack down on tax debt at recent budgets, but investment in debt management had “not sufficiently reduced the amount of tax owed”.
They said HMRC should set out what reduction in the tax-debt balance is being targeted and by what date, so that planning could be undertaken to ensure older debts can be recovered before they become uncollectable.
HMRC said in the Treasury Minutes that the tax-debt balance had remained at more than £40bn for nearly three years. It said recent budgets had provided extra resources for debt reduction, meaning the agency would have more staff dedicated to debt collection in 2025-26 than at any time since 2014-15.
HMRC said it would set out expectations for the tax-debt balance by 2029-30 and plans for older debts in September this year.
It added: “This will allow for the outcome of the Spending Review Phase 2 to be taken into consideration.”
On the tax gap, which was estimated at £39.8bn in 2022-23, HMRC pledged to “set stretching annual compliance yield targets with ministers" that are projected to generate £6.5bn in 2029-30.
HMRC said those targets were expected to be agreed with ministers in June this year.