Watchdog MPs have confronted members of HM Revenue and Customs' top leadership team over recent call handling difficulties and hastily-reversed plans to close helplines.
Members of parliament's Public Accounts Committee questioned HMRC perm sec Sir Jim Harra and director-general for customer services Myrtle Lloyd over a series of National Audit Office findings.
In May this year, the NAO said HMRC customers had spent a combined 798 years on hold waiting to speak to advisors during 2022-23 – more than double the time racked up in 2019-20.
Thursday's session also heard that the department had failed to achieve any of five specific targets for improving customer service in either 2022-23 or 2023-24. Additionally, Harra and Lloyd took flak over HMRC's practice of terminating calls from customers after they have been waiting to speak to an advisor for 70 minutes.
Harra told the session that the number of taxpayers in the UK had increased by around 3 million over the past two or three years because of the freezing of tax thresholds and other changes, and that more people were exposed to "complex parts of the tax system". He said the result was increased demand for HMRC services.
He acknowledged that the department had "certainly not" given HMRC customers the level of service staff would have wanted. "The poor levels of service continued in the first half of this financial year, but they are now significantly better," he said.
In March, HMRC announced plans to close telephone helplines for queries about income tax self assessment, VAT and pay-as-you-earn in an attempt to encourage customers to seek answers via digital channels. It believes that around 66% of calls to the department's advisers could be resolved digitally.
The move prompted a public outcry and was reversed the following day. The department subsequently secured £51m in additional funding from HM Treasury to improve its customer services.
Harra said the proposals to cut the helplines were prompted by the expectation that the lines were about to get levels of demand that could not be serviced. He suggested, without stating directly, that ministers had taken the decision to cut the helplines as the alternative to providing better resourcing.
Asked whether he had sought additional resources, Harra replied: "We certainly are transparent with ministers and Treasury about the resources we have and the service levels we can give, and what the different options are for what you can do with that."
'Appalling service'
MPs scrutinised customer services DG Lloyd about HMRC's practice of terminating calls from customers once they have spent 70 minutes waiting to speak to an adviser. May's NAO report said 43,000 such calls had been terminated in the first 11 months of 2023-24 – a sixfold increase on the 6,875 during the whole of 2022-23.
Committee member Nesil Caliskan asked Lloyd whether she thought being cut off after waiting 70 minutes to speak to an adviser was good or bad customer service.
Lloyd replied: "It is not ideal."
Caliskan said constituents did not say the situation was "not ideal". "They say, 'it’s appalling'," she observed.
Lloyd repeated: "That is not ideal customer service, and I am sorry for that. That is a feature of when we had fewer people to answer the phone calls. We are now resourced to meet our service standards, and instances of the 70-minute cut-off occur only if we have an IT failure or suchlike."
MPs asked why HMRC did not even warn customers waiting on hold that their call would be terminated after 70 minutes. Harra said he would "take away that point".
'We simply have not had the resources to cope with the volume of contact'
Later in the session Hatton asked Harra to apologise for HMRC's poor service levels, and particularly March's rapidly-reversed decision to cut the telephone helplines for self-assessment, VAT and PAYE.
"Would you accept that perhaps the most useful thing HMRC could do to restore its credibility is to own up and say, 'we got this wrong' and to apologise?" he said. "The public backlash was immense over those two days, and I think people do not have much trust in HMRC to do basic things right and to provide basic services.
"Owning up, putting your hand up and apologising would probably be the best way to send a clear signal to the public that you want to restore trust and that you want to do better."
Harra responded: "I certainly apologise to customers that we have not been delivering good service levels for the last couple of years and for the first half of this year. When it comes to customer trust, I think I would disagree with you.
"We know that we have good levels of satisfaction from customers, and I believe that customers do trust us to look after their information and to assist them. We simply have not had the resources to cope with the volume of contact, and I apologise for that meaning that some customers have not been able to access us or have had to wait longer than is reasonable to do so."
Earlier in the session, Harra was asked whether he would rule out any further cuts to telephone helplines. More than once he responded that there were "no plans" for such closures.
MPs asked Harra why he would not simply rule out helpline closures.
He replied: "I cannot say what my successors will want to do in five years’ time or 10 years’ time."
Hatton asked Harra to give a commitment there would be no helpline closures while he is HMRC chief executive.
Harra replied: "While I am chief executive, there will be no closures of helplines."
Hatton thanked him for the response and committee member Rebecca Paul said it was "incredibly reassuring".
Harra is due to retire as HMRC perm sec in the spring.