A recent report by the National Audit Office (NAO) has sharply criticised HMRC, revealing that taxpayers spent a million hours on hold during 2023/24, equivalent to 798 years. This significantly increased from the 3.2m hours recorded in 2019/20. During the same period, HMRC answered 22% fewer calls and spent 6% less time on each call. The decline in service quality has been attributed to complex tax issues, taxpayers needing frequent updates, and a rise in staff sickness levels.

The NAO highlighted that HMRC staff sickness rates were notably higher than the civil service average, with 11 sick days taken annually per staff member, compared to eight across other departments. Moreover, the failure of HMRC to meet customer service targets over the past five years was partly blamed on tax threshold freezes that expanded the taxpayer base, thereby increasing the demand for helpline services. Additionally, 72% of the 38m calls received were identified as "failure demand"-unnecessary queries that could have been avoided but were prompted by HMRC's own errors or delays.

Internal audits within HMRC revealed that advisers had not fully adhered to procedures in one-third of cases, leading to additional follow-up calls. Although there has been a push to move more services online, with a third of calls redirected to digital platforms, only 28% of users reported satisfaction with this service. According to the NAO, the digital transition has not effectively reduced the helpline pressure as many taxpayers are still unaware of or unable to resolve their issues online.

Treasury intervenes with funding boost

In response to the increasing criticism and the operational challenges faced by HMRC, the Treasury has stepped in, allocating an additional £51m to improve the helpline service. This funding is aimed at boosting the current 66.6% call response rate to 85%. Nigel Huddleston, the Financial Secretary, announced this crucial funding in a parliamentary statement, emphasising the urgent need for better performance amidst widespread dissatisfaction from the public.

Out of 2.9m attempts in February alone, only 66.6% of calls were answered, with 650,000 abandoned and nearly a million taxpayers resorting to HMRC's webchat for answers. This funding boost follows a controversial decision to close most helplines, swiftly reversed after considerable backlash from taxpayers, professional bodies, and even the Chancellor. HMRC's CEO, Jim Harra, admitted surprise at the intense public reaction to the closures during a Treasury Committee hearing.

Huddleston, elaborating on the Government's commitment, said:

"The Government is providing HMRC with £51m in new funding to bring HMRC's phoneline service back up to the published target of 85% of calls to HMRC advisers being answered. This additional funding enables HMRC to meet the performance standards on its phone lines that its customers expect, while continuing the transition to a digital-first model of tax administration.

"The Government is fully committed to providing HMRC with the resources it needs to meet the needs of all its customers, and will continue to do so."

This intervention highlights the ongoing efforts to improve taxpayer support and adapt to the UK's evolving demands of tax administration.

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