HMRC’s poor quality digital services are not meeting the needs of taxpayers, particularly those with more complex issues, according to a leading tax firm.
The attempt to move services online and close phone lines are causing further issues and ‘woe for taxpayers’, according to Robert Salter, a director at Blick Rothenberg.
The tax office announced its ‘Making Tax Digital’ plans in 2016, requiring businesses and individuals to keep digital records and report their income quarterly.
It was meant to maximise tax revenue, save the Government cash and improve customer service.
But in the nine years since HMRC rolled out the programme, which has gone £1billion over budget, there has been little improvement.
A joint report by the Institute of Chartered Accountants in England and Wales (ICAEW) and the Chartered Institute of Taxation (CIOT) in December 2024 laid bare its inadequacies.
It found that HMRC chatbots only appear to connect 49 per cent of the time and the resolution rate is only 21 per cent even once a connection is established.
Waiting times: HMRC’s digital services are not adequately addressing taxpayer needs, says accountancy firm
Salter also notes that HMRC’s online forms ‘are so badly designed that they create additional work, for taxpayers, their agents, and for HMRC’.
‘I and many other advisors have been complaining about these forms for years, so far only the R&D disclosure form has seen improvement.
‘We recently heard of a lady whose tax assessment was wrong because her state pension was accounted for incorrectly in the ‘simplied assessment’ of her tax liability which HMRC actually produced automatically.
‘If the figures for income received from the Governmnet cannot be reflected correctly in HMRC’s assessments, it does not reflect at all well on the quality of HMRC’s digitalisation programme’.
This is Money first highlighted issues with HMRC services in 2023, ahead of the permanent closure of HMRC’s VAT registration helpline.
Readers spoke of their frustration that they were unable to get through to an HMRC agent, with some saying the delays had made them consider moving their business abroad.
An HMRC insider told us that a ‘culture of fear’ and too much micro management had been behind the delays.
Last year, the Public Accounts Committee said HMRC’s customer services must be sufficiently resourced until its digital services address taxpayer needs.
Salter says that while digitalisation has its place for mundane, simple tasks, the increasing complexity of taxes mean taxpayers need to speak with an agent.
A survey by the Association of Chartered Certified Accountants (ACCA) shared with This is Money last year revealed almost 9 in 10 business owners said poor HMRC service was causing a ‘huge roadblock’.
It makes HMRC’s decision to close its VAT registration helpline, and a previous trialled closure of its self-assessment line, even more frustrating for taxpayers and accountants.
‘The restricted access to HMRC telephone helplines is also a problem for the many people who resort to telephoning because they cannot get a response from HMRC within a reasonable timescale,’ says Salter.
‘Over a third of the telephone calls made to HMRC are progress chasing or calling to correct HMRC errors.
‘Eliminating such calls through improved response time would save HMRC approximately £36million per year.’
In the October Budget, the Chancellor committed to more funding for the digital programme.
Salter says that while it improve IT systems and digital services, ‘traditional communication methods must be maintained and improved to ensure customers, especially those with complex tax affairs, get the best possible service.’
A spokesperson for HMRC said: ‘More than 80 per cent of customers are satisfied with our digital services, with more and more people using them to quickly and easily manage their tax affairs.
‘At the same time, we’re making strong progress in improving our overall service standards, with call wait times down by more than 17 minutes since April.’
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