Confidence in HMRC slumps with depleted service levels


Fewer than half of all tax specialists had a “positive overall customer experience” when dealing with HM Revenue & Customs last year — down by a fifth from the previous year — as service delays and errors have left thousands of taxpayers waiting months for refunds.

According to the tax authority’s customer survey published in its annual report this week, satisfaction has slumped across all of HMRC’s customer lines, with the largest fall among agents — accountants and book-keepers acting on behalf of individuals and businesses.

Just 48 per cent of agents reported a positive overall experience in 2021 when dealing with HMRC, down from 61 per cent the previous year. Separately, only 43 per cent gave the authority a “positive rating” for confidence, down from 57 per cent the previous year, yet marginally better than 40 per cent reported when the survey was launched in 2015.

The numbers reflect the fact that HMRC has struggled to cope with the backlog during the pandemic, when resources were diverted to implement support schemes.

However, the Charter Stakeholder Group, which comprises representatives of leading tax and accountancy bodies, said in a note alongside the survey that feedback indicated the presence of “several deep-rooted issues” and that while the pandemic has had an impact, “HMRC’s service levels in many areas have been unsatisfactory for several years.”

Beyond delayed response times, mistakes at HMRC, which has about 20,000 staff in its customer service team, are also frustrating tax advisers. Some 41 per cent of agents said HMRC had made errors with tax dealings in the past 12 months.

“Overcoming HMRC inertia remains the most difficult area for me and it’s difficult to explain that to clients,” said David Feldman, a tax adviser who previously worked as an HMRC investigator for 30 years.

“Technical responses from HMRC are more often than not very poor, showing lack of experience and training,” he explained, adding that a high turnover of staff following a “massive office closure programme” has left the tax authority with few experienced staff.

The issues cited as most frequent included self-assessment registrations and refunds, responses to technical questions, correspondence about VAT, and section 455 refunds (a temporary tax which can be recouped on the repayment of qualifying loans).

At the end of June, HMRC published a dashboard which highlighted service turnround times in 27 core areas, 10 of which are shown to be operating a delayed service. The Revenue currently processes applications for group VAT registrations submitted in January this year, for example, despite a target turnround time of 30 days.

This week, the dashboard reported processing online requests for refunds from a self assessment tax return received on June 1, despite a 15-day target turnround time.

Giving evidence to the public accounts committee last December, Jim Harra, permanent secretary and chief executive of HM Revenue & Customs, said: “We are not resourced to give a brilliant service; we are resourced to give a decent service, and that is what we are constantly trying to manage.”

HMRC’s latest performance report shows that service levels have improved following a nadir in April 2021, when, under pressure from the pandemic, less than a third of customers received a response from the Revenue within 15 days. In March this year, the proportion had risen to 65 per cent.

HMRC said: “We’ve made solid progress towards offering our customers a better service, reducing work that had built up during the pandemic and clearing a backlog of around 1.5mn items of post.

“The challenging economic outlook means we expect to see continuing pressure on our services for some time — but we’re focused on recovering our customer services, compliance yield and debt balance.”

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