It is widely acknowledged that HMRC is struggling to meet the needs of taxpayers and agents. In 2023/24, HMRC missed all five targets set by HM Treasury, and it has made only limited improvements in recent months.  

Concerned that HMRC’s performance may be harming compliance, ICAEW and CIOT engaged in a six-week study involving 31 agent firms recording 634 contact attempts across phonelines and webchats, followed by two workshops.  

Problem areas 

ICAEW and CIOT’s findings, published today in the report Tackling HMRC’s customer service challenge, suggest that agents often face difficulties contacting HMRC and, if they do get through, they often cannot resolve their query on the first attempt.  

Although the call connection rate (88%) during the study exceeded HMRC’s target (85%), this masks deeper issues. Callers faced average wait times before connection of 19 minutes, with 8% of calls being cut off by HMRC before connection. Perhaps more worryingly, when connection was made, the query was fully resolved in only 34% of cases.  

The average satisfaction rating was low, at just 2.8 out of 5 for phonelines and 1.4 out of 5 for webchats.  

Possible causes 

The data shows that calls to chase progress are placing an unnecessary strain on HMRC’s resources. The data suggests that progress chasing accounted for over a third of all calls, with agents spending approximately 31 minutes per call (which includes 19 minutes waiting on the phone) and achieving a ‘resolution’ from such calls only 15% of the time.  ICAEW and CIOT estimate that eliminating such calls could represent a potential annual saving to HMRC of over £36m.  

Other factors contributing to the issues reported by agents include insufficient technical knowledge held by HMRC advisers and HMRC’s roll-out of digital services. ICAEW and CIOT agree that a ‘digital first’ strategy for HMRC is the correct one. However, demand is currently outstripping supply and more should be done to plug the gaps. Traditional phone and post services need to be retained during the digital transition and not withdrawn or scaled back.  

Recommendations 

Based on the findings, ICAEW and CIOT recommend that HMRC:  

• introduces an external tracking mechanism to tackle progress chasing and reduce contact;
• reviews and improves internal tracking mechanisms to tackle lost correspondence, inconsistencies and repetition;
• ensures there are appropriate routes to escalate complex cases to help resolve problems more effectively without prolonged and repeated interaction with HMRC customer service;
• improves individual ownership of work to improve resolution rates, building trust and reducing further contact;
• improves education and training of HMRC staff to increase consistency and resolution rates, building trust and reducing ‘answer shopping’ by getting things right first time;
• invests in customer service staffing to increase capacity and output, easing the burden on existing HMRC customer service staff and reducing backlogs and delays;
• maintains investment in legacy systems to ensure taxpayers and agents who have no choice but to use legacy systems receive a sufficient level of customer service and functionality;
• identifies and plugs gaps in digital services to ensure HMRC’s investment is targeted at making meaningful changes to the digital services that taxpayers and agents want and need;
• increases the use of secure email for agent communication to help meet agent demand for digital communications; and
• co-creates and continually improves digital services by working collaboratively with taxpayers and agents to better inform design and testing, as well as making vital changes post-implementation to ensure digital systems work. 

ICAEW and CIOT encourage HMRC to explore how new technologies like artificial intelligence can be used to improve service. However, this cannot be at the expense of the here and now, and solutions should not be fully deployed until they have been properly tested and provide the right level of functionality.  

Further reading

• ICAEW and CIOT joint press release