ICAEW has submitted evidence to the PAC’s inquiry into HMRC’s customer service and accounts for 2023-24.  

Although statistics published recently show some improvement in HMRC’s call handling, ICAEW is concerned that resolution rates remain low, driving further demand. Initial findings from a joint project with the Chartered Institute of Taxation reveal that approximately 25% of issues raised through helplines and webchats go unresolved, while in 41% of cases agents needed to contact HMRC again. ICAEW believes that strategic investment and transformation are required to deal with the root causes of why taxpayers and agents are contacting HMRC.  

ICAEW is concerned that HMRC’s current approach to managing compliance using one-to-many campaigns is being undertaken without any meaningful evaluation as to whether it collects more revenue compared to opening enquiries. It is not always clear that HMRC has targeted the correct taxpayers, and letters sent just to agents are particularly problematic in terms of costs and client confidentiality. ICAEW doubts whether HMRC is currently sufficiently resourced to follow up on responses to the campaigns.  

ICAEW supports HMRC’s efforts to counter error and fraud. However, HMRC needs to ensure that preventative action does not deter genuine claimants from claiming relief and thereby undermining the policy intention. For example, there is widespread concern about HMRC’s current volume-based compliance strategy regarding claims for research and development (R&D) tax relief. The outcome of this approach is that many claims are being abandoned as it is simply not cost-effective to continue defending them. 

PAC has published evidence given by other bodies, including oral evidence given by HMRC.