A significant investment of £1.4bn over five years is being made in HMRC, but that will need to be carefully allocated to compliance measures, improving HMRC customer services and modernising its systems. A further three-year spending review will take place in the spring, providing a further opportunity for investment in HMRC. 

ICAEW welcomes this greater investment in HMRC, having frequently reported on issues with the quality of services provided to taxpayers and agents. In 2024 alone, reports by the Public Accounts Committee and the National Audit Office, and the results of a recent survey by the Administrative Burdens Advisory Board, have highlighted significant problems with HMRC’s service levels. 

Prior to the Budget, ICAEW called for more funding for HMRC, citing initial findings from a joint project with the Chartered Institute of Taxation. These findings suggest that:

• additional funding announced by the previous government in May 2024 may have played a part in improved connection rates. The data shows that 85% of attempts by agents to contact HMRC across a range of helplines and webchats got through to an adviser; and
• HMRC has much more to do if it is to improve the quality of its interactions with agents. The survey reveals that approximately 25% of issues raised through helplines and webchats were unresolved, and that in 41% of cases agents needed to contact HMRC again.

Full results from the project will be published in December 2024. 

Investments in digital services

Investments in digital services highlighted in the Budget documents include:

• The plan for an HMRC digital transformation roadmap to be published in spring 2025, first announced in September, was repeated.
• HMRC will invest in digitalising the inheritance tax (IHT) service from 2027/28. This will support the IHT changes made in the Budget and the expected increase in the percentage of taxable estates.
• It will be possible for employed individuals to pay their high-income child benefit charge (HICBC) through their tax code from 2025, and HMRC will pre-populate self assessment tax returns with child benefit data for those not using this service. The government will not proceed with the proposed reform to base the HICBC on household incomes. The reason cited is the cost to the exchequer, but implementation would have presented significant practical challenges.

ICAEW’s Budget webinar

To learn more about the measures discussed above, and other changes announced at the Budget, join members of the Tax Faculty at the Budget webinar on Friday, 1 November 2024. Attending the webinar could contribute up to 1.5 hours of verifiable Continuing Professional Development (CPD), providing you can demonstrate that the content is relevant to your role.

Further information

• Autumn Budget 2024