WIREDGOV

• HMRC’s telephone customer service is not delivering – average wait time of nearly 23 minutes in first 11 months of 2023-24 (up from five minutes in 2018-19).
• New digital services have not reduced service pressures as much as HMRC expected.
• HMRC is not expecting to meet its telephone performance target in 2024-25 and has not made clear what level of service customers should expect.

Customers cumulatively spent 798 years on hold waiting to speak with HM Revenue & Customs (HMRC) in 2022-23 – more than double the time spent waiting in 2019-20, according to a new National Audit Office (NAO) report on the tax collector’s customer service.1

HMRC’s strategy is to encourage customers to turn to its digital services first so that queries can be resolved quickly and easily online. This is intended to cut costs servicing telephone calls and correspondence, as well as free up staff to serve people who need extra support.

However, it is not clear how far and fast digital will reduce demand for telephone and correspondence services. Digital services are better suited for straightforward queries and reporting changes in customers’ circumstances.

HMRC has not yet done enough to raise awareness of its digital services, increase customers’ confidence in using its online offering or understand how effectively these services meet customers’ needs.

The move to digital service has not eased pressure on traditional services as much as HMRC expected. The quality of service provided by HMRC telephone and correspondence has been far below the levels expected in recent years, and has not met annual targets.2

Advisers are taking more time on average to answer calls, and handle fewer calls than in 2019-20.3 Many avoidable customer calls are caused by HMRC itself for reasons including process failures and delays, and customers chasing progress.4

While the total number of telephone calls has reduced, the total amount of time advisers are spending on each call has increased. This means HMRC’s workload has reduced more slowly than reductions in call volumes. More taxpayers hold multiple jobs, meaning they have less straightforward needs, while fiscal drag has also brought more people into the tax system.

With HMRC’s call-handling workload falling less than expected, it has not been able to make all the staff reductions it planned. Due to budgetary constraints, it now needs to cut staff numbers by 14% in 2024-25, despite only achieving a 9% reduction between 2019-20 and 2023-24.

In March 2024, HMRC announced that it would restrict a number of its helplines, including closing its Self Assessment helpline for six months, to address both the funding pressures it faces and the backlog of queries. HMRC reversed its decision one day after announcing the changes to the public

The department had trialled closing and restricting helplines in 2023, but its evaluation of these changes did not consider stakeholder views or adequately assess the impacts of the changes on customers. 

The NAO recommends that HMRC develops more realistic plans for cutting the services it is replacing with digital channels and adopts a more customer-focused approach to encourage the take-up of new services. 

HMRC should also reduce avoidable and expensive forms of contact, for example by increasing opportunities for customers to send correspondence and documentation through secure electronic networks,6 and learn from the implementation of its digital projects.

“HMRC’s telephone and correspondence services have been below its target service levels for too long.

“While many of its digital services work well, they have not made enough of a difference to customers, some of whom have been caught in a declining spiral of service pressures and cuts. HMRC has also not achieved planned efficiencies.

“HMRC must allow more time for these services to bed in and understand the difference they make before adjusting staffing levels.”

Gareth Davies, head of the NAO

Read the full report

HMRC customer service

Notes for editors

1. The report focuses on HMRC’s immediate plans for customer service and does not examine plans for longer-term service changes and transformation. In 2022-23, advisers answered 20.5 million calls, out of 38 million call attempts.
2. Correspondence handling has been below target levels since 2019-20 and declined markedly during the pandemic, with only 45.5% of HMRC’s responses provided within 15 working days in 2021-22 (target 80%). HMRC has since reduced the stock of correspondence it had yet to process, with 1.0 million outstanding items in February 2024 requiring a response to customers, down from 2.0 million items in September 2021. It cleared 73% of correspondence within 15 working days in 2022-23, and 76% in the first 11 months of 2023-24.
3. In 2022-23, advisers answered 20.5 million calls, out of 38 million call attempts. Advisers answered 22% fewer calls in 2022-23 compared with 2019-20, but these took 21% more time to handle on average, from 11:24 minutes in 2019-20 to 13:48 minutes in 2022-23. In total, advisers spent 4.7 million hours handling calls in 2022-23, 6% less than in 2019-20. Full yearly data is not yet published for 2023-24. Pro-rated data for 2023-24, based on the first 11 months of the year, indicate the number of calls answered in 2023-24 fell to 16 million, out of 36.5 million attempts.
4. HMRC has estimated that 72% of calls in 2023-24 were caused by ‘failure demand’, which includes calls caused by HMRC’s process failures or delays, customers chasing progress and customers’ errors. This proportion has increased from 65% in 2018-19.
5. Following the 2021 Spending Review, HMRC was asked by HM Treasury to make annual efficiency savings of £75 million in customer services by 2024-25. HMRC doubled the required savings to £149 million in response to government’s efficiency and savings review in 2022-23. However, HMRC has found it difficult to achieve its efficiency targets: by 2023-24, it achieved £53 million of savings, £22 million short of its revised targets. Meanwhile, in February 2024, the Committee of Public Accounts concluded that HMRC had not been given the resources from HM Treasury to meet the service standards HMRC has committed to deliver, and that customers expect.
6. HMRC received 22 million items of correspondence in 2022-23. Around 70% of correspondence from customers comes through the post and requires scanning, manual entry into HMRC systems, or both.