The House of Commons Public Accounts Committee (PAC) is a cross-party group of MPs. Their report on HMRC for 2015-16 slammed HMRC’s shocking customer service blunder and this year’s report is warning of a repeat performance. Last year, HMRC cut 5,600 customer service jobs and, unsurprisingly, their customer service level suffered enormously. Taxpayers wasted a grand total of 4million hours waiting for HMRC to answer the phone, amongst other things.
The PAC’s new report for this year highlights a considerable number of concerns over the impact of their development plan on future customer service.
What is HMRC’s plan?
HMRC’s overall aim is to become “one of the most digitally advanced tax administrations in the world”. They are also working towards the objective of saving £98m by 2021 by:
- Cutting overall staff numbers by 16%
- Decreasing specific customer service staff by 1/3.
- Having some staff move across to specialist divisions that focus on tax avoidance and evasion
- Closing 90% physical tax offices (137 in total), relocating staff to one of 13 ‘regional centres’
The reasoning behind cuts to customer service staff is that income taxpayers will move online to sort out more of their tax issues. This includes both employed, self employed and limited companies.
They have taken a lot on at once: cut spending, move the majority of staff and completely restructure how the department operates. All this while settling into a brand new IT contract and implementing any changes that are required due to Brexit negotiations.
PAC’s reaction
Basically, the committee is “not convinced” that HMRC have any kind of back-up strategies in their plan to stop another customer service disaster. Last year, a swift recruitment of staff was the only way to get themselves back on track and yet there is no consideration of this as a possible outcome in the current plan.
The report also criticises HMRC for “stacking a great deal” on taxpayers’ preparedness for taking more of their tax affairs online. What if taxpayers’ need for customer service staff does not go down at the same rate as the number of staff cut? The committee’s chair, Meg Hillier, called it “disconcerting” that they have worries about HMRC’s customer service so soon after the last debacle.
As reported in the Independent by Andrew Woodcock, she said: “The lack of a convincing fallback plan to safeguard service as HMRC undergoes significant change remains a looming threat to its ability to collect tax from individuals simply trying to pay their fair share. HMRC’s senior management cannot afford to be complacent about the catastrophic collapse in customer service in 2014/15 and the first half of 2015/16, nor about what is at stake should their projections about demand for call centres prove wrong. Contingency planning should not be an optional extra. By the spring, we will expect to see evidence that HMRC has agreed measures with the Treasury to ensure it is not left playing catch-up at taxpayers’ expense.”
Main Players
HMRC’s Chief digital and information officer has already left and the committee’s report raises concerns that if any further staff with main roles leave it would, “damage HMRC’s capability to deliver transformation and manage the risks when its IT contract ends”.
Concentrix
This PAC report reiterates their finding that “unnecessary hardship and suffering” was endured by people claiming tax credits because of the failure of HMRC’s contract with Concentrix. This private firm were hire to look at errors in the system and fraud.
Closing the gap
According to HMRC, they have closed the gap between how much tax is owed and how much is actually collected from 8.3% (2005-06) to 6.5% (2014-15) – worth £36billion. The PAC’s report wonders if that may be “painting too rosy a picture”. They also recommend that there is more clarity about the tax situations of multinational businesses, “to increase the pressure on them to pay their fair share of tax”.
HMRC’s comment
HMRC told The Independent:
“We now consistently answer 90% of calls first time, in an average of less than five minutes. We have invested heavily in customer services, recruiting more than 3,000 new staff who are also available outside normal office hours when many of our customers choose to call us. This is alongside a new range of popular digital channels for customers to get the information and support they need without having to pick up a phone or pen.”
“Efforts to crack down on tax avoidance, evasion and fraud have also secured in £26.6 billion over the last year. We’ve also led the way on improving global tax transparency and tackling tax avoidance by multinationals. As a result, for the first time, we are starting to receive details of UK taxpayers’ offshore financial accounts in more than 100 countries and can now find out what tax multinationals have paid in each country in which they operate.”
All good news, but not really tackling the issues raised by the PAC’s report.
Another opinion
Mark Serwotka, Public and Commercial Services Union General Secretary, points out: “The committee again makes it clear that cutting too many staff in HMRC damaged the service provided to taxpayers, yet the department is absurdly pressing ahead with plans to close 90% of its UK offices and axe thousands more employees. There is now an overwhelming case for these plans to be halted to allow for a proper public debate and parliamentary scrutiny of the kind of revenue collection service we need and the staff and resources it will take.”
What’s your take? Are you happy to go digital with your tax affairs?
