Invest in customer service to improve trust in HMRC, says tax institute

The Institute is responding to a new report from Parliament’s Public Accounts Committee¹ which highlights declining trust in HMRC as well as the growing cost of tax administration for HMRC and taxpayers alike.

Additionally, CIOT has welcomed a call in the report for HMRC to learn lessons from its implementation of Making Tax Digital so far and put the needs of taxpayers at the heart of plans to improve digital services.

CIOT Director of Public Policy, Ellen Milner, commented:

“Improving service levels is central to rebuilding trust in HMRC. Taxpayers trying to comply with their obligations need to be able to get answers to their questions and registrations and refunds need to be processed quickly.

“Until these problems are properly addressed, we will continue to see an impact on the tax system as a whole, the ability to do business and the wider economy.”

The CIOT says the PAC’s findings support its own repeated calls for investment into HMRC performance, alongside new tools to support emerging digital platforms alongside traditional contact methods such as telephone helplines.

A survey of tax agent interactions with HMRC last year,² conducted jointly by CIOT and ICAEW, found that HMRC could save an estimated 1.7 million hours of call handlers’ time every year, or £36 million, if it put a tracking system in place. The survey also estimated that one in three calls to a HMRC helpline is progress chasing.

Ellen Milner continued:

“We support digitalisation of the tax system but it has to work for taxpayers as well as for HMRC.

“As the PAC observes, in its early stages, Making Tax Digital (MTD) was imposed on businesses without adequate consultation. The forthcoming Digital Transformation Roadmap provides a golden opportunity to plan out how HMRC arrives at a ‘digital first’ destination, but to be fully effective the roadmap needs to be co-created with stakeholders, learning lessons from the implementation of MTD. 

“Future testing of new systems needs to be more extensive and robust than it has been to date.

“The government’s three priorities for HMRC are to improve customer service, close the tax gap and modernise and reform the tax system. All three require effective processes and continual investment.

“The upcoming Spending Review needs to provide the resources needed for HMRC to replace its legacy IT systems as well as continuing to support taxpayers who need to contact them through traditional routes.”

Notes for editors:

1. Public Accounts Committee report: The cost of the tax system.
2. HMRC could save 1.7 million hours by eliminating "progress chasing" calls, study shows.