Invest in tracking system to improve HMRC effectiveness, says CIOT

The Institute has also raised a number of questions following today’s announcement, including around provision for the digitally excluded.

John Barnett, CIOT Vice President, commented:

“This is a significant increase in current spending for HMRC, as promised by the new government. It is important it is spent well to make real progress in improving current HMRC customer service levels.

“HMRC are right to be aspiring to become a ‘digital first’ organisation but digitalisation has to work for taxpayers and agents, as well as for HMRC. Moving from 70% of customer interactions being digital to 90% is a big step up. It will need existing digital services to be improved, the gaps in digital services to be closed, and the level of reassurance for those users of digital services that they have done the right thing to be improved too. Plans to make such digital service improvements need to be feasible with HMRC's plans to improve their own underlying infrastructure. Traditional phone and post services need to be retained during the digital transition – and not be withdrawn or left to wither, further affecting the quality of HMRC customer service, on the basis that there will be digital functionality at some point in the future. 

“HMRC must not simply reduce the supply of support, they need to reduce demand. Our study last year, jointly with ICAEW, found that more than a third of attempts to contact HMRC are to chase progress on existing matters. The need for these could be eliminated by investing in an external tracking mechanism, enabling taxpayers and agents to track that HMRC have received their correspondence, to see where in HMRC it is being handled, and to check progress. Progress chasing should be a key function of any new digital service. 

“Today’s announcements raise a number of questions. HMRC are going to ‘eliminate all outbound post, with limited exceptions such as letters which generate revenue for the Exchequer’. HMRC need to reassure us that protection will remain for those who are digitally excluded.

“If HMRC are encouraging greater use of email and other digital services, they need to make sure they are providing secure digital ways to contact HMRC and not drive more calls to HMRC telephone helplines. Our evidence highlighted a significant appetite to communicate with HMRC digitally, but at present security issues means this is often not possible. Work in this area must be a priority.

“HMRC has worked with the Office of Value for Money to identify £773 million of technical efficiencies. HMRC need to set out what these efficiencies will be to reassure taxpayers and advisers who can sometimes see ‘efficiencies’ as a euphemism for cuts.

“We look forward to seeing further details of the government’s plans in the Digital Transformation Roadmap. To be fully effective the roadmap needs to be co-created with stakeholders, learning lessons from the implementation of Making Tax Digital.”

Note

1.  The HMRC departmental settlement is set out on pages 95-96 of the Spending Review 2025 document