NAO Report HMRC customer service May 2024

The NAO has published a report into HMRC’s customer service, which concludes that performance has been below expected levels for telephone and correspondence for almost all of the last five years.

The report states that HMRC’s telephone and correspondence services have been falling below the expected service levels for too long and HMRC has not achieved planned efficiencies. To achieve value for money HMRC must provide a timely and effective service for customers needing help with their tax or benefits, even as it attempts to reduce costs.

Forecasting how far and fast digital services will reduce demand for telephone and correspondence is highly uncertain and, so far, digital services have not had the effect HMRC hoped for. While the total number of telephone calls has reduced, the total amount of time advisers are spending on each call has increased, meaning HMRC’s workload has reduced more slowly than reductions in call volumes.

While many of HMRC’s digital services work well, they have not made enough of a difference to customer contact levels. In the face of funding pressures, HMRC has pressed on with attempts to reduce costs despite its poor performance, so that HMRC and customers have been caught in a declining spiral of service pressures and cuts.

HMRC have been unable to cope with telephone demand and consequently fallen short in processing correspondence and dealing with telephone calls according to procedures, creating further service pressures. HMRC felt it had no choice but to close phone lines to catch up and compel people to use digital services but have had to reverse this approach in the face of opposition!

HMRC’s approach to cutting services as it introduces new digital solutions has been too aggressive and HMRC needs to allow more time for new services to bed in, understand the difference they make and then make staff reductions when the benefits are demonstrated.

In addition, HMRC cannot be certain that tax revenue is not suffering as a result. There are opportunities to reduce unnecessary levels of contact and improve efficiency but HMRC must demonstrate it understands how to make these gains and form more realistic plans for how to deliver these, while ensuring it maintains service levels.