ICAS raises concerns about HMRC service levels
By Susan Cattell, Head of Tax Technical Policy
18 July 2023
HMRC has published the Charter annual report on their performance against their Charter standards. We contributed to the Charter Stakeholder Group input to the report, which highlights significant concerns about HMRC service levels.
What is the HMRC Charter?
HMRC is required to have a Charter which includes “standards of behaviour and values to which HMRC will aspire when dealing with people in the exercise of their functions”. The current Charter was launched in November 2020 following a consultation to which ICAS contributed.
HMRC is also required to produce an annual report reviewing the extent to which it has demonstrated the standards of behaviour and values included in the Charter.
The Charter Stakeholder Group
The group is made up of representatives of the tax community, including ICAS, ICAEW and the CIOT. We hold regular meetings with HMRC to discuss how the Charter is being reflected in taxpayer and agent experience of dealing with HMRC. We also give formal input about how HMRC is performing against the standards in the Charter, for inclusion in the annual report.
2023 Charter annual report
The report for 2022-23 was published on 17 July 2023. In his opening message the Chief Executive and Permanent secretary for HMRC, Jim Harra, commented on the mixed feedback on HMRC’s services. He mentioned that 82% of customers using HMRC’s online services were satisfied with their experience. However, he also noted that 2022 to 2023 was a challenging period for HMRC across many of its traditional phone and post services. Whilst there were some specific short-term factors, such as high levels of demand, plus some IT disruption due to system upgrades, HMRC’s customer base is growing, and more customers have complex needs.
These factors are creating significant operational challenges for HMRC and making it harder to meet the Charter standards. With a reducing departmental budget, HMRC hopes to offer more and better online services – and to encourage taxpayers to use them.
HMRC commissions independent customer surveys for five customer groups each year. In 2022 the proportions of customers rating their overall experience of interacting positively with HMRC were:
- 65% of Individuals (62% in 2021)
- 74% of Small Businesses (76% in 2021)
- 52% of Mid-sized Businesses (57% in 2021)
- 81% of Large Businesses (83% in 2021)
- 45% of Agents (48% in 2021)
Charter Stakeholder Group (CSG) input to the 2023 report – service levels are the key concern
The CSG provided input to the report, through an overall assessment in section four of the report and comments on the individual standards in Appendix 3. In order to provide evidence-based feedback, CSG members conducted a survey of agents and taxpayers during February 2023. Respondents were asked to give a score out of 10 for HMRC’s performance against each of the Charter standards, with 1 being the lowest and 10 being the highest. They were also asked, for each standard, what did HMRC do well and what could it improve. The full results of the survey were shared with HMRC.
As last year, complaints about HMRC’s service levels permeated the feedback received. ‘Being responsive’ had the lowest score, with an average of just 2.3 out of 10. ‘Making things easy’ and ‘getting things right’ also scored poorly, at 2.7 and 3.4. It is disappointing that these scores were so low, as these standards are crucial to the effective operation of the tax system.
The remaining standards typically address the context in which HMRC operates, and these scores were higher, particularly around mutual respect and data security, the latter scoring the highest average score in the survey of 6.5.
The CSG survey also addressed awareness of the Charter, and HMRC’s accountability against it. Just over 75% of respondents were aware of the HMRC Charter, though awareness was much greater amongst agents (80%) than taxpayers (56%). HMRC is taking steps to embed the Charter amongst its staff, and the results indicate that more needs to be done to promote the Charter to its customers.
Over 85% of respondents do not think that HMRC is held sufficiently accountable for its performance against the Charter. This percentage was higher amongst agents (88%) than taxpayers (79%). Two themes emerged from the freeform comments. Firstly, whether there is sufficient internal accountability within HMRC ie whether the performance of HMRC staff is adequately managed. Second, that there is no external accountability for HMRC against the Charter.
One comment largely sums up the mood amongst respondents: “There are no consequences if HMRC get things wrong. They hold taxpayers and agents to much higher standards than they hold themselves and there is little or no recourse for the extensive costs and time wasting caused by HMRC incompetence and delays. They should be held to the same standards (deadlines) and pay compensation when they get things wrong - this might focus their minds and make them try to do things better. At the moment, there is no incentive for them to improve at all!”
CSG comments on individual standards, based on survey responses
Getting things right (average score 3.4)
There was some praise for specialist helplines and the agent dedicated line. Information on GOV.UK was praised by some for its clarity and the fact that it helps people who have simple tax affairs. There was also acknowledgement that many letters and communications from HMRC set out key deadlines and taxpayer rights clearly.
However, the view from the majority of respondents was that HMRC was not doing anything well under this standard. The accuracy of guidance and information provided by HMRC continues to raise significant concerns, particularly among the agent population who can most readily tell when the information is incorrect. However, the issue is most acute for taxpayers, who often automatically assume information from HMRC is correct.
Areas where HMRC could improve included more timely responses and consistency of information/answers.
Making things easy (average score 2.7)
Respondents highlighted that HMRC performs well for taxpayers with simple affairs and where processes can be undertaken online, particularly when agents are provided with the relevant functionality. Otherwise, getting a response and action via correspondence or telephone can be extremely difficult and time consuming, even for simple issues. More digital functionality to self-serve, along with improvements to GOV.UK online forms and guidance, are needed.
It was clear from the comments made that it was impossible to separate the poor response times from other initiatives undertaken by HMRC, which will continue to lack impact until service levels are significantly improved. HMRC’s poor service levels, the lack of timely responses and the lack of certainty on response times, dominated the feedback on where HMRC should improve.
Concerns were raised over the lack of joining up of HMRC services (eg CGT and Self-Assessment reporting), and the Government Gateway registration processes which can create barriers to register for taxes. There was a sense that HMRC makes its own life easy, rather than making life easier for taxpayers and agents, building products from its own perspective rather than that of taxpayers and agents.
The common theme was frustration with the cost of HMRC inefficiencies to taxpayers, agents and HMRC itself.
Being responsive (average score 2.3)
Agents were consistently unhappy with the time taken to get a response from HMRC, regardless of communication method used. HMRC’s speed of response was considered inadequate, especially when a referral to a technical colleague was needed because the initial HMRC operative lacked the technical expertise to answer their question or resolve their issue.
Multiple comments mirrored the following complaint: “There are far too many call handlers who never seem to know the answer to a query, put you on hold, then cut you off!” This is particularly concerning if it indicates some operatives are hanging up on difficult queries, as this is costing taxpayers and agents significant time and suggests a lack of oversight and management. If is instead caused by automatic cut-off after a certain time, this is an indictment of the time taken to respond to calls by a customer-facing organisation.
Agents indicated a generally low level of confidence in HMRC operatives. For simple queries that didn’t require the operative to go ‘off script’, satisfaction from agents seemed generally high. For anything more complex, agents were dissatisfied.
Treating you fairly (average score 4.8)
CSG welcomed the work undertaken by HMRC’s Compliance Operations Directorate Professionalism and Customer Experience (PaCE) team where new officers are being trained on how to deliver their commitments under HMRC’s Charter. Officers are encouraged to analyse and evaluate the available information and make reasoned, impartial, judgements based on the law.
There was complimentary feedback about the politeness and helpfulness of individuals, though unfortunately such comments are often caveated with the view that being able to speak to someone in the first place is difficult, and that the front-line staff often lack adequate tax knowledge to be of genuine assistance.
In general, the feedback received was that officers do want to treat taxpayers equally and fairly, and where the points in question are simple and straightforward this is usually the case. However, where more complex issues arise, the view was that officers lacked relevant tax knowledge, and as a result were inconsistent in their application of guidance and legislation to the facts of cases, creating frustration and annoyance.
Being aware of your personal situation (average score 4.1)
A diverse range of comments were received from taxpayers and agents. While linkages across HMRC appear lacking, and frustration is often experienced when trying to access the right person or service, many respondents acknowledged a willingness to listen in most cases. However, greater consistency may be achieved through better staff training in this area.
Taxpayers in particular emphasised the need for HMRC to be more mindful of their business environment and wider personal situation. Some claimed that delays have had a negative impact on their mental health and, at times, HMRC appears unapologetic for significant delays. Taxpayers who commented on being advised to talk to Samaritans did not regard this as helpful. The perception being that HMRC is more understanding of taxpayers’ mental health issues when dealing with their agents.
Not all responses from HMRC recognise that the taxpayer may not have the same level of understanding of the rules, or even that English may not be the taxpayer’s first language. Some felt that reasonable adjustment in communication could also be made more readily for those with a disability. HMRC’s Extra Support Service generally works well, but some taxpayers who need extra support fail to be recognised as such.
Recognising that someone can represent you (average score 5.1)
Respondents felt that HMRC did recognise a role for agents and dealing with those who had been properly authorised. However, this was not always reflected in HMRC’s practice, as they did not always contact the appointed agent, in spite of being asked to do so, but communicated directly with the taxpayer, in some cases causing stress. Similarly, agents were not always copied into correspondence sent to their clients.
Fundamentally, it was noted that HMRC has still not delivered its commitment that agents should be able to see and do what their clients can see and do. These gaps can include fundamental steps such as registering for a tax (eg plastic packaging tax).
Agents complained about the multiple different authorisations required for HMRC services and the lack of a joined-up approach to authorisation, particularly where they felt that some of the add-on services should have been covered by an existing authority. This was compounded by ongoing difficulties with the digital handshakes required to authorise agents for many services, and a better way of providing authorisation is needed for the digitally excluded or digitally challenged. Problems were also encountered where taxpayers wanted more than one agent to act for them on different aspects of their tax affairs, because HMRC’s systems often do not accommodate this. Some taxpayers also noted difficulties in appointing friends or family members to deal with HMRC on their behalf.
There was support from agents for the agent dedicated line – but concerns that it was now refusing to deal with some issues - and for the agent online forum, although there were some complaints about the time taken to deal with issues and issues being closed down without being adequately dealt with.
Keeping your data secure (average score 6.5)
Taxpayers and agents generally consider that HMRC is meeting the Charter standard on data security.
Some respondents expressed concern about the additional risks arising from HMRC staff working from home. There were reports of HMRC letters being incorrectly addressed, including being co-enveloped with mail relating to a different taxpayer, or because an address had been incorrectly updated in an HMRC system. Those that were critical usually had a specific experience of their HMRC online account being comprised, or of some other breach. Most acknowledged the security procedures that HMRC has in place; some thought them to be occasionally excessive. Concerns were expressed over the difficulty that taxpayers and agents have in determining whether a ‘phone call from HMRC is genuine. Some commented negatively about the tax affairs of senior politicians and their families being in the public domain; although HMRC only commented with the specific permission of the individual, there is a risk of a perceived breach of confidentiality.
Mutual respect (average score 5.4)
Feedback was very mixed. Most taxpayers and agents find call centre and other HMRC staff to be polite, helpful, respectful and doing their best, but this is not always the case. When it is not, it often seems to stem from lack of knowledge or being rushed and unwilling to really listen and understand the issue and refer it appropriately. Too often this leads to poor quality or inaccurate advice. The tone of written communications is sometimes seen as aggressive.
Criticism was mostly aimed at HMRC as an organisation and its apparent acceptance of poor service performance, rather than at individuals. The long telephone waiting times and the frequency of calls being cut off are viewed as disrespectful. The pre-recorded messages on helplines are often seen as patronising. Taxpayers and agents consider the excessive waiting times for responses to written communications to illustrate a lack of respect.
Let us know your views
ICAS responds to many tax calls for evidence and consultations, as well as producing tax policy papers and reports. We also regularly attend meetings with HMRC at which service levels, delays and other issues are discussed, and we raise problems being encountered by Members. We welcome input from Members to inform our work; email tax@icas.com to share your insights and
