Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Accepted
HMRC's struggling customer service obstructs taxpayers seeking help with their tax affairs.
Conclusion
HMRC can also support taxpayers through its customer service functions, by answering questions or otherwise providing helpful information in a timely way. However, its customer services have also been struggling with high call volumes, particularly at certain times of year such as the January deadline for filing self-assessment returns.29 We have previously reported on a deterioration in service levels in the past few years.30 If people cannot contact HMRC when they need to, then some of those who need help to get their tax affairs right will not always be able to get support. We have also heard examples of people who want to put their affairs right but find it hard to do so because of HMRC’s approach. Examples have included inflexible repayment practices and confusing correspondence.31 25 Qq 35–36, 40, 84 26 C&AG’s Report, para 5 27 Qq 37–41, 44; Letter from Jim Harra, 24 January 2023 28 Q 41; Letter from Jim Harra, 24 January 2023 29 Q 103 30 Committee of Public Accounts, HMRC performance in 2021–22, Thirty-Third Report of Session 2022–23, HC 686, 11 January 2023 31 Qq 79, 102–103 12 Managing tax compliance following the pandemic Understanding the impact of HMRC’s compliance work
Government Response Summary
The government will continue to offer flexible repayment practices, improve the online 'Time to Pay' service with Spring Budget 2023 funding, and use £20 million in 2023-24 and 2024-25 for private debt collection agencies. These measures aim to enhance support for taxpayers struggling with tax affairs.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The department has a strong track record in providing flexible repayment practices to support people and businesses in temporary financial difficulty and will continue to do so. At the end of December 2022, around 731,000 taxpayers had around £4.8 billion worth of debt in Time to Pay (TTP) instalment arrangements. 4.3 At Spring Budget 2023, the government announced funding for improvements to the department’s online TTP service. HMRC has already extended this service to PAYE and most recently VAT. The Spring Budget funding will allow for increased functionality to allow more taxpayers to arrange their own flexible repayment plans at a time convenient for them. 4.4 The department constantly monitors whether it has sufficient resources for debt recovery work. The resource available for HMRC for its compliance work is agreed with ministers at spending reviews. The agreed level is shaped by economic factors and enables HMRC to carry out the compliance activity required to maintain a stable tax gap over the medium term. 4.5 At the Spring Statement 2022, the government provided funding for an additional 500 staff over three years for debt management activity. The recruitment process is complete, and the staff are in place supporting people and businesses to pay their tax debts. 4.6 In addition, the government provided £20 million for the years 2023-24 and 2024-25 to place additional debt with private sector debt collection agencies. This will further help to address the increase in debt levels and provide additional and flexible debt collection capacity.