Recommendation 2

HMRC’s digital services have not sufficiently reduced demand on the phone and HMRC has failed to prioritise the resources needed to sustain an appropriate standard of telephone service. HMRC has been working to become a ‘digital-first’ organisation since 2010 and hopes to replace traditional forms of contact with digital services. However, telephone 3 demand has remained high, with 37 million telephone calls in 2023–24. HMRC says it has not had enough resources to deal with all the contact it has been receiving with, for example, 3 million more income taxpayers in the last two years as a result of freezing tax thresholds. In May 2024, HMRC received £51 million additional funding to cover approximately 1,500 staff for 2024–25 to bring HMRC’s customer service to target levels. However, we are concerned that performance will deteriorate again if HMRC struggles to meet further increases in demand from customers. HMRC plans to publish a ‘digital roadmap’ in Spring 2025 to set out the digital services it is expecting to develop and the investment it needs. recommendation HMRC should ensure it allocates sufficient resources to customer service now and in the future to meet its performance targets. It should establish “guard rails” to protect services. Where service levels fall more than five percentage points below target levels this should trigger a corrective response, with additional resources deployed if needed.