HMRC has revealed it expects to see continuing pressure on its services for some time because of the “challenging economic outlook”.

The Government tax department has given an update on its performance, following publication of its Annual Report and Accounts for the 2021-2022 financial year. It said its latest figures showed it had made “solid progress” back towards normal operating levels, even as the Covid-19 pandemic continued to impact the UK.

But HMRC admitted: “Diverting resources to the Covid-19 support schemes and essential tax and tax credit services meant that many of our customer service levels have not been where we would wish them to be, with some customers and agents experiencing delays when dealing with us. We’re sorry about this and we’re fully focused on addressing these issues.”

Professional bodies send joint letter to HMRC

The performance update comes after representatives of accountants and tax agents sent a joint letter to HMRC highlighting concerns about HMRC’s service.

The letter – signed by the ATT, CIOT, ICAEW and ICAS – said: “We all continue to be contacted by our members about poor HMRC service levels, and asking what we are doing about it.”

The four professional bodies pointed out that issues seemed to exist across a range of HMRC services and could change over time.

The letter, dated 15 June 2022, added: “Feedback also indicates that performance on the agent dedicated line appears to be erratic… Members are also concerned that helpline hours have not been restored to pre-pandemic levels.”

Paperwork backlog

In the performance update, HMRC said it had been working to catch up on the correspondence that had built up during the coronavirus pandemic and to keep its helpline service levels stable.

It said customer correspondence had “increased significantly” but that it had reduced the volume from a peak of 3.3 million in July 2021 to 1.9 million by the end of March 2022.

HMRC turned around less than one third (29.7%) of customer correspondence within 15 working days in April 2021, which it recognised would have caused “frustration” to customers. By the end of March 2022, it had improved its turnaround to 65.4% within 15 working days.

Meanwhile, the proportion of callers wanting to speak to an adviser who were able to do so rose from 66.2% in April 2021 to 71.2% by March this year.

Demand on services

HMRC said the first quarter of the tax year was always its busiest period.

The update said: “We have seen a number of factors affecting demand on our services and our available resources to manage that demand – so some customers have continued to experience issues using our services. In particular, we have experienced extremely high volumes of repayment claims (90% more than usual) – mostly related to working from home expenses.

“We have also experienced some IT issues as we make vital upgrades to systems in order to improve service delivery going forward – and some of the resources we would normally expect to have at this time of year have been diverted to urgent priorities including providing support for Ukraine.”

Tax revenues

HMRC said it had generated a record £731.1 billion in total tax revenues for UK public services in 2021-2022. It also said it had protected £30.8 billion in extra tax by tackling avoidance, evasion and non-compliance.

But it added that some taxpayers’ ability to pay was being affected by issues such as supply chain pressures, high inflation, and the pandemic.

Changing economic outlook

HMRC said: “It’s clear there are further challenges ahead: the outlook for the economy is changing and the Government rightly expects all departments to become leaner, more effective and more innovative. To operate successfully, we’ll need to be agile and flexible, and tackle risks and challenges as they arise.”

And it added: “We’re focused on recovering our customer services, compliance yield and debt balance, as well as delivering on all our targets in the remaining quarters of the year.”

Our thoughts

The upheaval caused by Brexit and Covid-19 has had a negative impact on many departments at HMRC. That means we can’t rely on the timeframes we were used to before.

In any dealings with the tax body now, it’s important to factor in much longer wait times than we would have experienced in the past.

And while it’s possible to ‘chase’ HMRC, we can’t force them to deal with something more quickly, especially if the delay is due to a lack of resources. So, you shouldn’t rely on a quick response from them.

Trusted tax advice

Our team of professional tax agents are experienced at dealing with HMRC. To find out how we can help you get your taxes right, call us on 07813 434195 or email:
Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation