The chairman of a spending watchdog has urged HM Revenue and Customs (HMRC) to “take seriously” its recommendations, including that it should put customers’ needs at the heart of its decision-making and allocate sufficient resources to customer service.
A report, published by the Public Accounts Committee (PAC) on Wednesday, highlighted concerns that HM Revenue and Customs (HMRC) has been degrading its own services “as a matter of policy” and damaging public confidence in the tax system.
It has sparked a robustly worded exchange of letters between leaders of the two organisations.
Sir Jim Harra, First Permanent Secretary and chief executive of HMRC said in a letter to PAC chairman Sir Geoffrey Clifton-Brown: “I am disturbed by the committee’s claims that HMRC is deliberately degrading its customer services performance as a matter of policy and that service levels continue to deteriorate.
“I refute these claims in the strongest terms.”
Sir Jim continued: “HMRC has always deployed its available resources to maximise its performance across all customer services channels and continually strives to meet its service standards.
“In 2023-24, there was a growing taxpayer population with more complex needs. Combined with budget constraints, this meant that we were not able to meet our service standards.
“We have apologised for the inconvenience which this caused our customers.”
He said HMRC has received extra funding so it can improve its telephony service performance.
Sir Jim said: “Since then, we have made strong progress towards meeting our telephony and correspondence service standards and wait times have reduced. We aim to maintain this improved performance through the remainder of 2024-25 and meet our service standards through 2025-26.”
Sir Geoffrey said in his letter to Mr Harra that he was “disappointed to read your letter of January 21 responding to my committee’s report on HMRC’s customer service and accounts”.
He continued: “I urge you to take seriously my committee’s recommendations which include calls for HMRC to put customers’ needs at the heart of its decision-making and allocate sufficient resources to customer service.”
Sir Geoffrey’s letter said: “It is reasonable for the committee to raise concerns and draw inferences from the evidence it receives.
“Our report therefore concluded that ‘we are concerned that it (HMRC) has sought to degrade its telephone service to drive taxpayers to digital channels’.
“My committee could also have pointed to the long-term decline in customer service performance without corrective action being taken.
“The attempted closure of phonelines was arguably a doubling down on service degradation on top of reduced call handling performance. Indeed, cutting off customers who have waited up to 70 minutes is completely unacceptable in any circumstance.
“In relation to your claim that some improvements to performance negate any of the report’s findings such as ‘that service levels continue to deteriorate’, the report is clear that references are to performance up to 2023-24 and that it was worse than before.”
The letter added: “As you have selectively quoted figures from an eight-month period during 2024-25 it remains to be seen whether this is sustained for the whole year and so qualifies as a comparable year’s performance.
“The likelihood of seeing significant overall performance improvements for 2024-25 seems especially low given that this potentially unrepresentative snapshot excludes the figures from the challenging period in the run-up to
the self-assessment deadline.”
Sir Geoffrey added: “I look forward to receiving HMRC’s full and considered response to the substance of the committee’s recommendations within the next two months.”
The letters were published by the PAC.