HMRC Vision 2024

Under new plans, HMRC will reduce access to its call centres and helpline advisers at its contact centres by 30% by December 2024 in a bid to force people to move to digital services by default and to try to achieve service level targets.

Speaking to MPs at a Treasury Committee hearing on Wednesday, HMRC chief executive Jim Harra said: ‘We are not resourced to deliver our customer service standards through traditional channels of phone and post so our strategy is to reduce contact demand and to push as much as possible on to digital and online services.

‘We estimate we need to reduce by 30% by the end of next year to hit our service standards with the reduced resources that we have.

‘We have to swim against the current and bring it down so it is 30% lower otherwise we cannot meet service standards. Some of that demand is not necessary. We get about three million calls a year that could do through digital services, with customers asking what’s my national insurance number, what’s my tax code, how do I change my password.’

Newcomer to a Treasury Committee HMRC hearing was lead non-executive director Dame Jayne-Anne Gadhia, who was questioned by Treasury Committee chair Harriet Baldwin about the board’s position on digital migration and whether it would improve service standards.

Gadhia said: ‘All our board meetings focus on the challenges of service at HMRC – it is constantly under scrutiny. We definitely support moving from a phone and paper approach to a digital approach.

‘Strategically the challenge we are putting to the executive is how we get to the right place at the right time without dropping service standards due to the legacy systems we have to use.’

Harra told MPs that in the last year the number of phone calls had risen three million to 38m and volume of post had also grown significantly.

The growth of the taxpayer population is also putting pressure on HMRC, whose budgets have been cut and staffing costs means that recruitment is not an option.

‘There is an underlying growth in the number of taxpayers and those who are interacting with the more complex end of tax system,’ said Harra. ‘We do not have increasing resources to deal with that.’

The early part of the hearing focused on the abrupt closure of the self assessment helpline over the summer with two days’ notice, but HMRC officials did not apologise for the lack of communications, merely citing internal discussion which meant there was not enough time to give advance notice.   

Harra said: ‘The self assessment trial was to find out how we could push more of our services on to digital. It was important to introduce the trial as quickly as possible and wanted to lift the trial at the beginning of September so it would be finished by the time of the self assessment filing period.

‘What the interim evaluation shows is that there was some considerable success, reduced demand for advisers, and it deflected enquiries to webchat and digital assistant. It enabled us to reprioritise the staff on to other work.’

However, Harra did admit that customer satisfaction with online services was 24%, lower than the normal figure of 29%.

Angela MacDonald, deputy chief executive of HMRC endorsed the digital plan, stressing the urgency of transitioning the tax authority to a default digital-first approach and pointing to the closure of the self assessment helpline over the summer as an important test for digital alternatives.

‘We need to finish the evaluation, it is not just about demand, but about compliance. We absolutely believe that a shift to digital services has to be part of the HMRC operating model. It is absolutely our plan that we will continue to trial and move customers to digital services. We are planning another pilot,’ MacDonald added.

Another concern is that HMRC has to invest heavily in legacy IT systems to ensure that more services are available online and it does not have an answer to how to deal with complex queries short of speaking to an adviser.

‘On the positive side the investment we got in 2022-23 was good, but some of changes are really hard to deliver,’ Harra said. ‘While we have successfully delivered a lot such as MTD for VAT, need to prioritise work to deliver the highest value.

‘We must succeed in digitalising contact demand and enabling customers to self serve, and the other big flagship programme is MTD.’

However, there will be resistance to the removal of phone support for taxpayers.

‘No matter how competent the digital services that you offer, some people prefer to speak to someone on the phone. We will need to take action to encourage customers where only a digital service will be available,’ MacDonald said.

Gadhia said that the HMRC board had experience of overseeing and handling major IT delivery and transition projects. She told MPs: ‘We need to think about the actual legacy systems that need to be upgraded, one of the things that can get missed is that many of these programmes engage with customers and businesses so that can be quite complex.’

With all this in mind when you are stuck where are you going to go for help, HMRC has been struggling for some time to keep up demand and the loss of team memebres due to online filing but tax is anything but simple.

What happens when someone uses thier digital tools to answer thier query and they get this wrong, it has the potential for HMRC to lauch an investigation and extra tax, interest and surcharges could be due, is this what they want to inrease the tax take?.