Spending watchdog says HMRC in ‘declining spiral’ and needs to rethink ‘unprecedented’ job cuts

Taxpayers spent the equivalent of 800 years on hold when trying to phone HMRC’s customer service in 2022-23, according to a scathing report by the UK spending watchdog that found the public had been “let down”.

The National Audit Office (NAO) said on Wednesday that the average time callers spent waiting on the phone to HMRC surged more than 350 per cent in five years as the department struggled with funding pressures and staffing cuts that have left it “in a declining spiral”.

The report found that taxpayers who did get through to an HMRC advisor spent an average of nearly 23 minutes waiting on the phone during the 11 months to February 2024, compared with just five minutes half a decade earlier.

It added that HMRC was turning away more callers if it thought the query could be handled online instead, with the department answering 67 per cent of calls from taxpayers in 2023-24, below its target of 85 per cent.

“In the face of funding pressures, HMRC has pressed on with attempts to reduce costs despite its poor performance. HMRC and customers have been caught in a declining spiral of service pressures and cuts,” the NAO said.

HMRC: More cuts to come

The report noted that the Treasury had requested in 2021 for HMRC to achieve £75m in annual efficiency savings in customer services by 2024-25, with the department making just £53m in savings by 2023-24 – despite the government doubling its target to £149m last year.

Meanwhile, the NAO found HMRC had cut its frontline customer service staff by six per cent per cent to 18,200 in 2023-24. It added that, as of last month, HMRC planned to reduce headcount in this area by 14 per cent in 2024-25, urging it to rethink the strategy which would be “unprecedented in recent years”.

The NAO’s report echoes the findings of the influential House of Commons public accounts committee, which published recommendations for HMRC in February. Earlier this week, the Treasury announced £51m in funding “so HMRC staff can answer more calls and help customers over the phone”.

An HMRC spokesperson commented: “While customer service standards on our phone lines are still not where we want them to be, we’re making strong progress in our efforts to improve our customer service and additional funding has been confirmed by the government this week.”

“Millions more people used our highly rated online services last year – saving them waiting on the phone and freeing up our advisers to deal with those people who need extra support,” they continued.