Taxpayers Left on Hold: Understanding the HMRC Call Waiting Crisis
Tax compliance is rarely straightforward, but the 2022/23 tax year presented taxpayers with an additional challenge: the struggle to get through to HMRC. Collectively, callers spent over 7 million hours on hold last year—the equivalent of 798 years. This stark figure represents a sharp decline in service quality, more than doubling from 3.2 million hours in 2019/20.
The growing wait times highlight more profound, systemic challenges within public services, compounded by funding constraints and workforce pressures. With no immediate solutions on the horizon, the outlook for taxpayers and businesses remains uncertain—underscoring the urgent need for reform and investment in this critical area of public administration.
Worsening delays are prompting pressing questions about the future of HMRC’s service delivery. Can digitisation ease the burden, or are taxpayers facing an even steeper climb before improvements take hold?
The scale of the problem
While there is no doubt that the “Making Tax Digital” project will make a difference in the long term, this doesn’t help those trying to contact HMRC today. In order to appreciate the scale of the problem, we need to compare and contrast available data:-
- Callers waited an average of 23 minutes to speak to someone, compared to just five minutes in the 2018/19 tax year
- A record number of callers give up after failing to connect, leaving their issues unresolved
- HMRC answered 67% of calls in the first 11 months of the 2023/24 tax year, down from 77% two years earlier and nowhere near the target of 85%
- Only 42% of calls to HMRC were handled by an adviser
These figures are disappointing, to say the least, in isolation, but the cumulative impact is most alarming. Taxpayers, business owners, and accountants are struggling to speak to HMRC to rectify errors and request guidance; even those able to contact HMRC by email or post are waiting months for relatively minor issues to be rectified.
This will inevitably lead to more conflict between HMRC, taxpayers and advisers, and no doubt the distribution of significant fines and further retribution.
Causes of the decline
As with many public services, numerous challenges have created the perfect storm. These include:-
Funding pressures
In reality, enough is never enough when it comes to public services, especially HMRC. However, budget cuts across the public sector have reduced HMRC’s capacity to maintain adequate staffing and service levels. We are now in a situation where inexperienced employees are often being left to manage complex situations. While the government recently made £110 million available for a specialist Taxpayer Protection Taskforce within HMRC, other areas of the organisation are struggling.
Workforce challenges
Whether due to a lack of forward planning, the ongoing impact of the pandemic and people working from home, or simple staff shortages and high workloads, burnout is on the rise, and morale is low. Despite being a lifeline for many people, there are also plans to reduce call centre capacity, whether through closures or shorter opening hours. How will that help?
Digital transformation
While the digital revolution has impacted all areas of business to a certain extent, HMRC’s shift to online services has left vulnerable groups struggling to access support. Leaving the telephone service as their only option exacerbates the current problem, leading to enhanced financial and mental pressures.
Broader government priorities
While slightly controversial, many believe that resources originally set aside for HMRC (and other public sector services) have been diverted to “more pressing” issues such as tackling Brexit. Whether true or not, we know there is increasing pressure on the public purse and intense lobbying for funding.
The impact on taxpayers and businesses
It’s easy to get distracted by the headlines, but the most damaging impact is on taxpayers and businesses (and that’s before we even consider lost tax revenues). This creates a ripple effect not only for those looking to address tax concerns but also for businesses looking to expand and even start-ups.
Taxpayers
Delays in resolving tax issues have led to record penalties and additional financial stress for individuals. This includes those looking to adjust their benefit records, often spending hours on hold and being unable to speak to an adviser. Regarding self-assessment, there is still the option to submit paper returns, although the form must be downloaded from the HMRC website.
Businesses
Ongoing changes in the tax regulations and payment/reporting procedures regarding VAT, income, capital gains, and corporation tax, not to mention national Insurance, are further complicating returns for businesses and business owners. Relatively simple queries regarding VAT, for example, take months (sometimes years) to conclude, leaving companies and business owners cut adrift.
Professional services
In previous times, when an individual or a business had any tax queries and could not contact HMRC, they would go to their accountant. While this filter has allowed many queries to be answered without the assistance of HMRC, where records need to be corrected, or external advice sought, accountants are also experiencing unacceptable delays. This is causing frustration and placing significant strain on client relationships.
Those who discount ongoing issues with HMRC as short-term problems do not appreciate the broader picture. Actions taken or not taken today can greatly impact personal and business finances, and confusion and uncertainty are already taking their toll.
Potential solutions and recommendations
In these situations, the natural reaction is to demand more money, but some issues today relate to funding shortages in specific areas. While there are several options, targeted funding will eventually (hopefully) lead to a significant improvement in HMRC service levels. This is also where ongoing communication with your accountant can help to resolve many issues without HMRC involvement.
Short-term fixes
Even though increasing temporary staffing levels during peak periods would greatly assist, with HMRC funding under pressure, this is unlikely in the short term. Consequently, whether considering your personal tax or business returns, there are numerous enquiries that you can delegate to your accountant. Being more familiar with HMRC processes and how to “get things done” will help them navigate the system more efficiently.
Long-term investment
Many experts believe that reduced investment in IT and an inability to maximise the benefits of AI have contributed to short-term HMRC service level issues. Perhaps HMRC has been overly focused on digitising the system, which has left other areas under extreme pressure. Whatever the case, there is no doubt that there are significant benefits associated with digitisation and expanded investment in IT and AI, but this is a long-term process.
Improving digital systems
Many accountants already have cutting-edge technology and access to HMRC’s updated systems. This allows them to streamline client queries and reduce the overall burden on HMRC. There will still be areas requiring HMRC’s assistance, potentially experiencing extended delays, but this filter system is very useful. Working with your accountant, you can also ensure the accuracy of returns and the inclusion of supporting data, thereby reducing the number of issues and potential rejections.
Additional solutions
Aside from the fact that there needs to be political will on all sides to support a fully funded HMRC, there may be opportunities to learn from overseas models. For example, the Canadian Revenue Agency recently implemented a call scheduling system, drastically reducing waiting times. While this may seem at odds with HMRC’s move towards everything digital, could it be a relatively simple and effective short-term solution?
Conclusion
In reality, relative funding for HMRC has been in decline for some time and the ongoing switch to digital services has exacerbated an already challenging scenario. We know that the crisis within HMRC is symptomatic of deeper systemic issues in public services. However, considering the millions of pounds of lost tax revenue, does this not create a potential self-funding scenario?
All stakeholders must work together, but for many individuals and businesses, the role of their accountant is even more critical. We have a team of experienced experts who can assist with tax queries. Where HMRC involvement is unavoidable, our enhanced understanding of the system should at least reduce delays. Contact us today, and we can help you prepare for the future and resolve any outstanding issues.