- HMRC has ‘damaged trust in the tax system’ according to today’s report from the Public Accounts Committee
- One third (33.6%) of customers’ attempts to speak to an adviser were left unanswered by HMRC
- Damning list of accusations criticises HMRC for cutting off callers waiting over an hour and failing to offer a callback option
- HMRC received £51 million in funding to support its telephone lines last summer, but results have drifted further from targets
- Minefield of complexity means millions of taxpayers are already hit with penalties for missing self-assessment deadlines
“This morning’s damning report from the Public Accounts Committee highlights a litany of failings at the tax collector,” says AJ Bell pensions and savings expert, Charlene Young.
“Taxpayers will often face lengthy delays reaching HMRC in order to clarify details of the tax system and work out how much they need to pay.
“While HMRC counters that a lack of resourcing is hampering its efforts and says that improved online services means many queries can now be handled without the need to pick up the phone, those arguments won’t matter a jot to those grappling with the UK beast of a tax system, especially during this busy period of the year. That argument is even less likely to fly given it received £51 million of support from ministers last summer in a bid to get back on track with call targets, and clearly there’s a lot of work still to do.
“In the last tax year HMRC failed to answer a third of all attempts to speak to an adviser. That’s an astounding figure and illustrates perfectly why MPs have warned that HMRC’s failures have damaged faith in the tax system.
“Taxpayers have been left banging their heads on the table having spent over an hour on the phone trying to reach HMRC, only to find the call cancelled with zero explanation. To add insult to injury, today’s report suggests HMRC may have allowed this situation to develop partly in order to force more people through its online channels.
“Faced with a tax system so elaborate and convoluted, and a desperate struggle to reach anyone at the tax office able to help with queries, it is no surprise millions of taxpayers end up missing tax deadlines (see tables below). Of course, with interest rates far higher than they were a few years ago, any late payment interest now accumulates far more rapidly than it has done in the past.
“The twin problems of a growing tax burden and a squeeze on HMRC’s resources mean the situation seems unlikely to change anytime soon. Government measures in recent years have seen the capital gains tax and dividend tax allowance cut dramatically, meaning more taxpayers have small liabilities to tot up and pay to HMRC. Likewise, incoming reforms to alter the treatment of pensions on death and dilute agricultural property relief will in time mean more families are forced to consult the taxman for information on IHT.
“Meanwhile, the ongoing freeze on income tax bands, as well as the IHT nil rate band and other allowances, mean more and more people are being dragged into the tax system.
“All of this means added pressure on HMRC, which it appears ill-equipped to deal with. This is an urgent issue which needs to be addressed in order to allow taxpayers to pay their dues accurately and on time.”
Late filing penalties on income tax self-assessment
Source: AJ Bell Freedom of Information request from HMRC. *These figures, including any subsequent revisions, are calculated only once the interest accrued or late filing penalty has been paid. It is therefore likely that the figures for 2021/22 will eventually be revised upwards.
Late interest payments on income tax self-assessment
Source: AJ Bell Freedom of Information request from HMRC. *These figures, including any subsequent revisions, are calculated only once the interest accrued or late filing penalty has been paid. It is therefore likely that the figures for 2021/22 will eventually be revised upwards.
