Despite an upbeat and confident review of HMRC's annual report and accounts for 2022 to 2023 by its executive, the results of HMRC's annual customer satisfaction survey revealed that taxpayers are still dissatisfied with the HMRC's performance and demand for phone contact with HMRC remains buoyant.
Annual research commissioned by HMRC indicates that two-thirds of individual taxpayers think that HMRC is inefficient and wastes money. A similar number thinks that HMRC does not apply penalties and sanctions equally. Small business owners had slightly more (54%) confidence in HMRC but there was a 14% decline in their confidence between 2022 compared to 2021.
In terms of cracking down on tax evasion and the 'tax gap', three-quarters of individual taxpayers, half of agents, one-third of small businesses and just under one-fifth of mid-sized businesses thought that tax evasion was widespread. Large businesses were not asked this question.
Agent's perceptions of HMRC
Confidence in HMRC amongst agents decreased in 2022. Just over a third (35%) gave a positive rating, compared with 43% in 2021. Negative ratings of confidence increased from 23% in 2021 to 32% in 2022. Agents were more likely to agree that HMRC was effective (50%) than efficient (19%) and almost seven in ten (68%) agreed that HMRC treated their clients fairly. More than half (55%) of Agents gave a positive rating for their trust in HMRC, a decrease since 2021 (61%). There was also a reduction in any positivity that HMRC applies penalties and sanctions equally, from 53% in 2021 to 49% in 2022. Positive ratings of ease remained in line with 2021 (44% in 2022).
The qualitative research found the three main drivers of using tax agents were cost, skills and capacity. Small Businesses that outsourced all tax administration lacked people with tax knowledge within the business and felt it was more cost-effective to use an agent.
Oops, and then there is the phone line issue...
There is a massive 'disconnect' between HMRC and its customers over the use of phone information lines. While HMRC has switched off certain vital phone lines for the last month, it is all set to reduce the volume of contact through phone and post by 30% by 2025 compared with 2021 to 2022. Contrast this policy decision with the results of the satisfaction surveys which show that 63% of Small Businesses would prefer to contact HMRC via telephone to manage their day-to-day tax affairs in the future and that 74% of Small Business owners would prefer to contact HMRC via telephone to solve a problem.
When it comes to tax agents, a staggering 81% say that they would prefer to manage their clients’ day-to-day tax affairs in the future by telephone contact with HMRC and 85% of Agents would prefer to contact HMRC via telephone to solve a problem for their client in the future.
Just over half of Small Businesses (54%) gave a positive rating of HMRC telephone helplines in 2022. Only 38% of Agents who had used the Agents Dedicated Line rated them positively in 2022, this was in line with the findings from 2021.
Medium-sized businesses are big users of HMRC's helplines, 50% had used the employer helpline (50%) and 41% the VAT enquiries helpline (41%). The employer helpline saw an increase in use since 2019. There was also an increase in the use of the Corporation Tax enquiries helpline (from 15% in 2019 to 21% in 2022) and the import, export and customs helpline (from 7% in 2019 to 10% in 2022). In-depth interviews, negative customer experiences with telephone helplines were found to be due to long wait times, lack of specialist knowledge and a lack of continuity in repeat communications.
By way of contrast, in his review of HMRC's Annual report and accounts for 2022-23 performance, Jim Harra, HMRC's First Permanent Secretary and Chief Executive does well to set out a positive vision of being 'a trusted, modern tax and customs department'. It collects some £814 billion in taxes and is now concentrating on becoming 'an increasingly' digital organisation. Significant operational challenges have emerged from the government's squeeze on departmental budgets. Hence the increasing cut in phone helplines and human operators to man them.
External links
HMRC's annual report and accounts: 2022-2023 performance review
HMRC individuals, small business and agents customer survey 2022
HMRC medium-sized business customer survey 2022
HMRC large business customer survey
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