Covid-19 restrictions and HMRC’s leading role in the launch of a slew of government support schemes have hit HRMC’s customer service levels and are having an impact on the amount of tax collected, latest statistics reveal
HMRC’s monthly performance update shows that in May, during the height of the first lockdown in the crisis, on average callers waited 15 minutes for the phones on the customer service lines to be answered, while over half (53.9%) waited for more than 10 minutes to speak to an advisor.
Overall waiting times have improved in the months since then. In September, the average speed for answering the phone was just over 8 minutes 22 seconds, and the percentage of taxpayers waiting more than 10 minutes to speak to an adviser had fallen to 34.9%.
However, in its own assessment of performance over the first six months of 2020, HMRC stated: ‘The department aims to maintain a consistently high level of customer service but it has been clear that since the start of the pandemic this wouldn’t always be possible. ‘Delivering at pace the level of support required on Covid-19 has inevitably meant resources that would normally be deployed on delivering tax services have been focused on these support schemes instead.’
Looking at the second quarter in detail, HMRC received 7.3m calls to its helplines. On average, calls were answered in 8:55 minutes, an improvement on the average of 11:57 minutes over the previous three months.
However, this is longer than the average of 6:39 minutes in 2019/20, and well below HMRC’s published target of no more than a five minute average wait.
Additionally, HMRC’s quarterly figures show that in the first quarter, on average 46.6% of callers waited over 10 minutes to speak to an adviser, with this proportion dropping to 38.6% in the second quarter.
HMRC’s published target is for an average of 15% of callers to be waiting more than 10 minutes.
There was also an impact on responses to inquiries by post. HMRC cleared 837% of post within 15 days of receipt during the first quarter, falling to 80.3% in the second quarter.
HMRC has also warned it is seeing a sustained impact on compliance yield and debt levels from the pandemic, with its debt balance increasing to £69.5bn at September 2020.
The majority of the increased debt balance, £37.8bn, is made up of VAT and self assessment payments on account that taxpayers were given the option of deferring as part of the government’s response to the impact of Covid-19 on the finances of businesses and individuals.
HMRC said there has been an increase in the number of customers setting up time to pay arrangements to help spread the cost of their tax liabilities.
As a result of the impact of Covid-19 on taxpayers, and on the department’s deployment of its resources, the tax compliance yield is set to reduce further.
National Audit Office report
The National Audit Office (NAO) report on HMRC’s 2019/20 accounts noted that in April and May this year HMRC opened around one-third of the number of compliance cases that it opened at the same time in 2019.
HMRC has since increased the number of new cases it has started – in June and July HMRC opened more than half of the number of cases opened at the same time in the previous year.
There has also been a significant reduction in the number of criminal investigations HMRC has been able to undertake. The NAO pointed out, for comparison purposes, HMRC achieved a compliance yield of some £7.5bn in the period April to June 2020, 51% less than the yield of £15.4bn achieved in the same period in 2019/20.