Will £51m really fix HMRC’s customer service helpline?

by | May 16, 2024

The Treasury has this week announced extra funding of £51m for HMRC customer service, following the recent phone line u-turn debacle and admission by Jim Harra at the Treasury Select Committee (TSC) that HMRC isn’t resourced to provide the standard of service that customers deserve. The money is intended to provide 1,500 additional telephone helpline staff, and is focused on 2024-25 performance only.

After years of deteriorating service and calls from the profession for an increase in better trained staff, this is just a sticking plaster over an ingrained problem that needs a longer-term strategy and consistency of funding to resolve.

In TaxWatch’s recent report on HMRC’s telephone service, we identified the obvious issues around declining numbers of customer service staff and the increase in both the overall number of taxpayers and those with much more complex affairs. Yesterday’s NAO report found that the cumulative time taxpayers waited on the phone was 800 years (7million hours) in 2022-23, up from 365 years in 2019-20. Average call lengths (for people who did get through) have increased from 11:24 minutes to 13:48 minutes since 2019-201hmrc-customer-service.pdf (nao.org.uk) with the NAO speculating on potential reasons including general increasing complexity, raising more than one issue when they do get through and the efficiency of call handling staff.

And this latter point is critical for making decisions on how to resolve this situation long-term. The NAO reports that in HMRC’s own audit of sampled telephone and post cases, they found that around a third of advisers didn’t fully follow procedures. At the recent TSC hearing, Jim Harra reported that he was having to increase the pay of nearly a third of his staff, including helpline and post teams, to comply with increases in the National Living Wage (NLW), which HMRC itself is responsible for enforcing. Members of the profession2https://www.accountingweb.co.uk/tax/hmrc-policy/hmrc-minimum-wage-reveal-branded-scandalous recognised that the range of issues to be handled by helpline staff is broad and complex, and that they are often likely to be dealing with disgruntled taxpayers. NLW does not appear sufficient for such a role. Why would anybody want that job if they could be paid the same for stacking shelves in a supermarket?

In this context, the £51m investment seems wholly inadequate. A recent job advert for customer service advisers at HMRC gives more detail3https://www.brookstreet.co.uk/job/customer-service-advisor-telephony-8. This pays ‘up to’ £13.04 per hour (NLW is £11.44), the equivalent of an annual salary of just over £25,000. This is a short-term contract, starting between June and September 2024, and only running until March 2025. Crucially, despite being tax novices, they receive only two weeks training, which seems laughable for the range of issues they are expected to deal with. Beyond that, where is the incentive for them to deepen their experience or perform well if they will be leaving within six months? Bearing in mind the resources required to help train and mentor new recruits, which takes time away from more experienced staff, it seems hard to believe that this short-term boost will have any significant impact on the problems HMRC is currently experiencing, and no longer-term benefit into the future.

TaxWatch has consistently advocated for a long-term and sustainable funding settlement on which to rebuild capacity in customer services and compliance. £51m for the remainder of the year to recruit more staff doesn’t count as meaningful ‘investment’. There seems to be a lack of understanding within government about the complexity of managing our tax administration. Until that changes, HMRC won’t have the people with the right skills and experience they need to be a high-performing department.

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