UK tax agency's digital services not good enough to take strain off phone lines

Watchdog says taxpayer assistance is getting worse

Phone services for the UK tax authority continue to deteriorate, and the digital systems that were supposed to take up the slack aren't good enough.

Parliamentary watchdog the Public Accounts Committee (PAC) said that in the last financial year, 62.7 percent of callers to His Majesty's Revenue & Customs (HMRC) waited more than 10 minutes to speak to an advisor, up from 46.3 percent a year earlier. Meanwhile, demand on phone and postal services was growing by more than 10 percent a year, owing to increased tax complexity and new rules.

HMRC's answer was to push people, businesses, and their advisors onto online digital services, but their performance was not sufficient to make up for the demand offloaded by the phone system.

"It is … insisting callers use digital services where they are available, and is closing helplines and redirecting callers to online guidance," a PAC report said. "HMRC insists it has good-quality digital services for customers to manage their taxes but this is not the experience shared by the taxpayers and their agents that got in touch with us."

The watchdog said HMRC claimed the majority of taxpayers had filed taxes digitally, and that it provided safe and secure digital services. "However, several organisations that wrote to us felt that HMRC had implemented its digital services poorly and with inadequate testing, and that they lacked the functionality needed for taxpayers and agents to use effectively. HMRC said there are still a lot of people that do not know about the array of digital services that it provides and that it needs to draw people's attention to them," the report said.

The PAC recommended that HMRC customer services get the resources they need until its digital services adequately address the needs of taxpayers and their agents.

In July last year, HMRC's annual report found its customer service was adversely affected by IT problems, particularly towards the end of 2022.

"Between 1 and 5 December 2022, HMRC closed all of its telephone-based services due to poor call quality and the inability of advisers to access relevant information. Webchat was also unavailable at this time," official government auditors said in the report.

The department estimated it would have handled around 99,000 calls from taxpayers at the time the telephone services were suspended. The specific cause was not revealed. In 2022-2023, HMRC recorded 45 separate instances of significant disruption to its IT services, up from 25 in 2021-2022.

Improving its citizen and business-facing digital services is not the only challenge for HMRC. The tax collector is also in the midst of buying and implementing a new ERP system.

In December last year, HMRC launched a £500 million procurement for software and technical services suppliers to replace its SAP ERP system with subscription-based software.

The procurement – launched in line with the 2021 shared services strategy – will also provide vital software for the Department for Transport and Department for Levelling Up, Housing and Communities under the umbrella of the so-called Unity program.

Last summer, the government's Infrastructure and Projects Authority rated the project "red," saying there were "major issues with project definition, schedule, budget, quality and/or benefits delivery, which at this stage do not appear to be manageable or resolvable." ®

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