The following Answer to an Urgent Question was given in the House of Commons on Wednesday 20 March.
“I thank the honourable Member for Ealing North, James Murray, and others, for raising the important issue of HMRC’s customer services and its plans to provide better services for taxpayers.
As Members probably know, His Majesty’s Revenue and Customs has announced that it is halting planned changes to its helplines, but aims to encourage more taxpayers to self-serve online. It has listened to the feedback and recognises that more needs to be done to ensure that all taxpayer needs are met, while encouraging those who can to make the transition to online services. Making the best use of online services allows HMRC to help more taxpayers, and to get the most out of every pound of taxpayers’ money by boosting productivity. HMRC helpline and web-chat advisers will always be there for taxpayers who need support because they are vulnerable or digitally excluded, or have complex affairs. I recognise that such reassurances were not communicated clearly enough yesterday.
Of course, the pace of this change needs to match the public’s appetite for managing their tax affairs online. The changes in the self-assessment VAT and PAYE helplines announced by HMRC will therefore be halted while it engages with stakeholders, which means that the phone lines will remain open as usual. HMRC will now work with stakeholders—including me—while continuing to encourage customers to self-serve and gain access to the information that they need more quickly and easily by going online or to the HMRC app, which is available 24/7”.
My Lords, on Tuesday 19 March, HMRC announced that it would close its self-assessment helpline for half the year. The very next day, following a U-turn by the Chancellor, HMRC announced that this closure would not go ahead. When was any Treasury Minister first informed by HMRC of its decision to close the helpline? Reports of the Chancellor’s U-turn referred to a “pause”—what criteria will be used to decide whether, and when, HMRC will proceed with its planned closure of the helpline?
My Lords, I do not have the details of who was told at what stage, but even though HMRC is a non-ministerial department and has a close relationship with the Ministers with oversight of HMRC, operational decisions are taken by HMRC’s management. The decision on the helpline followed two trials last year, the evaluations for which were published, showing that closing access to those helplines for certain people had no adverse effects at all. A commitment has been made that the helplines will remain open over the year ahead, but we are focused on listening to feedback and ensuring that as many people as possible can make the transition to online services, which have a far higher customer satisfaction rate than the phone lines.
My Lords, it is not just this particular shambles: HMRC’s own surveys, which you can read in its annual reports, show that customer service has pretty much collapsed within that departmental agency. Its leadership has failed to recognise that the huge shift to self-employment, contract work and gig work has pushed swathes of ordinary people into a tax minefield. I ask that the Government provide HMRC with more resources to deal with this issue, but will they also tackle the culture at HMRC, which, at the top, remains focused on compliance through aggressive enforcement rather than through proper customer service and support? Most people want to pay the right tax; they just do not know what it is or how to do it.
I do not fully recognise the picture that the noble Baroness paints. Over the course of this Parliament, the amount of funding provided to HMRC has increased from £4.3 billion in 2019-20 to £5.2 billion in 2024-25, and the overall customer satisfaction across phone, web chat and online is 79.2% versus a target of 80%. However, I recognise that there are certain elements within the HMRC offer where taxpayers need to get a better service. That includes answering correspondence for some of the more complex and hard-to-reach people: the vulnerable and the digitally excluded. That is exactly why, quite frankly, we need to move resources from taxpayers who can and should use online and ensure that those resources can be targeted at those areas where customer service is not as good as it should be. That is what we intend to do.
My Lords, does my noble friend accept that the large reduction in the number of people in this country who are self-employed is a direct consequence of the Government’s introduction of IR35 legislation, which has led to huge confusion among the self-employed? Many people are giving up—just ask any taxi driver in London. Does she really think that the Inland Revenue, or HMRC as it is now, can provide a proper service with so many of its people working from home?
Obviously, it is up to the individual to ensure that they pay the right tax at the right time. HMRC intends to make that as easy as possible, but for some more complex situations it is right that individuals get tax advice. People working for HMRC can work from home two days a week. They use the same systems as they do in the office, and they are held to the same standard that they would experience when they are in the office.
My Lords, the media reports yesterday said that people who are unable to get online will still get assistance from staff during office hours, although it is not immediately clear how that will work. Given that more than 12 million people are required to complete self-assessment forms every year, maybe the Minister could advise your Lordships’ House about the discussions that have taken place with HMRC to facilitate all the people requiring self-assessment, particularly those who do not have online access and who need, by law, to complete such forms.
I am incredibly happy to do that. Of the self-assessment tax returns that were submitted on time, 97% were done online, so just 3% were not. HMRC has an entire focus on the 120,000 people who are vulnerable or digitally excluded. It is those people whom HMRC wishes to target its resources on. Some 3 million calls were received last year, which took 500 full-time equivalents an entire year to answer. Those calls were people phoning up to ask how to change their password, how to get their tax code, or what their national insurance number was. That can be done online. Those who can access the online services really must do.
My Lords, I pay tribute to my noble friend Lord Cormack. What a privilege it was, along with others from your Lordships’ House and the other place, to be at his funeral yesterday in Lincoln Cathedral.
Is my noble friend the Minister satisfied and content with the advice given by the current board of HMRC? I declare my interest of having worked on a private sector board with a current member of the HMRC board.
The HMRC board as currently constituted is advisory. I know that my colleague the Financial Secretary to the Treasury is taking a keen interest in the strategy and its operationalisation within the HMRC. I expect that we will see some improvement shortly.
My Lords, I thank the Minister very much for helping to facilitate the meeting on A1 forms that parliamentarians had with the Financial Secretary to the Treasury, but a specific concern of users was very much the lack of a helpline, so what I am hearing at the moment is concerning.
The helplines that would have closed relate to VAT and PAYE and self-assessment. HMRC is putting in various digital solutions to ensure that people can access A1 forms as quickly as possible and, as with all other forms of tax, accessing online is quicker, can be more convenient and certainly offers the best value for money for the taxpayer.
My Lords, is it not the case that the people who carried out this assessment are the same people who have been failing the public for many years? Who carried that assessment out? Does the Minister understand that many people who try to contact the tax office do so after they have failed to get through or get any answers from the online service?