ICAEW.com works better with JavaScript enabled.

Tax revenues up, but HMRC misses customer service targets

10 November: In its Annual Reports for 2019/20, HMRC has confirmed that resource issues in the first half of the year and the impact of coronavirus starting in March meant it struggled to meet service targets, but tax revenues increased.

In its latest Annual Reports, covering 1 April 2019 to 31 March 2020, HMRC has published tax revenue figures and customer service performance, alongside detailing progress against targets set in the 2015 Spending Review.

Total tax revenues were up 1.4% year on year to £636.7bn, from £627.9bn in 2018/19. The figures also confirm HMRC met its 2015 target of raising an additional £5bn a year in revenues by tackling non-compliance by 2019/20. During 2019/20, HMRC prosecuted 4,123 people and generated an additional £36.9bn of revenue by tackling evasion, avoidance and non-compliance, an increase of £2.8bn on the previous 12 months.

HMRC fell just short of another of its Spending Review targets, that of generating £717m of sustainable resource savings a year by 2019/20 through digitalising tax collection and streamlining its workforce. In 2019/20 it achieved savings of £696m, however, HMRC projects £200m of annual savings by 2020 to 2021 after completing its £10bn IT contract with Aspire.

The Annual Report also suggest that HMRC has some ground to make up on its target of delivering an additional £480m of tax revenue by 2020/21 through its efforts to digitalise the tax system. The report states that in 2019/20, its Making Tax Digital programme had generated £223.5m in additional tax revenues.

Customer performance indicators and survey results

HMRC also published final performance indicators for 2019/20 alongside the results of customer feedback, including its Individuals, Small Business and Agents Customer Survey 2019.

In its Annual Report HMRC acknowledged that: “In the first half of this financial year, we didn’t deliver the customer service we would have liked, due to resourcing challenges carried forward from financial year 2018 to 2019, plus higher than expected customer demand.”

A million more taxpayers accessed their online digital services account for individuals in 2019/20, taking the figure to 12.7m, and survey results suggest there have been improvements in digital services.

The proportion of taxpayers saying they were satisfied with their online experience increased to 81.6%, up from 80.4% in 2018/19. HMRC also reports a significant improvement in the proportion of website users who found the services easy to use: 71.8% in March 2020, compared with 57.7% in April 2019.

However, the proportion of iForms processed within seven days fell from 94.1% in 2018/19, to just 87.6% in 2019/20. Meanwhile just 70.3% of post was cleared within 15 days, compared with 76.6% in the previous 12 months.

Performance data for telephone communications also confirmed that HMRC performed worse than it had in the previous 12 months. For example, 29.9% of customers waited more than 10 minutes to speak to an adviser in 2019/20, up from 19.7% in 2018/19 and against a target of 15%.

The average time in which calls were answered increased by more than 25%, with callers waiting an average of six minutes 39 seconds in 2019/20, compared with five minutes and 14 seconds the year before and a target of five minutes.

The customer survey results are largely in line with the preceding year, but with falls in the proportion of individuals who felt that HMRC was approachable (58% down 6% year-on-year) and that it was easy to deal with tax issues (55% down 6%).

Meanwhile the most significant changes in the results for agents were an increase in the proportion that believed HMRC ensured all customers pay/receive the correct amounts (48% up 5%) and applied penalties and sanctions equally (40% up 4%).

Performance against HMRC’s Charter

HMRC has also published its Your Charter Annual Review for 2019/20, in which it acknowledges that while a good service was provided in many areas, improvements in customer experience are needed.

In particular, the report highlights that customer service performance is impacted in areas where HMRC’s systems are not joined up, by complexities in policy or tax administration and in some circumstances by HMRC’s communication.

The report also acknowledges that the way in which HMRC interacts with representatives of taxpayers is the area where there is a “large gap” between its Charter commitments and its performance.

Alongside feedback from stakeholders and the Adjudicator, the report outlines HMRC’s priorities to improve customer experience, which include embedding its new Charter into everyday working and modernising and joining up its processes.