HMRC is, in many ways, the face of the tax system. It’s the main tax body that businesses, agents and individuals interact with. It collected nearly £900bn in 2024/25 – a record yield. 

However, historical service issues have not been dealt with, and many agents describe the experience of dealing with HMRC as frustrating. 

“It's hard to get through to the right person at HMRC,” says Ed Saltmarsh, Tax Technical Manager at ICAEW. “Things are taking too long to be processed – months, even in some cases years – to be resolved.” 

HMRC has confirmed that 72% of the calls it receives are caused by “failure demand”. This means contact is being made because of broken processes at HMRC or unclear guidance. “It is contact that could and should be avoided,” says Saltmarsh. “That's not a customer service problem, that's an upstream design problem.”

HMRC is attempting to fix processes through digitalisation, but it’s a big organisation, Saltmarsh says. “There are many, many ways to deal with HMRC; many forms for various registrations for taxes, for tax relief claims. So digitalising does take time.”

The authority has issued a transformation roadmap, setting out a plan for change over several years to create a more digital and more efficient tax administration. Changes will be iterative, reflecting the organisation’s size. The project requires new hires, training programmes, and the creation of new digital processes, which will all take time to implement. 

“HMRC’s transformation roadmap is definitely a step in the right direction. It has the right end goals, and it's ambitious, but we think it's missing a few crucial commitments,” says Saltmarsh.

ICAEW recommends the introduction of:

1. A commitment to a ‘prove then remove’ approach: when HMRC introduces new digital services, for example, it shouldn't remove traditional customer service like phone lines and web chat until the digital service is functioning effectively for taxpayers and agents. 
2. Access parity for agents: Tax agents should be able to see and do everything that the taxpayer can. “Many taxpayers rely on agents to deal with all tax related issues, but at the moment that's not always possible,” says Saltmarsh. “Some HMRC digital services are available to taxpayers, but not their agents. That needs to change.”
3. Root cause analysis: HMRC should be tracking what causes people to get in touch. It can then focus on the problems most often cited and fixing it, removing the need for people to reach out in the first place.

Administration is just one part of the puzzle

HMRC does not operate in isolation. Its effectiveness depends on the other pillars, and theirs depends on it – weakness flows in both directions. When tax policy is poorly made, the resulting complexity makes HMRC harder to deal. But when HMRC itself struggles, the strain passes outwards: the tax profession cannot handle their own or their client’s tax affairs properly, and more disputes end up before the tribunals.

“Without good policymakers, it's harder for HMRC to administer the tax system,” says Saltmarsh. “Without a good tax administration, it's harder for the tax professional to advise their clients, and without good policy the judiciary has to get involved more often.”

Complexity makes the system harder to fix, too. HMRC’s transformation depends on digitalising tax, but a complicated system is far harder to digitalise - the complexity straining its service slows the very modernisation means to relieve it.

ICAEW is calling on all members and those working in tax to share their thoughts on the current state of the UK tax system and what actions can be taken to improve it.