Accounts show drop in HMRC service levels

HMRC annual report and accounts
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HMRC put a brave face on things at a conference for stakeholders last week, but behind the scenes the annual report and accounts for 2014-15 documented yet another qualification for tax credit fraud and errors and a decline in customer service levels.

The qualification is an annual ritual for the tax department’s accounts - the sequence is up to 15 now - but the department claimed that at 4.4% it had managed to reduce error and fraud in the tax credit system to the lowest level ever.

As the National Audit Office report on the accounts explains, HMRC’s strategy over the past five years has been to reduce costs, while increasing its compliance work to secure additional revenues.” Since the 2010 Spending Review £917m has been earmarked for efficiency savings in compliance work to generate additional revenues of £7bn a year.

Amyas Morse, head of the NAO, commented: “Over the last parliament, HMRC met its strategic objectives to increase tax revenue while cutting its administrative costs. However, it made less progress in improving customer service, the standards of which still fall well short of that expected by taxpayers.”

Overall, HMRC brought in £517.7bn in in tax during 2014-15, an increase 2.4% on the previous year, which the deparment ascribed to economic growth and a continuing crackdown on tax evasion and avoidance.

HMRC says it “protected” a £26.6bn in additional compliance yield, which was £8bn up on 2013-14.

According to the NAO, compliance yield is HMRC’s measure of the additional revenue generated through its compliance activities. While the figure reached a new high in 2014-15, the NAO commented: “Caution is needed as new areas were included in its measure this year.”

Included in this year’s compliance yield estimate is £768m anticipated from the use of accelerated payments legislation and other compliance projects that were excluded from 2013-14 figures. Without these additions, HMRC’s reported compliance yield in the absence of these changes would have been £25.2bn.

“A significant element of the yield calculation relies on estimates of current and future benefits and is not the amount of cash generated each year from HMRC’s enforcement and compliance activities,” the auditor said.

“The NAO recommends that HMRC be clearer in its published statements that the yield figure is not a cash figure and the inclusion of ranges around the estimated elements of yield would help to achieve this.

HMRC also achieved £210m in cost efficiencies last year from property closures, job cuts and reduced IT and procurement costs. “This brings total sustainable cost savings over the past four years to £991m – exceeding the target by £25m,” HMRC said.

At the stakeholder event in London, HMRC chief Executive Lin Homer said the year’s performance “provides very firm foundations for the challenges of transforming HMRC into a smaller, more highly-skilled, digital and efficient organisation and for meeting the Chancellor’s new target of securing £5bn a year of additional compliance yield by 2019-20”.

The success of HMRC’s economies, however, have been endlessly contested by trade unions and accountants who have argued that investing in staff and service would increase rather than decrease the amounts raised.

The accounts included data showing that HMRC handled 72.5% of the 65m customer calls it received last year, a significant drop in performance from 79% in 2013-15, while 70% the 15m postal items received were processed within 15 working days - down from 83% in 2013-14.

“Our customer service levels slipped this year, but the work we are already doing on digitising our services, using real-time information, and creating online tax accounts for individuals and businesses will help us improve customer service as well as improve voluntary compliance,” Homer said.

The argument about HMRC resourcing had some impact, which was seen in plans announced by the Chancellor on 8 July to invest £750m+ to recoup another £7.2bn in extra tax over the course of this parliament.

“Our plans to invest in our people’s skills, data and technology, and new powers announced by the Chancellor will further help us to meet the revenue and efficiency challenges in the Summer Budget,” Homer said.

About John Stokdyk

John Stokdyk, AccountingWEB head of insight

AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.

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21st Jul 2015 18:07

Worse to come?
The relentless round of job cuts and introduction of badly designed digital solutions is set to continue.

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22nd Jul 2015 11:20

APNs increase compliance yield

If APNs are amounts that, in HMRC's view, are going to be due, hence accelerated payment it is just a receipt, it is not additional yield.  No doubt when the appeals are determined, the accelerated payment already collected will be added to any tax balance on the determination and counted again.

The Lin Homer quotes sound like extracts from Twenty Twelve or W1A.  As HMRC descends further into management speak, it would be great if Amyas Morse, regularly featured in Private Eye, were replaced by Malcolm Tucker from The Thick of It.

In summary 3 in 10 calls are not answered and 1 in 4 letters take an age for a response.  No mention of the time between the date on HMRC correspondence and the date it is received.  Clearly these areas are not "using real-time information, and creating online tax accounts for individuals and businesses".

 

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22nd Jul 2015 11:35

It is noticably worse over the past 3 months

When you consider that the peak HMRC periods are July 31 and January 31 then why has the service offered fell so very low of late.Is it that all the usual CAAT , Enquiry staff are answering the ringing phones ?

I have given up with VAT, PAYE , CIS phone lines .The Agent Line is excellent, please numpties extend it to  CTAX, PAYE , VAT ,

My letters remain unanswered for now over 6 -8 weeks as a norm , the CAAT team has given up as I have NO client authorisations coming through for 7 -8 weeks now.

The standard of enquiry staff is now so low that I suspect all the knowledge has gone and we are left with 3 week trained staff!

Its no longer even remotely funny , I am losing clients , especially new ones as I cannot get client authorisation or a UTR.

I recently sent in 2 paper returns as  I waited 7 weeks for a 64-8 and a UTR . Guess what when I phoned HMRC yesterday they had no record of them but " they probably are waiting to be scanned".

I have been at this game for 50 years and I have NEVER seen it as bad as this.

Osbourne has not helped , does he dscuss his tax changes with anyone who can at least spell the word Office of Tax Simplification??

FED UP,  All smoke and mirrors from Lins hind quarters as usual.

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22nd Jul 2015 13:15

Agreed - it has got worse

taxbakbristol wrote:

When you consider that the peak HMRC periods are July 31 and January 31 then why has the service offered fell so very low of late.Is it that all the usual CAAT , Enquiry staff are answering the ringing phones ?

I have given up with VAT, PAYE , CIS phone lines .The Agent Line is excellent, please numpties extend it to  CTAX, PAYE , VAT ,

My letters remain unanswered for now over 6 -8 weeks as a norm , the CAAT team has given up as I have NO client authorisations coming through for 7 -8 weeks now.

The standard of enquiry staff is now so low that I suspect all the knowledge has gone and we are left with 3 week trained staff!

Its no longer even remotely funny , I am losing clients , especially new ones as I cannot get client authorisation or a UTR.

I recently sent in 2 paper returns as  I waited 7 weeks for a 64-8 and a UTR . Guess what when I phoned HMRC yesterday they had no record of them but " they probably are waiting to be scanned".

I have been at this game for 50 years and I have NEVER seen it as bad as this.

Osbourne has not helped , does he dscuss his tax changes with anyone who can at least spell the word Office of Tax Simplification??

FED UP,  All smoke and mirrors from Lins hind quarters as usual.

Agree completely - it has got a lot worse over recent months. Dread to think what January will be like.
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22nd Jul 2015 14:50

why paper utrs etc

Why are you sending in paper forms for 64/8?

UTR's issued much quicker if you apply on line - then apply for authority online.

You dont need 64/8 to file tax returns etc.

We only send in paper 64/8 when it is not possible to do one online.

 

But agree service is not what it was in the good old days.

 

 

 

 

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23rd Jul 2015 03:09

UTR s etc on line

I do apply on line but then , of late ,I get problems ie

1. My client NEVER receives the code numbers letter, this has happened 3 times and it happens with CIS authorities in particular.

I write to CAAT but I don't think I have ever received a reply - not a bad record!

Yesterday the Agents Help Line authorised ONE of my missing 64-8 clients for me...she said it was a trial service and not all Agents Help line operators have this facility but oh boy much better when they do.

It does mean of course that the CAAT had my 64-8 but did buffer all with it for 8 weeks!¬

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23rd Jul 2015 05:57

More than 4 months
I applied for a UTR online and after 4 months of waiting complained. If I'd not complained I'm sure is still be waiting

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By janefg
23rd Jul 2015 11:06

"why paper utrs etc"
You can't submit a Tax Return over the internet without a UTR

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22nd Jul 2015 11:53

Annual Report and Accounts

Having read the 252 page report, to include the comments made by the Comptroller and Auditor General, I came away with  the  conclusion that it was rather like your school end of term report which at the end would probably say "tries hard but lacks focus an with more effort could do better" This may sound unfair given that the total tax take has risen from £469.7B in 10/11 to £517.7B in 14/15 but where HMRC have consistently fallen down is in providing an acceptable level of service to their "customers". Lets face it the level of service, given the size of the business, would get most Chief Execs reaching for their CV`s knowing that their P45 was in the post. Out tax system works  bye an large  through the cooperation of the great tax paying public who accept that  if we wish to continue to live in what I consider  to be one of the best countries in the world then there is a cost and most people who despite hating the concept of tax accept that it is a cost worth paying and  I am on of these people. Imagine my dismay on learning that along with most other Government Departments HMRC will now be required to redo their current and future departmental budgets with a view to producing savings of between 25% and 40%. How Mrs Homer and her fellow Commissioners reacted to this bombshell I can only imagine. How will  HMRC staff unions react, who knows, but I would guess that  it will be with dismay.

The Foreword  to the report, written by Lin Homer, and at  only two pages  is worth a read. Lin is pictured smiling and her Foreward is generally upbeat but acknowledges  that the new Government expects all departments to make further efficiency savings. Given the Chancellors pronouncements of yesterday I wonder if Lin would be still of the same humour?

Life in our profession just keeps getting better and better!!

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22nd Jul 2015 15:19

I rang the vat helpline...

Information is available on our website...we are very busy...please call back later...and I was hung up on by the recorded message....sigh.....

 

 

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24th Jul 2015 13:09

Phone lines

Tom 7000 wrote:

Information is available on our website...we are very busy...please call back later...and I was hung up on by the recorded message....sigh.....

Also happens a lot with employer's (un)helpline and NICO - in fact everything that doesn't have a ADL (ie SA+TCs).
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By Shorty
22nd Jul 2015 16:57

Postal reply in 15 days?

"while 70% the 15m postal items received were processed within 15 working days - down from 83% in 2013-14"

What post do they actually reply to, to get that figure then eh?  Not mine, that's or sure!

Whenever I ring in I have to ask them what backlog they are working on.  Last one was for post received on 23rd March were being dealt with a reply by the 9th July.

Obvioulsy in the time taken to reply my client gets 2 or 3 computer generated threat letters!

Ho Hum.

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22nd Jul 2015 17:21

Effectively stole my clients money!

I won't bore with the whole saga...........

Client owed CIS on subbies as he hadn't paid it over

Submitted 13/14 rtn in Jan and wrote to Newry to explain that the balance would be covered by the CIS our client was owed when his 14/15 rtn goes.

Rang HMRC in Feb and arranged for the credit on his SA rtn re 13/14 to be tfr'd to the CIS a/c

Submitted 14/15 rtn 6/4

Waited 2 days than rang same tel no to arrange tfr of par credit to his CIS. Advised they can't do that!! Even though they had in Feb

12 or more phone calls over 3 months including 1 to lodge a complaint and 2 more chasing the complaint

Early June decided to request a refund of part of the credit leaving what was owed to cover the remaining CIS

Waited patiently as it can take 28 DAYS then on checking his SA a/c @ HMRC on Friday 17th saw the whole credit had gone.

Today as the money hadn't arrived in our account as requested and agreed with client now living in Thailand I rang HMRC, agent line then payments to learn:

  PAYE section had taken the whole £3800 even though only owed £2200!

  That it will now take upto 28 Days to send the balance back and a further 28 days after that for it to be sent to ourselves as requested a month ago. This was only happening now because I'd rung in

So basically HMRC had ignored the request for the refund and the PAYE section had stolen my clients money!

Customer service, you have to be kidding. Absolutely clueless, the officer on the Agent helpline today said had the money not been moved she could have dealt with it yet on previous calls they said they couldn't, TRAINING ISSUE.

No wonder their helplines are so busy, they are creating their own workload without our input

Feel like packing up and moving to Thailand

 

 

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22nd Jul 2015 18:46

Feel like packing up and moving to Thailand

Since the amalgamation of the Institute of FinancialAccountants (IFA) and the Institute of Public Accountants (IPA) of Australia , I also feel like moving to warmer climes, if only I were a bit younger.

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23rd Jul 2015 03:13

Youger?

I am here in Thailand and Australia a lot but I can do basically the same work with help from my daughter in our office.

I am 72!!!! One of the working Equitable Life Pensioners!

 

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23rd Jul 2015 10:17

HMRC unfit for purpose

It is a National disgrace that a Department of State can be run in such an abysmally inefficient and shambolic manner, with no heed whatsoever to "customer" complaints. Any commercial business which operated and behaved like current HMRC would lose all its custom and go bust within months. I particularly like the reference to W1A, as one can imagine the likes of Lin Homer et al sat in one of those newspeak meetings, when each outrageous proposal to reduce service is greeted with acclamations of "Cool" and "No worries". Having had 55 years of working in tax, formerly as an HM Inspector, then as a Chartered tax adviser and investigation specialist, it seems to me that HMRC have concluded that the one time "in depth" investigation programme has resulted in the whole cash business community going straight,as they do not appear to question accounts any more. What is worse,is that when on several occasions I have assisted individuals in making a voluntary disclosure, it takes,literally,months to get a response. In one case, where a full and quantified disclosure was made with a cheque payment, the belated reply referred to a totally different case,with a page from the other taxpayer's file enclosed!

Sadly for professional rapport and courtesies whatever staff is left in HMRC seem to be in cyberspace,and if there is any complaint about the inadequate service absolutely no one,Departmentally or Politically,gives a damn.

Come back Inland Revenue-all is forgiven!

 

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29th Jul 2015 09:03

NICO helpline

Phoned NICO helpline yesterday afternoon: was in queue for 35 minutes. Gave up because had an appointment. Tried again later. Phone answered by a human after 38 minutes. Appalling service from HMRC. Hopefully I will need to phone NICO less often as C2NICs switch to SA.

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30th Jul 2015 08:49

Wasted time!

When you add up the total time waiting for HMRC phones to be answered for me it is 2-3 hours every week.

Well , not every week as I despair and get so angry that I dare not phone !

If you calculate the hours /Cost of this wasted time say pa 40 weeks at 2 hours pw x 10,000 accountants , advisors , clerks etc a say £20ph  it is a staggering £1.6 million . We would do better  to pay for our own dedicated lines say 20 senior skilled staff

What about it ? Im game at £20 - 30 per week contribution

 

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30th Jul 2015 09:07

Own dedicated lines

taxbakbristol wrote:

When you add up the total time waiting for HMRC phones to be answered for me it is 2-3 hours every week.

Well , not every week as I despair and get so angry that I dare not phone !

If you calculate the hours /Cost of this wasted time say pa 40 weeks at 2 hours pw x 10,000 accountants , advisors , clerks etc a say £20ph  it is a staggering £1.6 million . We would do better  to pay for our own dedicated lines say 20 senior skilled staff

What about it ? Im game at £20 - 30 per week contribution

 

But independent advisors wouldn't have access to taxpayer records - that is the main reason I phone HMRC.

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31st Jul 2015 07:57

Independant no!

No ...I mean that we pay for dedicated HMRC employees !

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03rd Aug 2015 11:57

I see: an accountancy profession sponsored HMRC employee

taxbakbristol wrote:

No ...I mean that we pay for dedicated HMRC employees !

The problem with that is the Government will think this is a great idea to save costs so the ADL etc will go and we'll either have to join the queue with everyone else or pay the fee.
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