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Businesswoman staring at telephone waiting | AccountingWEB | HMRC paid out over £700k in compensation for delays
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HMRC paid out over £700k in compensation for delays

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HMRC has had to pay out over £700,000 to taxpayers complaining about delays, according to new stats uncovered by UHY Hacker Young, which also found the number of complaints jumping by 65%. 

 

21st Jun 2024
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HMRC’s customer service has been the subject of increased complaints across AccountingWEB by frustrated agents, but now accountancy group UHY Hacker Young has uncovered new data that show the increasing level of consternation. 

According to the accountancy group, the number of ‘customers’ complaining about HMRC delays surged from 21,000 in the previous year to 35,000, while the tax department had to fork out £718,000 in compensation to disgruntled taxpayers complaining about delays in 2022/23.

The number of people compensated for delays almost doubled to over 4,700. 

The complaints about HMRC delays come after a year where taxpayers and agents have faced further delays as a result of restrictions to helplines. Earlier this year, HMRC restricted the agent dedicated line from 11 December to 31 January during the busy self assessment (SA) period, where only queries relating to SA filing, payments or repayments were being answered. 

How has it got so bad?

In March, HMRC was forced to abandon plans to close the SA helpline between April and September every year following a trial of the move in 2023. 

HMRC’s chief Jim Harra blamed “diminishing” resources when pressed by the Treasury Committee over his original plans to make permanent changes to the helplines. Soon after, HMRC received £51m to improve the failing helplines following the tax department’s remarkable U-turn over the helpline cuts. But many stakeholders have raised concerns that while the extra money is a good start, the problems with HMRC resources require more than £51m to plug the gap. 

The data from UHY Hacker Young has revealed that the increase in complaints has led to HMRC having to pay compensation to thousands of customers, including covering the costs incurred from waiting on the phone. In one common example raised by the accountancy group, HMRC has had to pay out to taxpayers who have paid excess tax as a result of missing deadlines due to delayed responses. 

Compensation

The impact of the delays is seen in the compensation paid out to complaining taxpayers. The £718,000 compensation in 2022/23 is up on the previous year’s £371,000 – a 94% increase. 

The number of customers complaining who received compensation also increased by 90% from 2,490 to 4,742.  

UHY Hacker Young noted that getting meaningful compensation from HMRC is a “very admin-intensive process”, with taxpayers having to show invoices and proof of payment as well as proving that those costs were directly caused by delays. As a result, many give up trying to secure compensation.  

Graham Boar, Partner at UHY Hacker Young, says: “HMRC’s customer service crisis is the worst it’s ever been. The poor quality of service is incredibly damaging for individuals and small businesses.”

“It takes a very long time to get through to anyone – and if you’re lucky enough to reach someone they’re rarely the relevant expert. HMRC is severely under-resourced and needs more funding to deliver the service customers deserve. Complaints are mounting.”

“The new government needs to properly invest in HMRC and its customer service functions and not just in its tax investigation side.”

Replies (9)

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Stepurhan
By stepurhan
21st Jun 2024 14:52

How exactly did UHY Hacker Young "uncover" these stats?

Presumably they are in the public domain and they have simply noticed them and decided to use them , successfully as proved by this article, to get some free PR. The alternatives for how they could have got data that wasn't freely available would be most unbecoming of a professional firm.

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Replying to stepurhan:
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By kelvindavies
21st Jun 2024 15:09

heard of freedom of information mate?

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Replying to kelvindavies:
Stepurhan
By stepurhan
21st Jun 2024 16:14

kelvindavies wrote:

heard of freedom of information mate?


Your point being?

Information that can be obtained through a freedom of information request by anyone is publicly available.

But even if you are asserting that making a very simple freedom of information request counts as "uncovering", I found lots of information on compensation payments by various government departments from a basic web search. I'm not convinced that the above "revelations" even required a formal request.

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Replying to stepurhan:
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By KD1182
22nd Jun 2024 08:12

Oh no, so sorry you couldn’t be convinced that it was truly “uncovered”.

What an utterly petty item to complain about.

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Replying to KD1182:
Stepurhan
By stepurhan
24th Jun 2024 14:13

I'm pointing out that a large company is getting free PR by making, at most, a freedom of information request. One that they know they could spin into a "story" no matter which way the figures went. (If the compensation payments had gone down, it could have been presented as HMRC not paying out for a service we all know is terrible for example).

Do you have an argument to say that isn't what is happening here? Because I cannot help thinking your response isn't a shining example of not being petty otherwise.

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By Paul Crowley
21st Jun 2024 15:01

Did the arithmetic. Not worth making a claim for such tiny stuff.
We already know that HMRC is falling apart, not really news, but useful to know it is not worth making a claim.

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Replying to Paul Crowley:
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By FactChecker
21st Jun 2024 19:05

Stat 1:
"the number of ‘customers’ complaining about HMRC delays (was) 35,000" and "the number of people compensated for delays (was) 4,742."
SO ... not much better than 1 in 8 chance of complaint generating ANY compensation.

Stat 2:
"the tax department (paid) £718,000 in compensation to taxpayers complaining about delays in 2022/23."
SO ... approx £150 per successful complaint (or avg £20 per all complainants).

I get better odds (and returns) from my Premium Bonds - without lifting a finger!

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By Tom+Cross
23rd Jun 2024 11:50

How can this be? The guy in charge (Sir Harra) has been ‘awarded’ one of the highest honours whilst, on his watch, HMRC has consistently failed in its expectations!
Which magician will be able to dig HMRC from the trough, which has only become deeper, under the present incumbent.
The new Government will be forced to address the current problems, across the whole of the civil service.

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By David Lakin
24th Jun 2024 10:46

Perhaps JH would like to make this up in return for his well-earned honour!

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