Accountants and their representative bodies have labelled the performance of HMRC’s VAT helpline ‘very worrying’ after the Revenue failed to answer more than 58% of calls in May.
Figures recently released by the tax authority show that in May 2019, HMRC answered only 9% of calls to the VAT helpline within 10 minutes and failed to answer more than 58% of all calls.
The statistics show a sharp downward trend from the beginning of the year. In January 2019, 64% of all calls were answered within 10 minutes, with 72% of calls answered, but as demand increased in the run-up to Making Tax Digital going live, the percentage of helpline calls fielded dramatically fell.
Responding to a query from Treasury Select Committee chair Nicky Morgan, HMRC chief John Thompson said that he was “aware that some callers have experienced extended waiting times on our VAT helpline”. Thompson acknowledged that this “falls short of the standards of service we want our customers to experience” and said that the Revenue has been working hard to bring the waiting times down and improve performance.
An HMRC spokesperson told AccountingWEB that it had doubled the number of people taking VAT helpline calls from 100 in March to more than 200 now, and since doing so has met their five-minute target for answering calls for many weeks.
MTD and Brexit perfect storm
In a tax faculty update, the ICAEW labelled the performance of HMRC’s helpline as “very worrying”.
“It would appear that HMRC had not allocated any additional resource to the VAT helpline to deal with MTD queries as it answered fewer calls in May 2019 than it did in each of January, February and March 2019,” stated the ICAEW’s update.
The Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) put the collapse in service levels down to the lack of an adequate pilot for the roll-out of Making Tax Digital (MTD) for VAT and the pressures of Brexit on HMRC resources.
Tina Riches, chair of the joint CIOT and ATT Digitalisation and Agent Strategy Working Group, commented that it was “no surprise” there has been a peak in demand for help from HMRC as we moved towards quarterly digital reporting for VAT.
“While this is natural for any deadline,” continued Riches, “it has been exacerbated both by the inadequate period allowed for proper testing of the MTD for VAT systems and software, and the pressures of preparation for Brexit meaning HMRC diverted resources away from other areas including MTD.”
In his letter to the Treasury Select Committee, John Thompson acknowledged that Brexit had contributed to the department’s helpline woes. “Recruitment for a no deal EU exit was slower than expected, and so we had to divert resource from business as usual in February and March,” said Thompson. “This meant that some of the people earmarked for training on MTD were diverted onto the government’s operational priority of no deal.”
The CIOT flagged accountants’ experience as “particularly problematic”, with many agents writing off days’ worth of time trying to help their clients become compliant.
“There are many glitches in the current process,” said Tina Riches. “Clearer guidance on the various sign-up journeys, how to prevent things going wrong, and the steps to take if they do, is vital to a smooth roll-out. In the absence of these, HMRC’s phone lines will continue to be swamped.
“Even though we are not yet through the implementation of MTD for VAT, important lessons can already be learned,” continued Riches. “Not only is it clear that a much longer period of thorough public testing is needed to roll out new systems, but the increased support that businesses and their agents need to make the transition must be planned and provided.
Responding to the CIOT’s claims, a source at HMRC told AccountingWEB that they “simply don’t recognise the picture being painted”.
Where there have been issues, continued the source, they have affected only small numbers of taxpayers.
“It’s disappointing that the CIOT has chosen to vent in this way about concerns that have been addressed with them directly. We’ll always value their input but scaremongering like this doesn’t help anybody.
“Over 550,000 businesses have successfully joined the service and many agents have set up their agent account and signed up their clients.”