Save content
Have you found this content useful? Use the button above to save it to your profile.
A person holding a ladder to climb across a gap

Gaps persist in HMRC’s digital service journey


As the UK tax authority continues with a “digital by default” approach, its attempts to move online have been beset by a number of fundamental issues. ICAEW’s Tax Faculty has issued a call to find out where agents feel HMRC should prioritise resources when developing its digital offerings.

23rd Aug 2023
Save content
Have you found this content useful? Use the button above to save it to your profile.

Whether it’s flat-batting MPs’ questions about Making Tax Digital failings or justifying the latest helpline closure, a standard HMRC response has been that the UK tax authority is moving to a “digital by default” approach – a wholesale move away from phone and post to online services.

However, like many of the other three-word slogans beloved in Whitehall, digital by default has a number of fundamental issues. 

HMRC’s digital services currently do not extend to all its functions, don’t always work for the agent and taxpayer users, and the complexity of tax rules and existing legacy systems means that fixing these problems is by no means straightforward.

The Institute of Chartered Accountants in England and Wales’ (ICAEW) Tax Faculty has recently issued a call to find out where its members think HMRC should prioritise resources when developing its digital services in order to address the issues above, and also ease some of the Revenue’s well-document performance problems.

The institute also underscored the need to address several key areas including:

  • agent access to services and client information
  • a single sign-on portal
  • communication with HMRC via secure email.

Agent access to services and information

A major issue repeatedly highlighted by agents is the fact that despite being authorised by their clients, they do not have access to all information and digital services in the client’s personal tax account (PTA) and are often left in the dark on key pieces of data. 

Research released earlier this year exploring agents’ experiences of HMRC’s current digital services stated they “may not sufficiently meet agents’ needs to access client data”. The survey flagged that in order to do their jobs effectively, more than half of the agents who responded were logging in to their client accounts or asking clients to share screenshots of information in their accounts.

ICAEW has compiled a list of digital services it believes are currently not available to agents:

  • view and check employment pay and tax details (some access is provided by the self assessment pre-population service and income record viewer (IRV), but these services have significant flaws)
  • check and update tax codes (limited view-only access is provided by the Income Record Viewer (IRV) and for clients in self assessment)
  • claim a tax refund (forms R40, P85, P87, various versions of R50, R53, R55)
  • check NIC history and state pension forecasts
  • track forms submitted online
  • submit, check or update marriage allowance claims
  • tell HMRC about a change of address
  • check or update taxable benefits provided by employers. 

Other digital services available to taxpayers but not agents are: 

  • appeal self assessment penalties
  • make a complaint
  • PA 302 simple assessments and P800 PAYE tax calculations
  • registering for certain taxes including registering a partnership and partners for self assessment, plastic packaging tax, employment-related securities schemes
  • real-time reporting of capital gains (other than the capital gains tax on UK residential property service)
  • reclaim tax paid by close companies on loans to participators
  • apply to payroll benefits and expenses (it was announced at Spring Budget 2023 that agents will be able to access this service in the future). 

HMRC is on record stating it wants to allow agents to see and do everything their clients can, but there are limitations to this aim. These range from resourcing issues and wrangling data from legacy systems (or getting old systems to talk to new ones) to security and regulatory issues such as the fact that only bank signatories can set up or amend direct debit mandates, which is why the new digital time-to-pay services for self assessment, VAT and employer PAYE are not available to agents.

A single sign-on portal

One aspect of HMRC’s digital services that draws particular ire from the agent community is the continued requirement for two separate agent online accounts with different login details: the newer agent services account (ASA) (through which agents manage VAT details, report clients’ capital gains tax on UK property, register a client’s estate or register a trust as an agent) and the older online services for agents account (OSAA), which covers services including self assessment, corporation tax, PAYE and the construction industry scheme.

Agents quoted in HMRC’s digital services survey earlier this year stated they “don’t really understand why they’re separate accounts” and told researchers “we didn’t know which account to sign into and the name of the services is too similar.”

While HMRC’s ultimate aim is a single agent portal, it has given no delivery timetable for this to happen. ICAEW indicated that new or updated services will be provided through the newer ASA, but due to the complexity of HMRC’s legacy systems, a full switch may take many years. 

ICAEW also highlighted the “significant scope” for digitalising and rationalising the agent registration processes. The current registration processes – at least for self assessment and corporation tax – are manual. The work is done by HMRC’s agent maintainer team and can only be contacted by writing.

No digital services available

In some cases, digital services are not available to taxpayers or agents – the most notable example being inheritance tax, although due to its relatively low volume of transactions this may be a lower priority than other taxes.

Another area where a lack of digital services is causing significant issues for taxpayers is making voluntary class 3 national insurance contribution (NIC) payments. While NIC history and contribution gaps are available in taxpayers’ PTA, payment references can only be obtained by phone. 

ICAEW states that HMRC and the Department for Work and Pensions expect to develop a fully digital service – perhaps even by the end of 2023.   

Other gaps in digital services include: 

  • access to construction industry data at sub-contractor level
  • submit a CT61
  • request that a self assessment tax return be withdrawn.

Email communication

HMRC’s research also included the option to suggest improvements for HMRC’s digital offerings. The most popular among respondents was the ability to communicate with HMRC via a secure email link, with 81% of respondents stating this would have “a significant positive impact”.

However, ICAEW indicated that due to security concerns, a secure portal for exchanging documents with HMRC may be a more likely solution. Regardless, according to the institute, any plans HMRC might have for this are at a very early stage.

A messaging facility may feature in the single customer account and/or ASA in due course.  

Responding to the call for input from accountants, an HMRC spokesperson told AccountingWEB: "We encourage people to use our digital services wherever possible. When customers use online services, on average more than 83% are satisfied with their experience, finding them straightforward and preferring to access their information at a time and place that suits them."

Do you think ICAEW has flagged the right gaps and problems in HMRC’s digital shift? If not, what’s missing? You can let us know in the comments below, or share your thoughts with ICAEW Tax Faculty’s Caroline Miskin.

23 August 2023: This article was amended to add a quote from an HMRC spokesperson

Replies (19)

Please login or register to join the discussion.

By sherodwilliams
23rd Aug 2023 14:38

My current beef is with the Trusts & Estates Dept. I registered a Trust in October 2022 using the online system and I received an acknowledgement. I received by post a letter stating that the Trust had been allocated a Trust Reference number ( Note not a UTR ). I had made HMRC aware that the Trust was receiving income & that a Return would be required. Having received no further coommunication from HMRC and concerned about the possibility of them seeking penalties further down the line, I completed a paper return which I submitted in April 2023 using the Reference number which they had allocated. Nothing back until 21 August when a letter arrived by post stating that as there was income into the Trust it needed a UTR. The UTR is only available by someone as Trustee undertaking a digital handshake through their own gateway - that did not work ! So instead of telling me the UTR in the letter I am now totally in limbo. HMRC tech people do not know how to resolve the problem save to say " Well it should work "!

Thanks (5)
By ireallyshouldknowthisbut
23rd Aug 2023 15:16

The biggest issue it seems is that "digital" just replaces the initial contact.

The processing still seems to be manual behind the scenes.

Take a basic thing such as registering a new SA account. Why is that not either (a) set up on the spot as a fully automated system, Or (b) passed for manual checks? it seems you just enter the data on a form, this form is then somehow sorted and processed and comes out the other end of a long system. its not "digital" in any way I understand digital to mean, ie fully automated and instant as it ought to be.

The class one is Class 2 NI of course which doesn't work property from the tax return, but is another separate mainly manual process, rather than a simple "tick box I want to pay class 2" as you would except it to be.

And as for the adjustments to VAT returns, I mean what a complete joke. That should just be automatic, but its just a digital interface at the front end with no doubt rows and rows of bored clerks at the other reading it all and clicking buttons.

I am not sure HMRC understands what "digital" really means. That is to say an automated system end to end, not simply the conveyance of some data much of which is often redundant.

Thanks (11)
Replying to ireallyshouldknowthisbut:
By Hugo Fair
23rd Aug 2023 21:37

"I am not sure HMRC understands what "digital" really means" ... oh they most certainly do - even though it's not what they want you to think they mean.

What they mean is simply removing direct access to a human ... because they have insufficient resources (and most of those are inadequately trained/knowledgeable).

It's actually the antithesis of what they claim ... 'managing' their resources - without even a nod at either the 'customer' experience or efficiency of operations.

It's a bunker mentality - where 'success' is measured by the number of attempts (to make contact) that are repelled.

Can you imagine any other govt dept that would say "on average more than 83% are satisfied with their experience" and keep a straight face ... try "on average more than 83% of pedestrians are satisfied that they managed to cross the road without being killed"?

Thanks (13)
By GHarr497688
23rd Aug 2023 19:47

I don't think they will ever get it working as it should. The only letter's I receive these day are from HMRC - all business have managed to make digital work. I've given up to be honest.

Thanks (5)
By johnthegood
24th Aug 2023 05:15

Every single thing mentioned in the article we have been asking for now for a number of years, clearly there is absolutley no motivation for HMRC to provide these things

Thanks (9)
By SXGuy
24th Aug 2023 09:37

I've just accepted that to do my job with various taxes I have to stumble around from one system to the other hoping it works, whilst remembering which method gets results and which goes no where.

Thanks (6)
By Mr J Andrews
24th Aug 2023 09:53

Just another loaded survey. The ''call'' should be where HMRC must prioritise its resources - and services. Period. Forget mass digitalisation which they are clearly incapable of and incompetent with.

Thanks (5)
By norstar
24th Aug 2023 10:10

Don't be naive. HMRC want to sideline agents and deal only with taxpayers directly. We're seen as the enemy and in my view, it's no coincidence that after how many years, we still can't do the basics on our dashboard etc.

Thanks (12)
By kevinringer
24th Aug 2023 10:31

HMRC’s of-quoted 83% satisfaction rating is in The 83% was for large businesses in 2021. It reduced to 81% for large businesses in 2022 and was only 52% for mid-sized businesses and 45% for agents. Most of the ratings are less than 60% and many are less than 50%. The survey of 732 agents and 184 taxpayers revealed HMRC’s actual performance was dismal with most performance areas scoring less than 50% and some considerably lower at 23%.

Thanks (10)
Replying to kevinringer:
By Hugo Fair
24th Aug 2023 11:20

Thanks, Kevin.

We tend, all too easily, to fall for selective statistics ... despite our gut telling us it's 'wrong' (as in 'deliberately misleading'), we've become desensitised (and too lazy or overworked) to bother checking the source data. And yet we continually refer back to source legislation!

All power to your elbow ... and keep them as honest as they're prepared to be!

Thanks (4)
By moneymanager
24th Aug 2023 11:48

I have in my hand a CD a Subject Access Request from the Debt market Integrator Operations Team, it relates to a conversation following earlier "Demands with Menaces" in respect of a small VAT payment that had been made TWO YEARS before and which had been acknowledged in earlier phone calls, following yet more blackmail letters, I am still awaiting a reply to my Royal Mail Tracked rebuttal of some months ago, in short, they haven't got a chance of making digital work.

Thanks (1)
Jennifer Adams
By Jennifer Adams
24th Aug 2023 14:49

This seems like a very long list for HMRC to sort out.. will it ever be done?

Thanks (0)
Replying to Jennifer Adams:
By kevinringer
24th Aug 2023 14:52

What are you worrying about? According to HMRC, MTD ITSA will fix everything because that's what HMRC have been telling us for the last 8 years, and as we all know, HMRC are always right.

Thanks (0)
By Catherine Newman
24th Aug 2023 17:04

I find it frustrating that it has been like this for years and the PBs are only now taking it up as an issue.

There appears to have been an incorrect posting on the Agent Forum re payment on CGT 60 day reports. I thought it yesterday evening and Helen Thornley has taken it up with them today. What a shambles!

Thanks (0)
By mydoghasfleas
25th Aug 2023 11:27

Why is it called a journey? We are going nowhere with it. Previously it was a roadmap, not long after everything went Garmin.

Thanks (0)
Replying to mydoghasfleas:
By Hugo Fair
25th Aug 2023 12:52

"Why is it called a journey?"

'cos HMRC's top brass have now regressed to the point where they can sit in the back, like a bunch of spoilt 5 year-olds, chanting "I'm bored ... are we there yet?"!

Thanks (2)
Replying to mydoghasfleas:
By kevinringer
25th Aug 2023 13:08

It's a journey because taxpayers and agents aren't going to get to a destination eg when will HMRC answer my letter? It's a on-the-road version of groundhog day.

Thanks (0)
Replying to mydoghasfleas:
By SXGuy
25th Aug 2023 21:27

Perhaps it's in reference to the band the Journey. Don't stop believing. Hold on till the bitter end.

Thanks (0)
By Jane Wanless
27th Aug 2023 17:05

I've been trying to get my mother's PAYE code correct for months. I've tried phoning and the PTA. I've given the correct figure using the PTA, but HMRC seem to know better. They've written saying they've worked out the total - but only included the new rate, and ignored a week at the old rate. The PAYE code issued after the letter includes a lower total. The PTA currently shows an amount between the 51-week amount and the coded amount.
Nowhere shows the Marriage Allowance transfer, requested in May and given an estimated date for the new code of the end of June, followed by a statement that as the estimated date had passed, it would definitely be done by July 15th.
Why can't I simply add the correct total to the PTA? Digitally? At the current rate of progress, I doubt the code will be correct before the end of the tax year.

Thanks (0)