Key to the modernisation programme is the move to a purely digital service with the rollout of the Making Tax Digital (MTD) strategy, which is designed to provide fully automated tax reporting for individual taxpayers and businesses, the latter currently out for consultation in a series of six papers focusing on aspects of MTD. A further consultation on the system for larger SMEs and non-micros is still expected this autumn.

For those tax advisers and accountants who were unable to attend the HMRC Stakeholder Conferen, CCH Daily provides an overview of highlights from CEO Jon Thompson’s speech, including the latest progress on the ambitious Making Tax Digital programme, plans to improve customer service with extended opening hours for telephone services and call centres, and information about the new regional HMRC tax hubs.

Speaking at the conference, which had been delayed from the original July date due to the post-Brexit government reshuffle, Thompson said: ‘I’m pleased to be attending my first stakeholder conference – not something that happens in any other government department to my knowledge. 

‘Since I started I’ve travelled a lot, listened very carefully and learned a huge amount. Even being an accountant, and a serving permanent secretary in the civil service, did not prepare me for the enormous amount of work needed to understand what we do, how we do it and the perceptions and views of people about our performance. 

‘I’ve been struck by the enthusiasm and dedication of our people up and down the UK to deliver. Everywhere I have been so far, in more than 30 staff events, I find teams of people doing really great work, enthused by what they are doing. 

‘But, that enthusiasm and dedication is not reflected in the annual staff survey.  And changing staff engagement is one of my key challenges.’

Thompson set out HMRC’s three strategic objectives:

1. maximise revenues due and bear down on avoidance and evasion;
2. transform tax and payments for our customers; and
3. design and deliver a professional, efficient and engaged organisation.

He added that HMRC had ‘more than 60 individual targets to measure and report on’. A progress report on these targets is likely to be released later this month, although Thompson did not give any further detail.

In terms of investment and the future development of HMRC, Thompson admitted that the tax authority needs to continually adapt and change to meet customer expectations in a digital age.

‘Like any organisation that needs to remain relevant to the lives of its customers we must transform HMRC. The needs and expectations of the majority of our customers continue to change and we adapt and improve to meet those expectations. 

‘HMRC has the potential to transform into one of the biggest digital organisations in Europe. 

‘In the first nine months more than four million people and more than five million businesses have used their digital tax account – a secure, more convenient and cost-effective way of doing business. 

'At the peak of self assessment, more than a quarter of million taxpayers used secure webchat. And these online services are always on, so customers can do what they need to do at a time that suits them, rather than at the times that suit HMRC’s working patterns.  

‘So we’re sweeping aside time-consuming processes rooted in paper and post and replacing them, in the vast majority of cases, with something that takes just a few clicks of a mouse or taps of a smartphone screen.

‘We’re doing this in a way that ensures that our digitally-disadvantaged or digitally-excluded customers aren’t being left behind, and will still be supported through our Needs Enhanced Support phone and face-to-face services.’

Compliance for the Future programme

‘One of HMRC’s three strategic objectives is to maximise revenues due and tackle avoidance and evasion. So it’s important for us to consider how we can improve voluntary compliance and reduce the scope for non-compliance on a day-to-day basis, as part of our transformation plans,’ he said.

One of the key pillars of the evasion clampdown will be the Compliance for the Future programme, which is designed to deliver a new model that focuses compliance activities on the areas of greatest risk.

This will use better case management systems, develop more effective and efficient ways to address tax risk, and use technology more effectively to support HMRC’s Promote, Prevent and Respond strategy.

Making Tax Digital – businesses

On the major Making Tax Digital programme, which is currently out for consultation for the majority of the business aspects of the scheme, once again the notion of quarterly reporting was ruled out.

He said: ‘I know that some of you have had concerns around Making Tax Digital, including that these changes mean quarterly tax returns for businesses. They don’t.

‘The new digital accounts will integrate all the different information that businesses already provide to HMRC into a simple, streamlined system.

‘Instead of one onerous tax return each year, once a quarter businesses can check that the information they are collecting digitally is correct, and simply click "send" to update HMRC – as they already do monthly with real time information [RTI] for payroll taxes.

‘I think we’ve made some real progress in delivering this transformation. We reached a milestone in April, when we passed the five million mark for customers using the online Business Tax Account, which is a key part of Making Tax Digital for businesses.

‘Customer feedback shows an average satisfaction rate of more than 75%.

‘This is a significant step towards our Making Tax Digital ambitions and as we continue to deliver the programme we will be looking for feedback from you to help shape and improve the online account.’

A key part of this is the Making Tax Digital consultations, which were launched in mid-August. There is still a further element of the consultation package which has not been released, covering larger  businesses and SMEs, particularly the ins and outs of quarterly reporting. This is likely to take the form of a policy discussion paper and will be released later this year. No fixed dates have been set for this.

Customer service

The move to digital and online services is key to the department’s productivity initiative and is part of the wider cost cutting and austerity programme running throughout government departments.

At the same time, it reflects a universal move to online service delivery, particuarly for individuals, hence the high level of compliance with online self assessment, whcih was used by around eight million taxpayers in the last reporting cycle ending 31 January.

‘We believe the digital transition in customer service is popular. Almost 8m people did their self assessment returns online this year – an increase of more than half a million on last year – and by the 31 July deadline, almost a million customers had renewed their tax credits online.

‘But customer service isn’t just about improving our online offering. We also have to make sure it’s quick and easy for customers to access advice in other ways, something we haven’t always been great at.’

Poor customer service is a priority for HMRC with the long waits on telephone calls a major cause for complaint by taxpayers in 2015. This was at its worst in early 2015, but investment in a new phone system and staffing reallocations have helped to improve performance.

Thompson said: ‘Thanks to the hard work of our staff and as a result of the investment in new IT and telephony, our service rapidly recovered and we are now consistently achieving the best customer service levels we’ve had in years.

‘What’s more, these are sustainable improvements: in the past nine months, we’ve consistently answered 85-90% of calls and in around five minutes.

‘We’ve had weeks where the average waiting time was less than three minutes.’

There are also plans to roll out a seven day service at HMRC.

‘Our next step is to deliver even faster answering times and to move to seven-day customer services.’

Regional reorganisation and local offices

There was also an update on the reorganisation of HMRC’s regional offices into a network of 13 super hubs, first announced in November 2015. This will see the eventual closure of 137 out of 170 offices by 2020/21, affecting 60,000 staff currently employed across the country.

The first regional hub to open will be Croydon in south London, set to open in 2017, with a staff of 2.500, while offices in Belfast and Liverpool are set to follow.

‘We recently signed the lease Ruskin Square in Croydon and plan to start moving colleagues in next year,’ said Thompson. ‘Croydon will become a centre of excellence for compliance, predominantly covering London and the South East. It will become one of Croydon’s largest employers, with around 2,500 full time equivalent staff in state-of-the-art facilities.’

‘I expect to make further announcements about the locations of our other centres and our organisational design over the next few months. I’ll expect Belfast and Liverpool to be early priorities.

‘We’ll continue to keep you updated once details have been shared with our staff.’

Essential reading

Find out more about the Making Tax Digital programme and consultations: what you need to know

Making Tax Digital timings: HMRC sets out timetable for digital tax accounts