HMRC still has much more to do improve its performance in dealing with its customers according to an assessment by the National Audit Office (NAO) of the department’s progress over the last five years in making tax collection more effective
The watchdog reviewed HMRC’s responses to recommendations made in reports from the NAO and the Public Accounts Committee (PAC) since 2010. It says that while HMRC has made good progress towards achieving its primary objectives of maximising revenue and making sustainable cost savings, it continues to experience difficulties in raising levels of customer service.
The NAO points out that HMRC now does not expect to meet its own 2014-15 target of answering 80% of telephone calls nor its target to answer 80% of post within 15 working days.
The report states: ‘People do not have a choice about whether or not they interact with HMRC. This places an even greater obligation on HMRC to provide a good service and deliver the standards of customer service that people expect from other businesses.’
The NAO says it is also concerned about HMRC’s ability to make further improvements in delivering customer service as it moves towards a digital strategy.
The watchdog says that while HMRC has a strong track record in implementing new technology, when the NAO reviewed preparations to replace the Aspire contract in 2017, it identified significant risks if HMRC is unable to build sufficient commercial and technical capability in time and says this will be a major challenge.
The report states: ‘In the longer term, HMRC aims to provide its customers with the same high levels of service as experienced from banks, retailers and other service organisations offering more personalised and convenient contact. HMRC sees digitalisation as key to its ability to modernise its business and deliver a better service with fewer and better targeted resources.
In the new parliament, the committee might wish to consider HMRC’s progress in improving customer service, and how quickly and effectively HMRC is digitising its processes to give a better level of service which responds to customers’ needs.’
The NAO highlights a number of areas where it says HMRC has made progress since 2010. These include tackling marketed tax avoidance, and improving the transparency and accountability of the settlement of large tax disputes. It also says the department responded with ‘commitment and rigour’ to tackling the backlog of PAYE cases which resulted from the introduction of a new National Insurance and PAYE service.
However, it says there is a need for HMRC to adopt a more structured and proactive management to the administration of tax reliefs.
Amyas Morse, NAO head, said: ‘HMRC is among the strongest government departments in terms of managerial competence and its robustness in managing the risks to its essential function of tax collection. It now faces some significant challenges, however, if it is to harness new technology effectively and thereby exploit the data it collects.
Lin Homer, HMRC chief executive, said the department had ‘significantly improved our customer services from a low point in 2010-11’, but admitted: ‘We accept that we are still not consistently providing the right levels of service, which is why we are accelerating our investment in digitisation to provide the much more modern services that customers now expect.’
Homer also said she welcomed the NAO report, saying it ‘properly recognises the considerable progress we have made in strengthening our performance, capability and powers in increasing compliance revenues, reducing costs and improving services to customers.’
NAO’s report, Increasing the effectiveness of tax collection: a stocktake of progress since 2010, is here: http://www.nao.org.uk/wp-content/uploads/2015/02/Increasing-the-effectiveness-of-tax-collection-a-stocktake-of-progress-since-2010.pdf
