hmrcMassive changes are taking place in the way the tax department, HMRC, is organised. It’s all part of the transformation initiative at HMRC called ‘Building our Future’. The move is designed to reduce usage of phone, post and face-to-face services by shifting customers to using online services instead. Cost-cutting has not been given a reason for the reorganisation, but costs will be cut. At Tarrant Green & Company we’re concerned that this will impact on a public service that is already failing to hit targets.

What’s going on?

There have already been several major reorganisations within HMRC since the Inland Revenue merged with Customs & Excise in 2005. So what’s happening and what’s the likely impact?

  • Over the next 5 years HMRC will close 137 offices around the country, this includes the closure of 43 offices in London and the South East.
  • Staffing levels continue to be reduced but no figures have been made available. Around 11,000 staff in personal tax were cut between 2010 -11 and 2014-15, leaving around 60,000 staff.
  • Operations will be concentrated into 13 regional hubs located in Newcastle, Manchester, Liverpool, Leeds, Nottingham, Birmingham, Cardiff, Belfast, Glasgow, Edinburgh, Bristol, Croydon and Stratford. These will open from 2016-17 to 2010-21.
  • A number of transitional sites will remain open for up to 12 years in Reading, Ipswich, Portsmouth, Washington and subject to lease agreements, East Kilbride.
  • The organisation will change at a high level too, four divisions will become three which will be a new customer strategy and tax design group, a customer service group and a customer compliance group – which in fact deals with non-compliance and enforcement! This change begins from 1 October 2016 and should be completed by December 2016.

What does it mean?

In effect, local offices which could be visited for face-to-face queries will no longer exist. It’s all part of the digitisation of the service, with the move to online transactions. Doubtless, online transactions can be quick and convenient. But for anyone with a question, getting a response to their query by phone or post could find this difficult. Anyone who is in dispute with the tax office could find things much harder yet.

HMRC point out that ten years ago just 38,000 tax returns were filed online – today, it’s 8.75 million. Yet despite the logic of their digitisation strategy, HMRC already has a problem with its service standards, as borne out by a review by the National Audit Office (NAO) in July. This cannot be resolved by online services alone. Anyone who has ever tried to resolve a tax issue with the tax office will know how difficult it can be to get a response or clear advice.

Poor service is a real problem

Demand for advice from HMRC has not reduced in line with provision of digital services. In fact, the NAO criticised HMRC for withdrawing frontline staff in personal taxation before their digital strategy was working which resulted in a virtual meltdown in 2014 with staff having to be diverted from PAYE tax administration to cope with the demand. In the first half of 2015-16 call waiting times trebled. At the peak of demand in October 2015, during deadline week for paper tax returns, call waiting times for people calling about self-assessment peaked at 47 minutes. Over 25% of people abandoned their calls due to the excessive waiting times. The NAO also highlighted the increased burden in telephone charges which customers faced. The cost more than doubled from £63m in 2012-13 to £97m in 2015-16.

A recent NAO survey of customers using HMRC services discovered:

  • 58% rated the service as good or excellent
  • 21% rated the service as poor or terrible
  • 21% rated it as average

Satisfaction was highest amongst those who’d used the online service most recently and lowest amongst those who has been in contact by phone. The fact that one in five customers rate the service as poor shows the scale of the problem.

Get the support you need

At Tarrant Green & Company we’ve supported many individuals and businesses with their tax affairs. This includes Personal and Company Tax Returns and advice on tax planning. We also support clients during HMRC investigations and represent them at HMRC Commissioners hearings. If the turmoil at HMRC is causing you difficulties, then do talk to us about our tax advice service. We’re there to help you get things right from the outset and avoid unnecessary hassle. In situations where there is an issue to resolve we’re at hand to help you get the best outcome.

For advice, please email info@tarrantgreen.com or call +44(0)1438 869 644.