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HMRC underperformance is impeding economic growth according to ICAEW

Institute of Chartered Accountants in England and Wales (ICAEW) has reported on HMRC underperformance – taxpayers and accountants are having to wait up to a year for HMRC to respond to queries over the phone or by post, while callers report that they have waited for more than an hour before being cut off.

ICAEW says that these delays are impeding economic growth and that HMRC is trapped by its backlog. It is demanding that the government urgently tackles this issue if it is serious about building the ‘pillar of enterprise’, set out by Chancellor Jeremy Hunt in his recent speech on reviving the economy.


Emergency taskforce needed to address the issues

ICAEW is calling for the immediate creation of an emergency cross-sector taskforce to address unacceptably long delays due to HMRC underperformance, and to clear the backlog.

It suggests that the emergency taskforce would be responsible for identifying areas for support to end delays, as well as recommending improvements to HMRC’s service standards to enable business growth.

According to ICAEW chief executive Michael Izza, ‘The delays at HMRC are unacceptable, need to be addressed promptly and are acting as a drag on the UK’s economic growth.

‘We’re calling on ministers to set up an emergency taskforce to identify steps to eliminate HMRC’s backlog and improve its service standards, so that in the future it supports, not inhibits, business growth and maximises the tax receipts needed to fund public services.’

The taskforce would include representatives from professional bodies and from business, who would be allowed to make recommendations to HMRC to improve its services and clear its backlog.


Commons Public Account Committee (PAC) also calling for action

In January this year the PAC also reported that HMRC services were operating at an unacceptable level, and that people are being by let down by poor customer service which is damaging relationships between HMRC, compliant taxpayers and the agents supporting them.

The PAC demanded that HMRC publish a three-year plan to revive its troubled customer services.


What’s causing the delays at HMRC?

It is unclear whether the waiting times relate to financial or other resource constraints, but the time it takes for HMRC to respond is perceived by many accountants to be the single biggest obstacle to growth and tops the list of complaints by members, ICAEW said.

Customer service staffing levels at HMRC have reduced from 25,500 to 19,500 people which is contribution to the long delays for both agents and taxpayers.

The call for improvements at HMRC is just one of a series of ICAEW recommendations made to the government ahead of the Spring Budget on 15 March.


With £48 billion uncollected taxes the pressure is on HMRC

The level of tax debt owed to HMRC reached a staggering £48.1 billion at the end of 2022.

£715.5 billion taxes were collected by HMRC in 2021 to 2022 and whilst this was an increase of 22.5% from the year before, HMRC says that it is further increasing resources focused on debt collection. In the light of this it is no surprise that we are witnessing an increase in HMRC enquiries across the board.


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HMRC underperformance

The information was correct at time of publishing but may now be out of date.

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Posted by Cowgills
24th February, 2023
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