Following months of deteriorating service on helplines, the Treasury has increased funding by £51m to bring HMRC’s phoneline service back up to 85% of calls answered

Nigel Huddleston, financial secretary to the Treasury confirmed the new funding in a statement to parliament, pledging that the money would address the current 66.6% calls answered rate.

‘The government is providing HMRC with £51m in new funding to bring HMRC’s phoneline service back up to the published target of 85% of calls to HMRC advisers being answered,’ Huddleston said.

‘The additional funding enables HMRC to meet the performance standards on its phone lines that its customers expect, while continuing the transition to a digital first model of tax administration.

‘The government is fully committed to providing HMRC with the resources it needs to meet the needs of all its customers, and will continue to do so.’

Performance at HMRC call centres has to improve substantially if they are to achieve an 85% answer rate.

In February 650,000 phone calls were abandoned, while 2.9m people tried to call HMRC. In total only 66.6% of calls were answered while a third were left hanging. Of those who called, 947,000 taxpayers listened to the recorded messages while waiting to speak to an adviser and went to the HMRC webchat to find an answer to their query.

The additional funding comes on the back of HMRC’s decision to close the majority of helplines, which was reversed within days of the announcement in March due to outrage from taxpayers, professional bodies and even the Chancellor Jeremy Hunt.

Speaking at a Treasury Committee hearing days after the decision to reverse the closure, chief executive Jim Harra said HMRC was stunned by the ‘strength of feeling’ on helpline closures.

Harra told MPs: ‘There was a strength of feeling from stakeholders that we did not expect. Our strategy is still digital first but we are not proceeding with the changes announced on 19 March. We will engage with stakeholders – we need to go through all the concerns that stakeholders had.’

He also admitted: ‘Ministers certainly expressed their concern about the reaction and genuine concern about how this would work.’

However, Harra stressed that HMRC was unable to provide an adequate phone service with the current level of staffing at the tax authority.

Harra said: ‘Given that we are not going ahead with these closures, we need to deploy more helpline resources.

‘We do not have the funding to do this but we are in discussion with ministers about our plans to produce the best level of service that we can after not going ahead with the decision of 19 March.

‘The response will have to be that we deploy extra resources on our phonelines and whether that is through additional funding or reprioritising other services.’

Last year HMRC received over three million calls on just three issues that can easily be resolved online: resetting an online password, getting a tax code, and getting a National Insurance number, Huddleston said.

‘Shifting customer contact such as this to online interactions is helping to, and will continue to help, reduce demand on phone lines and allow HMRC to prioritise calls for those who really need to speak to an adviser,’ said Huddleston. ‘This is a fine example of a tangible way to improve public sector productivity.

‘This digital first strategy is the correct long-term vision for tax administration. In support of this, the Chancellor invested over £136m in the 2021 Spending Review to enable HMRC to enhance their digital services. HMRC received a £900m cash increase over this parliament, from £4.3bn in 2019-20 to £5.2bn in 2024-25.’

Harra stressed that the priority for HMRC is a transition to digital first services: ‘We remain committed to expanding our online services, and encouraging customers to go online where they can, as we strive to deliver good services as cost-effectively as possible. But we recognise this must happen at a pace the public is comfortable with.

‘This additional funding will enable us to improve our helpline service for those who need to speak to us – including the vulnerable and digitally excluded – making sure they get the support they require,’ he said.

Responding to the funding boost, Caroline Miskin, ICAEW senior technical manager, digital taxation, said: ‘We are pleased that the government has recognised that HMRC is in desperate need of more funding to address poor service performance. While the £51m may not be enough to meet demand, it is a good start.

‘Given the need to find and train up staff there will be a lag before any improvements are seen, so any boost to HMRC customer service from this funding is unlikely to be seen until the autumn and service levels may drop in the meantime.

‘We fully support HMRC’s move to digitalise the tax system and move more interactions online. The problem continues to be that online services are not comprehensive and don’t always work well. HMRC needs to step up delivery of digital services while maintaining traditional services during the transition.’