Public Accounts Committee report: HMRC service levels need to improve to rebuild public trust
Public Accounts Committee report: HMRC service levels need to improve to rebuild public trust
Commenting on the Public Accounts Committee report on the cost of the tax system, Dawn Register, a tax partner at BDO said:
“The report from the Public Accounts Committee highlights the rising costs of administering the tax system, affecting both HMRC and taxpayers. HMRC's costs have increased by 15% in real terms from 2019–20 to 2023–24, largely due to expanding its compliance workforce and updating legacy IT systems. The complexity of the tax system is a significant concern, leading to increased opportunities for evasion and errors, which in turn affects taxpayers' trust in HMRC. Trust is crucial for ensuring taxpayers meet their obligations, yet it has been declining across various groups.
“The report calls for HMRC to simplify the tax system and improve trust by engaging with taxpayers to understand their concerns. It also emphasises the need for HMRC to enhance its digital services, reducing reliance on outdated processes like postal communication. This is something that we fully support, given the time it sometimes takes to communicate with HMRC.
“At present, the Government seems to be investing in HMRC in order to maximise collection rather than prioritise service improvements and efficiency. Indeed, what was particularly striking from the Chartered Institute of Tax’s latest survey of tax agents was that one in three calls to HMRC helplines was made to chase progress. This is a result of declining service levels which then creates more work, leading to a downward spiral. Service levels need to improve to help rebuild trust, boost productivity and reduce lost hours for HMRC, taxpayers and agents alike.
“The Making Tax Digital programme, while generating additional revenue, has also imposed extra costs on taxpayers, highlighting the need for HMRC to prioritise customer needs in its digital initiatives.
“Furthermore, the report stresses the importance of HMRC leveraging new technologies, including AI, to improve productivity and service delivery. HMRC must address the constraints posed by legacy systems to fully exploit these technological opportunities.”
“Ultimately, if a government really wants to achieve genuine tax simplification, it has to work on simplifying complex tax areas even if there is a risk of a short-term fall in revenues that has to be made up by adjusting tax rates.”
ENDS
BDO LLP operates in 18 offices across the UK, employing 8,000 people. It has UK revenues of £1bn.
It provides Audit, Tax, Deals, and Consulting, Risk & Outsourcing services predominantly to mid-sized, entrepreneurially-spirited, high-growth businesses that are driving growth in the UK economy. BDO calls this segment of the market the UK’s economic engine.
BDO LLP is the UK member firm of the BDO international network.
BDO’s global network
The BDO global network provides business advisory services in 166 countries and territories, with more than 119,000 people working out of 1,800 offices worldwide. It has revenues of US$15bn.
Email: frank.x.shepherd@bdo.co.uk
Tel: 07812 463601
“The report from the Public Accounts Committee highlights the rising costs of administering the tax system, affecting both HMRC and taxpayers. HMRC's costs have increased by 15% in real terms from 2019–20 to 2023–24, largely due to expanding its compliance workforce and updating legacy IT systems. The complexity of the tax system is a significant concern, leading to increased opportunities for evasion and errors, which in turn affects taxpayers' trust in HMRC. Trust is crucial for ensuring taxpayers meet their obligations, yet it has been declining across various groups.
“The report calls for HMRC to simplify the tax system and improve trust by engaging with taxpayers to understand their concerns. It also emphasises the need for HMRC to enhance its digital services, reducing reliance on outdated processes like postal communication. This is something that we fully support, given the time it sometimes takes to communicate with HMRC.
“At present, the Government seems to be investing in HMRC in order to maximise collection rather than prioritise service improvements and efficiency. Indeed, what was particularly striking from the Chartered Institute of Tax’s latest survey of tax agents was that one in three calls to HMRC helplines was made to chase progress. This is a result of declining service levels which then creates more work, leading to a downward spiral. Service levels need to improve to help rebuild trust, boost productivity and reduce lost hours for HMRC, taxpayers and agents alike.
“The Making Tax Digital programme, while generating additional revenue, has also imposed extra costs on taxpayers, highlighting the need for HMRC to prioritise customer needs in its digital initiatives.
“Furthermore, the report stresses the importance of HMRC leveraging new technologies, including AI, to improve productivity and service delivery. HMRC must address the constraints posed by legacy systems to fully exploit these technological opportunities.”
“Ultimately, if a government really wants to achieve genuine tax simplification, it has to work on simplifying complex tax areas even if there is a risk of a short-term fall in revenues that has to be made up by adjusting tax rates.”
ENDS
Note to editors
About BDOBDO LLP operates in 18 offices across the UK, employing 8,000 people. It has UK revenues of £1bn.
It provides Audit, Tax, Deals, and Consulting, Risk & Outsourcing services predominantly to mid-sized, entrepreneurially-spirited, high-growth businesses that are driving growth in the UK economy. BDO calls this segment of the market the UK’s economic engine.
BDO LLP is the UK member firm of the BDO international network.
BDO’s global network
The BDO global network provides business advisory services in 166 countries and territories, with more than 119,000 people working out of 1,800 offices worldwide. It has revenues of US$15bn.
Contacts
Frank ShepherdEmail: frank.x.shepherd@bdo.co.uk
Tel: 07812 463601