Accountants everywhere have raised concerns about understaffing at HMRC, complaining about prolonged delays in processing basic tax details and its subsequent impact on businesses and the economy ...
HMRC has acknowledged these issues, but it is very frustrating for many!
I really do have to label the service as "diabolical" and it really needs urgent action. Collectively, accountants and professional bodies feel the Government should establish an emergency task force to address HMRC's backlog and enhance service standards.
"This will support business growth and increase tax revenue for public services!"
Although HMRC claims to respond to most correspondence within 15 days, successfully handling approximately 70,000 daily calls and maintaining 'customer satisfaction' at around 80%, the slow processing of information is preventing businesses from conducting their usual trade across the country.
HMRC has acknowledged these issues, attributing some of the problems to a "significant attack from VAT registration fraudsters" in July 2022, which led to the implementation of new security measures that inadvertently affected genuine customers.
Despite the challenges, HMRC reported a record tax collection of £731 billion last year. The Public Accounts Committee highlighted that HMRC has reduced customer-facing staff from 25,500 to 19,500 over the past five years while transitioning customers to digital systems.
"However, I feel the benefits of digitalisation have not materialised as expected!"
Following an increase in staff during the pandemic, needed to process all the additional claims for support, reducing those numbers was definitely premature and should be considered as cuts rather than efficiency savings.
HMRC has cited the COVID-19 pandemic as the cause of the backlog and believes that further digital improvements will encourage customers to use online channels instead of phone and post, leading to increased efficiency.
As the UK economy struggles to recover from the pandemic, I truly believe the HMRC staffing crisis must be addressed to prevent further disruption to businesses and economic growth.
Let's see if HMRC listen and makes some vital changes soon.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about these HMRC delays, it may be a great idea to call me on 01908 774320 and let's see how I can help.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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