Tory cuts to the UK’s tax authority will hit customer service and slash the money raised in tax collection, new internal Government research has found.
A “stakeholder” review by HM Revenue and Customs (HMRC) reveals that companies, charities, lawyers, tax agents and MPs believe that cost-cutting risks undermining its core function.
And with HMRC call centres across the country due to be axed in the next few years, the chief concern of those consulted is that the phone service for taxpayers will get even worse.
The new research, quietly published during the Parliamentary recess, follows stark warnings that plans to axe jobs and merge call centres will leave even more people hanging on to discuss their tax affairs.
More broadly, campaigners claim that job losses at HMRC will hit moves to tackle tax evasion by the wealthy individuals and corporations, or to curb the£16billion of tax lost every year in the UK to fraud and criminal activity.
The study commissioned by HMRC’s Behavioural And Customer Insight Team found that cuts were the biggest worry.
“Making sustainable cost savings is seen to be the least important of the three objectives by stakeholders,” it states.
“Many feel that HMRC cannot afford to make any further cuts without negatively affecting its ability to improve customer service and maximise revenue, and that as such, these objectives are inherently contradictory.”
The report adds “successful revenue collection without the provision of adequate customer service, support and advice does not equate to ‘success’...”
“Poor customer service – including telephone response times – is the primary reason given by stakeholders who say that HMRC performs poorly as the UK’s tax authority.
“Overall, the quality of HMRC’s customer service is stakeholders’ primary concern and the issue most likely to arise unprompted in the qualitative interviews.
“Improving customer services remains the most important HMRC objective for stakeholders, but it is identified as the objective on which it is performing least well.”
HMRC was this summer accused by a Commons committee of having a “staggeringly bad” record in answering phone queries.
Only half of calls were answered successfully between April and June, although performance has improved since.
Tax collection, on which many public services depend, could also be hit by the cuts, unions say.
Crisis warn that the situation will be made even worse by plans to close 175 local offices and replace them with regional offices.
Mark Serwotka, general secretary of the PCS Union which has fought against cuts since 2010, told HuffPost UK: “This is deeply embarrassing for HMRC.
“Its plans for the coming years are all predicated on more cuts, yet it is clear for everyone to see that is the exact opposite of what the department and our economy need.”
Earlier this year the Public Accounts Committee was scathing about HMRC’s record.
It claimed cuts to HMRC helplines have cost customers £4 for every £1 saved and left taxpayers waiting for an average of 47 minutes for their calls to be answered.
The committee warned that plans to cut the number of staff at HMRC by a third by 2021 could lead to another “collapse” in customer service and will “chill the blood of many taxpayers”.
It said that last year a decision by HMRC to save money by axing 5,600 staff led to “unacceptable” waiting times as people spent more than 4 million hours waiting for their calls to be answered.
Treasury ministers have insisted in the past that the switch to regional centres will improve service rather than undermine it, and say that more investment into tax evasion teams is yielding results.
The HMRC have been contacted for comment.
Only this week a new report by firm PfP found that on average it took just four-and-a-half minutes to get through to an advisor for those who phoned between the hours of 8:30am and 9:30am, or between noon and 12:30pm.
But those who called between 4:30pm and 5pm wait up to 12 minutes, with some callers having to hold for up to 25 minutes before being connected to an advisor.