The Revenue, which has set an aim of answering 80% of calls within five minutes, has been accused of being “unambitious” by the spending watchdog.
According to the PAC, the tax authority received 79 million calls in 2011/12, with 20 million calls never answered at all. If the new targets are met, it would still mean an estimated 16 million callers waiting longer than five minutes to speak to an advisor. A third of letters sent in the year were not given a response within a 15-day target.
Margaret Hodge, chair of the committee, said, “Officials are beginning to realise that good customer service lies at the heart of any strategy to maximise revenues while cutting costs.”
“HMRC’s ‘customers’ have no choice over whether or not they deal with the department," she added. "It is therefore disgraceful to subject them to unacceptable levels of service when they try to contact the department by phone or letter. In 2011-12, 20 million phone calls were not answered. It cost the callers £136m while they waited to speak to an adviser. And, against its target of responding to 80% of letters within 15 days, the department managed to reply to just 66%. This is an abysmal record.
“We are pleased to see signs that HMRC is changing its attitude. Officials are beginning to realize that good customer service lies at the heart of any strategy to maximize revenues while cutting costs."
The damning report comes a week after HMRC announced it is going to close all of its 281 tax enquiry centres in 2014, meaning that more people will be reliant on the phone service to gain advice. The offices gave face-to-face help to 2.5 million people with tax queries last year. HMRC said the move will save £13m a year.
“Just how the department is going to improve standards of customer service, given the prospect of its having fewer staff and receiving a higher volume of calls, is open to question," added Hodge. "HMRC plans to cut the number of customer-facing staff by a third by 2015. At the same time, the stresses associated with introducing the Real Time Information System, Universal Credit and changes to child benefit are likely to drive up the number of phone calls to the department."
In December, a report from the National Audit Office was also highly critical of the Revenue’s record on answering phones, saying the department was giving “poor value for money for customers”.
In today's report, the PAC did praise the change that costs for callers would be reduced by the end of the use of the 0845 numbers later in the year. By the end of the summer, all its helplines should have switched to cheaper alternatives.
HMRC spent approximately £900m on customer service throughout the year, around a quarter of its £3.7bn total expenditure.