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MPs take sceptical stance on HMRC transformation

15/01/18

Committee report says priorities have to change in effort to become ‘world class digital tax authority’

A House of Commons committee has said that HM Revenue & Customs (HMRC) is taking on too much at the same time in its transformation programmes, and that despite new digital services there will be continued pressure on its call centres.

The Public Accounts Committee (PAC) has highlighted a number of difficulties in its new report on the department’s performance over 2016-17.

The department has made some hard decisions on the allocation of resources to prioritise the programmes, increase tax revenues and tackle tax evasion, error and fraud; but the PAC says it is concerned about the impacts on the ordinary taxpayer.

Its overall findings are that HMRC – which has the ambition of being a “world class digital tax authority” – is having to consider how to change its priorities in its 15 major transformation programmes, largely due to the additional pressures from Brexit.

Brexit pressure

Changes in the customs regime from Brexit – the nature of which are still unknown – are going to place new pressures on HMRC systems, as the committee highlighted in a report published last November. It says that in the light of this the department should update its original assumptions and amend the forecasts for its transformation programme, especially those around customer demand for its services.

This relates to the outlook for the level of its customer service. It has improved since the “unacceptable” levels of 2015-16, but the PAC says it is concerned about the ability to keep this up.

One of its findings is that, despite a shift to digital services, HMRC’s call centre advisers had to deal with 8 million more calls than forecast in 2016-17. It is continuing to provide support for digitally excluded customers, but the committee is sceptical that it is doing enough to help more vulnerable people, and is worried about a “disparity of service” between the treatment of wealthy customers and others.

It also raises an alarm over an HMRC forecast that the overall level of error and fraud in tax credits is set to increase. This is expected to get worse with the transition to universal credit.

Meg HillierChair of the PAC Meg Hillier MP (pictured) said: "HMRC's transformation programme would have been less risky had it not attempted to do everything at the same time. What was already a precarious high wire act is now being battered by the winds of Brexit, with potentially catastrophic consequences.”

She added: “HMRC accepts something has to give and it now faces difficult decisions on how best to use its limited resources—decisions that must give full consideration to the needs of all taxpayers.

“In particular we are concerned about the effect on people simply trying to pay their fair share. HMRC’s customer service has improved on the appalling levels of recent years but its claims about call-answering times don’t stack up. Any new deterioration would be wholly unacceptable.”

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