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NAO points to shortcomings in HMRC digital services


Mark Say Managing Editor

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Digital services have not reduced the pressure on HMRC’s customer services as much as expected, according to a new report from the National Audit Office (NAO).

The value for money report says the department has not yet done enough to raise awareness of its digital services, increase customers’ confidence in using its online offering or understand how effectively these services meet customers’ needs.

It has a strategy to encourage customers to turn to its digital services first so that queries can be resolved quickly and easily online. This is intended to cut costs servicing telephone calls and correspondence, as well as free up staff to serve people who need extra support.

But it is not clear how far and fast digital will reduce demand for telephone and correspondence services, the report says, making the point that the digital services are better suited for straightforward queries and reporting changes in customers’ circumstances.

Telephone pressures

This has maintained the pressure on HMRC’s telephone services. Customers cumulatively spent 798 years waiting to speak to someone in 2022-23 - more than double the time spent waiting in 2019-20 – and the department is not expecting to meet its telephone performance target for 2024-25.

Advisers are taking more time on average to answer calls and handle fewer calls than in 2019-20. Many avoidable customer calls are caused by HMRC itself for reasons including process failures and delays, and customers chasing progress.

While the total number of telephone calls has reduced, the total amount of time advisers are spending on each call has increased. This means HMRC’s workload has reduced more slowly than reductions in call volumes.

The report identifies six digital services launched since 2015: the personal tax account, business tax account, HMRC app, making tax digital for VAT, the digital assistant and the child benefit service. It said there were unrealistic expectations about the pace at which some could be introduced and they had been implemented more slowly than had been planned.

Some, such as the digital assistant, had limitations in their performance and stakeholders have raised concerns about their quality, functionality and accessibility.

Increasing usage

Customers are increasing their use of digital services year-on-year, but it is not always clear to them what functions and query types can be handled, and some people need support to use them. HMRC’s understanding of these issues is limited, says the report.

In response, the NAO recommends that HMRC should take steps such as by increasing opportunities for customers to send correspondence and documentation through secure electronic networks, and learn from the implementation of its digital projects.

It should also develop more realistic plans for cutting the services it is replacing with digital channels and adopts a more customer-focused approach to encourage the take-up of new services.

Head of the NAO Gareth Davies said: “HMRC’s telephone and correspondence services have been below its target service levels for too long.

“While many of its digital services work well, they have not made enough of a difference to customers, some of whom have been caught in a declining spiral of service pressures and cuts. HMRC has also not achieved planned efficiencies.

“HMRC must allow more time for these services to bed in and understand the difference they make before adjusting staffing levels.”

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