The number of businesses being negatively affected by HMRC’s poor service has shot up by 23% in less than six months.
In October 2023, 52% of businesses said the service levels at HMRC were having a negative impact on their operations. This rose to to 66% in March 2024, before shooting up to 89% in August (source: a recent ACCA survey of businesses.
Shockingly, just 1% of respondents said that service levels at HMRC had a positive impact on their business in August 2024, down from 4% in October 2023.
Additionally, the number of respondents stating the service levels had no impact on them at all decreased significantly. One third of respondents said this in October 2023, falling to 25% in March 2024. Now just 7% of respondents believe the service levels at HRMC have no impact on their business.
The number one issue for businesses was communication, with 91% stating the length of waiting time on hold for HMRC needs to be addressed. Significantly, 80% also said they would welcome moving to alternative methods of communication, such as email, which HMRC does not use for security reasons.
The ACCA, said: 'Whenever we speak to our members, poor service levels at HMRC are almost always top of the agenda. The fact that negative attitudes have risen by over a fifth in five months shows meaningful change is needed.
The ACCA has repeatedly called on the Chancellor to provide investment in HMRC to bring the service up to standard, and it's something we've reiterated ahead of the Budget later this month.'
ACCA has highlighted four areas which it believes the Chancellor should target with calls for urgent reform of the overly complex tax system. However, it was not confident about progress without additional measures.
The head of technical and strategic engagement, said the: 'ACCA believes in three foundations for a good tax system: simplicity, certainty and stability. Without a wholehearted commitment from the Chancellor to creating a modern, simplified tax system, these problems will continue to impact and affect all areas of economic activity in the UK.'
It also called for action on the last government's proposals to regulate tax agents which includes the introduction professionally regulated agents by restricting tax management to qualified agents which could save time and build back trust in HMRC (but the ACCA does not mention that taxpayers would be forced to pay those agents to help repair HMRC's shortcomings!).
Peter Nichols FFA FTA FIPA Cert PFS -Tax Director
BFN Accounts & Tax Limited