MPs raise concerns about HMRC plans

MPs raise concerns about HMRC plans

A committee of MPs has expressed concern about HM Revenue & Customs's ability to deliver its transformation programme and keep customer service at acceptable levels.

The public accounts committee has published a report into HMRC's performance which has raised concerns about the growing challenges facing the tax authority.

One of the issues the committee highlighted was that HMRC's assumption about reduced consumer demand because of the increasing use of digital services had not played out in reality.

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This meant HMRC had failed to achieve its expected efficiency savings in the first year of its transformation programme, which includes a shift towards digital and online technology which will bring about "the end of the tax return" by 2020.

But the committee found HMRC now only expected to deliver £707m in savings by 2020 instead of its target of £717m.

The report stated: "HMRC admits the programme would have been lower risk if it had not tried to do everything at the same time and also points to the potential 15 per cent extra workload from projects relating to Brexit.

"HMRC plans to reprioritise its programme plan by the end of the current financial year, mid-way through its four year efficiency programme, and subsequently to advise ministers on what will need to be delayed or stopped."

Meg Hillier, the committee's chairman, 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.

"Action arising from allegations in the so-called Paradise Papers could also significantly increase the authority’s workload.

"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."

The committee highlighted the work HMRC had done to improve customer service, achieving its best performance in the past five years against its key targets due to additional investment.

But the MPs warned that HMRC's plans to cut its budget depend on reducing levels of customer demand as new digital services are introduced.

The report stated: "HMRC’s original assumptions on the extent to which customer demand could be reduced were too aggressive, and HMRC’s call centre advisers had to deal with eight million more calls in 2016 to 2017 than forecast.

"HMRC says it will support vulnerable and digitally excluded customers by continuing to provide phone services seven days a week and face-to-face ‘surgeries’ in 300 locations.

"However, we remain sceptical that this will be enough to help more vulnerable people, and are concerned about the disparity of service between how HMRC deals with high-net-worth customers compared with the ordinary customer.

"HMRC could not give a guarantee that it would wait for demand to fall before cutting its headcount, and warned of a potential risk to customer service performance in future years."