Our members highlighted productivity and efficiency as the two main areas suffering because of poor HMRC services. This is a 14% increase in negative sentiment from the previous ACCA survey in October 2023, showing us SMEs are reaching breaking point with the service.
Accountants and financial professionals often choose contacting HMRC as a last resort, having exhausted all other routes, as they know they are likely to end up wasting many hours sorting basic tax issues, costing time and money for themselves, their clients, and HMRC.
We are seeing HMRC let down SMEs during a period when they most need support.
We asked the Chancellor repeatedly and consistently to invest in HMRC, as the service is simply unequipped to meet current demand. The key changes ACCA is calling for in HMRC services are threefold:
- First, improvements to HMRC communications must be made. Currently, much agent and business time is wasted requesting and chasing resolutions to basic tasks. Processes which used to be completed within days are now taking weeks.
- Secondly, accountants tell us that each time they manage to access HMRC by phone – often after extensive time on hold – they frequently must start again trying to resolve the issue due to poor CRM records on existing queries. This can be compounded by a lack of technical knowledge by call handlers who are often unable to resolve the issue, causing further delays to the agent, the business, and HMRC. Investment is needed in training.
- Finally, HMRC should look to work only with agents who are members of a recognised professional body. This has been raised by ACCA over many years, as it has long been recognised that HMRC has some agents it deals with who act in an unprofessional manner. Both the government and HMRC should recognise the value of timesaving and trust offered by professionally regulated agents. These are particularly in targeted areas where tax gaps have been identified. HMRC will have to be clear and careful on how it defines professional body so only those with clear accountability, backed by clear and transparent standards, are included. We will support and advise HMRC to ensure the greatest possible competition and choice in the tax advice market for taxpayers, while ensuring an appropriate degree of regulation and protection.
ACCA recently contributed to a report Funding the Nation: Optimising HMRC which suggests targeted investment in HMRC could deliver an additional £11.3bn for the treasury and improve the service for taxpayers. I believe the time is long overdue for significant change. The government, HMRC, and finance professionals must work together to create a solution which works to the benefit of all parties – society, government, and taxpayers. A solution is needed that serves to help our taxpaying businesses. Government should take seriously the idea of simplifying and clarifying the tax process. This would be achieved best by involving accountants who deal daily with tax, and integrating their professional experience and knowledge to create a more streamlined tax system. This would help avoid errors and increase compliance, reducing enquiries which drain HMRC resources. This would leave tax authorities free to address the tax gap, and serious and deliberate evasions which negatively impact effectiveness and trust.
