UK Parliament's Public Accounts Committee calls on HM Revenue & Customs to reverse worsening customer service and step up debt recovery and enforcement

The UK Parliament’s Public Accounts Committee (PAC) published a report finding that HM Revenue & Customs (HMRC) service to taxpayers has deteriorated further from last year’s reported low and is eroding trust in the tax system. The PAC urges HMRC to take responsibility for its customer service failures and to act more boldly in tackling tax system abuse and pursuing debts owed to the Exchequer. The report notes that 66.4% of customers’ attempts to speak to an adviser were answered and that average call waiting times exceeded 23 minutes, warning that services could worsen if HMRC cannot meet rising demand. It raises concerns that HMRC has restricted phone access to push customers online before digital services are ready, with some services not available online and HMRC accepting it is behind many organisations in providing secure digital messaging. On debt, the PAC calls for a plan to collect older liabilities before they become uncollectable, highlighting that HMRC wrote off GBP 5 bn as uncollectable in 2023-24, up from GBP 3.2 bn in 2022-23, and citing an estimated risk that 45% of debt owed could become uncollectable. The PAC also welcomes HMRC’s goal to reduce the tax gap but calls for a stronger approach to abuse, including improving understanding of an offshore tax gap currently estimated at GBP 0.3 bn, and flags falling rates of criminal investigation and prosecution. The PAC recommends that HMRC set out how it will pursue older debts, develop a clearer picture of offshore non-compliance, undertake research on the most effective deterrents for tax evaders and organised criminals, and explain how deterrence will be maintained if prosecutions are reduced.