Within seconds of the news breaking that HM Revenue & Customs is to close all of its 281 Enquiry Centres, it was the number one read story on the BBC website. Was this an indication of disappointment for the 2.5 million people who used the face-to face service last year, or merely passing interest from those who were interested to see how they should now get in touch with the revenue should they ever need to?
The move, which will come into effect in 2014, will save HMRC £13m a year, a much needed cost cutting exercise which will see funds being spent elsewhere. However, 1,300 jobs will be at risk, although HMRC say that they will do all they can to deploy these staff elsewhere.
So why exactly is the change happening? HMRC have said that the number of people using the Enquiry Centres across the UK has halved from 5 million in 2005-6 to 2.5 million in 2011-12. With each visit estimated to cost on average £152 per single person, HMRC have worked out that four out of five queries could have been solved online or via the telephone. That’s all well and good, but as we all know from previous encounters, HMRC are not the best at handling telephone enquiries. The authority already receive in excess of 60 million calls a year, and with the average waiting time of just over 10 minutes, surely this decision is going to be an even bigger burden, to an already overworked telephone system?
To combat this, HMRC have set themselves some targets. From April, they want 80% of all telephone calls to have been answered in less than 5 minutes. Secondly, call costs will be reduced, and new systems put in place to support the extra incoming telephone traffic. This plan of action from HMRC is a step in the right direction, but the facts remain that even if 80% of calls are answered in 5 minutes or less, it still leaves 16 millions callers waiting for longer than this estimate, as well as being well short of the industry benchmark which sees 80% of calls being answered within a 20 second time frame. Furthermore, picture yourself trying to explain a piece of paperwork over the phone. You cannot physically show the piece of paper, the operator is reading off a scripted answer sheet and you are getting nowhere. Sound familiar? The move will surely face backlash with those who do not enjoy the ‘telephone centre culture’ that many big businesses now opt for.
It is also painfully clear that HMRC have to improve on their current performances in regards to answering phone calls and letters, especially when looking at figures from 2011/12. The Public Accounts Committee discovered that 79 million calls were received during last year, but 20 million calls were not even answered. Furthermore, a third of all letters received by HMRC were not given a response within the 15-day target – making it clear that although targets are set, they are not always met.
So how exactly does the new process of speaking to HMRC work? As we have already explained, people will need to call HMRC directly to get their tax query answered. Should HMRC then decide that the issue needs to be discussed face-to-face, they will offer the option of visiting the customer in their home or elsewhere – but no set procedure has been put in place to define what cases require home visits. If the thought of HMRC visiting your house doesn’t fill you with the joy, there is also a cost implication worth considering. As the old saying goes, ‘time is money’ and surely the amount of wasted journeys – as customers forget appointments, or cancel last minute, will result in a huge cost implication for the revenue. In an office you can use the time of a cancelled appointment effectively to complete other jobs, on the road you can’t, and this will need to be addressed. Will there be fines for anybody who fails to turn up to an arranged appointment?
By announcing the closure, HMRC are targeting a £955m annual reduction in running costs – alongside the projection of an extra £7bn worth of tax coming in. The HMRC Staff’s Union, PCS, have already said they are unhappy with the decision to close centres, and it remains to be seen whether the general public will agree.
As a firm, we would only phone HMRC for information about a clients tax affairs, we would never call them for advice. There is an awful lot of information on HMRC’s website and if people can’t get the information they need, perhaps they should engage an accountant to sort out their tax affairs!
Image by Alan Cleaver.