AAT welcomes the suspension of planned cuts to HMRC’s self-assessment and VAT helplines, but warns the embattled agency needs long-term investment.

The Association of Accounting Technicians (AAT) has welcomed a temporary pause in the government’s plans to axe critical tax helplines.

AAT represents 120,000 accounting technicians and bookkeepers working in the UK and those studying to join them.

This week HMRC announced moves to shift its phone enquiry service to operating just six months of every year for taxpayers filing self-assessment returns. Outside of October-March, most clients would only have online options available to them.

The agency similarly planned to pare back phone support for those paying value-added tax (VAT). HMRC’s VAT helpline service would only be open for five days ahead of the filing deadlines each month under the planned changes,

“We welcome HMRC suspending its controversial plans to axe critical phone support relied upon by millions of UK taxpayers,” said Adam Harper, AAT’s Director of Professional Standards and Policy.

“HMRC’s announced cuts to its critical phone services would have been shocking to the majority of the public,” said Harper. “Our members have been sharing their concerns about HMRC’s service levels for some time, however we understand that HMRC are working hard to deliver improvements and solutions.”

In June 2023 HMRC piloted what it called a ‘seasonal model’ for phone services, pushing taxpayers to online guidance and web chat instead. Monday’s announcement would have made those changes permanent.

Accountants have expressed scepticism that shifting to an online-only model would clear HMRC’s sizeable backlog. Claire Bartlett, Director of Arden Bookkeeping, said the agency’s online chat function would require improvement first. Other accountants said HMRC’s phone services were critical to their work for following up online form submissions and chasing digital enquiries.

“The impact of making these changes permanent would have been enormous – both to many of our members, and to the thousands of business owners and self-employed people they serve,” said Harper.

“For so many taxpayers, these helplines are a lifesaver when it comes to navigating the complexities of their tax returns”.

The tax agency came under fire in February after the House of Commons’ Public Affairs Committee found customer confidence in HMRC had fallen to ‘all-time’ lows.

Harper said whilst AAT supported HMRC’s sudden U-turn, concerns remained about the agency’s long-term ability to deliver its regulatory functions and policy agenda without an urgent injection of funds from the Chancellor.

HMRC indicated that the planned cuts to the contact services were earmarked for deployment to other areas of its activities in dire need of resource. This begs the question: where is the resource now going to come from to fund these other, critical areas? What will the residual effect be on taxpayers?

“We recognise HMRC is under pressure, but the sustainable way out is through adequate investment from government – not by cutting its core services to insufficient levels, further damaging its reputation.”

The background: Call me, maybe?

Where did HMRC’s ill-fated ‘shock’ announcement come from, anyway? AAT Comment provides the background:

Last year HMRC temporarily closed its SA helpline between June and September as part of a trial to redirect customers to online services. Given it has been struggling to get understaffing issues and poor service under control, it was explained that HMRC wished to deploy staff where they’re most needed to react to peaks in demand.

HMRC claimed that making the trial changes permanent was evidence-based, describing the seasonal pilot where calls to the SA helpline were directed to online services as “successful”, pointing to higher webchat use since the rollout.

That point is somewhat undermined by the changes, announced only 24 hours earlier, being halted whilst HMRC considers how best to help taxpayers harness online services.

So, what were the changes?

Summary of changes to the SA helpline

Self-assessment customers were to be expected to self-serve using the HMRC app or online on GOV.UK wherever possible. As in the trial period, the helpline would have been closed between 8 April and 30 September 2024. During the peak period of 1 October to 5 April, advisers would have been available on the helpline to answer specific queries.

It was also announced that between 1 October and 31 January, advisers would have been available to support customers submitting their annual returns and making payments. And between 1 February and 31 March, the priority for advisers was going to be lined up to support customers with appeals and penalties. All other queries were to be directed to online services.

HMRC indicated that anyone who would struggle to go online or needed extra support because of their health or personal circumstances would always have been able to speak to an HMRC adviser.

What HMRC initially said

“Our shift to online self-service is continuing and progressively we will be a digital-first organisation. We are supplementing that by providing targeted telephony support at particular times of the year and for particular call reasons.

“Changing our helplines will allow us to focus support where its most needed. We must get the most out of every pound of taxpayers’ money. Embracing online allows us to be more productive and deliver these services without growing the state unsustainably.”

Why the about-turn?

The announcement has caused a furore, leading HMRC to halt its plans.

HMRC Chief Executive Jim Harra said “Making best use of online services allows HMRC to help more taxpayers and get the most out of every pound of taxpayers’ money by boosting productivity.

“However, the pace of this change needs to match the public appetite for managing their tax affairs online.

“We’ve listened to the feedback and we’re halting the helpline changes as we recognise more needs to be done to ensure all taxpayers’ needs are met, whilst also encouraging them to transition to online services.”

What now?

The announced changes to the Self Assessment, VAT and PAYE helplines will all be halted while HMRC engages with stakeholders. This means the phone lines will remain open between April and September – for now.

It is appropriate for HMRC to demonstrate that it has listened to the feedback received in response to yesterday’s announcement. However, the total halt raises questions both about the basis upon which the decision was initially made, and how prepared HMRC was to robustly respond to the inevitable challenges that the announcement would raise.

More importantly, it would suggest that there has to be a knock-on implication that the resources that were earmarked to help deliver support where it was most needed, as articulated in the rationale for yesterday’s announcement, will no longer be available for that deployment.

AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.