Money-saving plans at HMRC could lead to another ‘disastrous decline’ in customer service, MPs warn

MONEY-SAVING plans at HM Revenue & Customs risk a repeat of the "catastrophic collapse" in customer service last year, a parliamentary report has warned.

The House of Commons Public Accounts Committee previously highlighted problems when taxpayers were left waiting for a combined total of four million hours for phone calls to be answered following a 5,600 reduction in staff numbers.

In a new report, the cross-party committee warned it was "not convinced" that the tax authority has a credible plan to prevent a similar "disastrous decline" in service levels in the upcoming period.

It faces further spending cuts, business restructuring, a new IT contract and the relocation of most of its staff, while dealing with the implications of Brexit.

As part of a plan to become "one of the most digitally advanced tax administrations in the world", HMRC aims to save £98 million by 2021 by cutting the number of customer service staff by one-third and encouraging more people to sort out their personal tax affairs online.

But the committee warned that HMRC is "staking a great deal" on the readiness of taxpayers to switch to digital, and "lacks an adequate plan" to cope if demand at its call centres does not reduce as quickly as hoped.

After the previous wave of job cuts, HMRC was forced to recruit 2,400 extra staff to restore stability, and the report voiced "concern" that no contingency plan has yet been agreed for the possibility of this being necessary again.

PAC chair Meg Hillier said it was "disconcerting" that concerns were being raised about HMRC customer service so soon after the previous problems.

"The lack of a convincing fallback plan to safeguard service as HMRC undergoes significant change remains a looming threat to its ability to collect tax from individuals simply trying to pay their fair share," said the Labour MP.