Nearly 9 in 10 entrepreneurs say poor HMRC service is causing a ‘huge roadblock’

HMRC customer service levels have fallen to such low levels that the majority of business owners say this is now impacting their business.

A survey by the Association of Chartered Certified Accountants (ACCA), shared exclusively with This is Money, shows that 89 percent of entrepreneurs say that the poor level of service from the tax authorities has a negative impact.

Only one percent said HMRC’s services had a positive impact on their business.

Despite accountants and business owners raising their concerns with HMRC, standards have only deteriorated.

The same March survey found that 66 percent of business owners said HMRC had a negative impact on their business, while in October 2023 only 52 percent said the same.

In a letter to the Chancellor ahead of the Budget, ACCA said: ‘It is difficult to overestimate the level of concern and frustration that a significant proportion of our members are experiencing in their dealings with HMRC and the impact this is having on their businesses customers. .

‘This includes significant delays by HMRC costing taxpayers, agents and HMRC time, as well as failures by HMRC in dealing with basic processing requests, such as VAT registration, to more complex areas such as dealing with research and development tax credit investigations.’

We first highlighted issues with HMRC services last year, ahead of the permanent closure of HMRC’s VAT registration helpline.

Readers spoke of their frustration at not being able to reach an HMRC agent, with some saying the delays had made them consider moving their business abroad.

An HMRC insider told us that a ‘culture of fear’ and too much micromanagement were behind the delays.

ACCA members highlighted communication as a priority, with 91 percent calling for a reduction in waiting times.

Data from accountancy firm UHY Hacker Young shows that taxpayers have spent 719 years on hold with HMRC in the past year.

The average call duration has increased by 19 percent, from 22 minutes and 41 seconds to 71 minutes and two seconds.

ACCA has stressed that the government and HMRC must do more to ‘recognise the value of time-saving and trust’ provided by HMRC’s trained agents.

It was also said that the initiative to make taxes digital is ‘overly complex’, which will have knock-on effects for small businesses and the self-employed, as well as HMRC itself.

It calls on the government to invest more in HMRC to improve customer service and deliver the ‘modern, efficient tax system we need’.

A government spokesperson said: ‘We are committed to improving customer service performance at HMRC and the Chancellor will provide more detail at the Budget.’