Taxpayers on hold to HMRC cost £97m, NAO says

According to the National Audit Office (NAO), taxpayers which are forced to hold the line while calling HM Revenue and Customs (HMRC) lost the equivalent of £97 million in 2015.

The spending watchdog has said that the quality of service at HMRC had ‘collapsed’ over an 18 month period between 2014-15, with call waiting times tripling.

The NAO worked out how much money callers would have lost nationally while waiting for a reply. The research involved valuing people’s time at £17 per hour. The findings claimed that callers had wasted £66 million while waiting on the phone; £21 million while actually talking to HMRC; and £10 million on the cost of the call.

The NAO claimed that HMRC’s poor performance was most likely due to its decision to cut 11,000 staff between 2010 and 2014. Furthermore, as part of the service’s strategy to persuade people to complete their tax returns online, it had anticipated needing fewer employees to answer the phone.

Amyas Morse, head of the National Audit Office, said: "This does not change the fact that they got their timing badly wrong in 2014, letting significant numbers of call handling staff go before their new approach was working reliably”

However, HMRC has argued that its service had improved since early 2015.

Ruth Owen, HMRC's director general for customer services, said: We recognise that early in 2015 we didn't provide the standard of service that people are entitled to expect and we apologised at the time. We have since fully recovered and are now offering our best service levels in years.”

MPs on the Public Accounts Committee will take further evidence on the issue on 13 June.