Tax can be a nightmare - none know that more than the self-employed - but beyond being a nuisance, a watchdog has found that calling HMRC cost taxpayers an incredible £97 million last year.
A new online strategy alongside poorly timed staff cuts lead to what the National Audit Office (NAO) has termed a “collapse in service quality” and a spike in costs.
Breakdown of costs
The figure of £97 million doesn’t just come from the cost of hanging on the line or the amount of time it took to resolve taxpayer queries.
What’s also considered is the the potential loss of revenue for business owners kept on hold when they could be attending to business.
Using HMRC’s own criteria, NAO calculated the average value of people’s time to be £17 per hour and came to the conclusion that £66 million alone was lost while taxpayers were on hold.
An additional £21 million was lost while actually on the phone to HMRC agents, and the remaining £10 million was how much all this wasting cost in call time.
How this happened
The issues came after efforts to reduce call costs and waiting times backfired.
In 2013 HMRC began rolling out a contactless service, including online self assessment. Between 2010 and 2014 they cut 11,000 call handling staff, assuming they would not be needed after the introduction of the new paperless system.
The layoffs, however, were severely mistimed. With too few staff on the ground, HMRC only met its target to handle 80% of all calls 10 weeks out of the whole year.
HMRC says that things have improved recently. For the past six months the average call waiting time has been six minutes, according to a spokesperson.
However, there may still be repercussions for those who had difficulty with the service during the last tax year. The NAO voiced its concerns that, as people were unable to get through on the phone, they may have paid the wrong level of tax.
There’s also the fact that when HMRC realised they needed more people staffing the tax helpline, they transferred back-office staff who had been working on PAYE tax records. The number of outstanding discrepancies in tax records then rose from 2.4 million to 4.6 million.
The self-employed would be wise, therefore, to double check their records - especially given some of the HMRC mishaps that we’ve seen in the past.
Have you had a problem getting through to HMRC? And how has your overall experience been in the past? Let us know in the comments.