Simply Business - Insurance for your business

Call Us0333 0146 683
Our opening hours
Knowledge centre

HMRC phone calls cost taxpayers £97 million last year

2-minute read

HMRC phone calls cost taxpayers £97 million last year
Anna Delves

Anna Delves

22 June 2016

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.

Taxing issues

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.

Ready to set up your cover?

As one of the UK's biggest business insurance providers, we specialise in public liability insurance and protect more trades than anybody else. Why not take a look now and build a quick, tailored quote?

Start your quote

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.


People also liked

Landlords could be targeted in new capital gains tax raid.

19 November 20202-minute read

Landlords could be targeted in new capital gains tax raid

Landlords could be hit by another massive tax raid, as the Office of Tax Simplification outlines its recommendations for an overhaul of…

Read more

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter


Popular articlesBusiness resources from FarillioGeneral businessGuestInsuranceLandlordLandlord resources from FarillioLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub


6th Floor99 Gresham StreetLondonEC2V 7NG

Sol House29 St Katherine's StreetNorthamptonNN1 2QZ

© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.