Two thirds of accountants say poor HMRC service is hurting small businesses

Two thirds of accountants say poor HMRC service is having a negative impact on business, with smaller firms feeling the largest impact.

There has been a 14 per cent increase in negative opinion towards HMRC compared to October, according to the poll exclusively given to This is Money by the Association of Chartered Certified Accountants.

ACCA said HMRC is struggling to fulfil ‘simple requests’ such as supplying VAT numbers, which it claims is causing the efficiency and productivity of small businesses to suffer.

This is Money has received numerous cases of problems getting a VAT number – including one infuriated business owner who was waiting for more than three months. 

The lack of investment into HMRC has worsened this problem, ACCA said, with the recent Budget having proven disappointing for business owners.

HMRC has been plagued with delays since the pandemic, having cut its customer service workforce from 25,000 to 19,500 over five years. 

The association reported that 69 per cent of accountants said the Budget will bring ‘either no change or negative impact to the UK financial outlook,’ with one respondent describing the Chancellor’s budget as ‘Labour baiting’.

Glenn Collins, head of strategic and technical engagement at ACCA, said: ‘Repeatedly we hear from our members of delays around basic requests such as VAT registration numbers, and a severe lack of skilled staff to handle more complex enquiries.

‘This most recent survey reiterates our previous feedback to the Chancellor and HMRC, and shows that in the space of six months service levels have declined even more.’

He added: ‘ACCA will continue to call for the Chancellor to properly fund HMRC, raise the levels of service standards, and to lean on accredited finance professionals wherever possible to ensure accuracy across the board.’ 

The ACCA poll was of 304 undertaken in 12 days after the Budget on 6 March.  

U-turn on HRMC helpline closure 

The data follows news on Tuesday that HMRC plans to cut its helpline services on 8 April, until September, instead directing taxpayers to its online services and chatbots.

The tax office has today backtracked on the policy, stating: ‘the changes to the Self-Assessment, VAT and PAYE helplines that were announced will be halted while HMRC engages with stakeholders about how to ensure all taxpayers’ needs are met.’ 

It said it is  committed to shifting customers to online services ‘in the longer term’.

A spokesperson for the Treasury Committee said: ‘We welcome the decision to reverse yesterday’s ill-advised announcement. 

‘While we do not oppose expansion of digital services for those who want to use them, we remain entirely unconvinced that HMRC is adequately prepared to impose such a significant change in how it serves taxpayers.’

‘Planned changes to the operation of HMRC’s phonelines have been mismanaged from the beginning. 

‘Questions still remain over the extent to which the department are prioritising its own needs over those of law-abiding and vulnerable taxpayers.’