HMRC still plans to close its helplines despite a backlash and the fact millions more people are being dragged into paying taxes.
The taxman was forced into a U-turn on closing its helplines earlier this year following pressure from the Chancellor, Jeremy Hunt, and MPs.
However, the organisation’s chief executive, Jim Harra, has told MPs that the closure of the phone lines is still ‘part of our strategy’.
More than 12 million workers must submit a self-assessment tax return each year, with around half of them calling the helpline for assistance.
At the same time, a failure to raise tax thresholds means more people, particularly pensioners are being dragged into paying tax – and some will have to start filling out tax returns.
Despite the likely increase in demand for help deciphering often complex tax issues, HMRC wants to change the way it operates to encourage people to communicate with and manage their tax affairs online.
Charlene Young, pensions and savings expert at AJ Bell, warned: “Millions more people have been dragged into paying new taxes since most allowances have been frozen or even cut in recent years. But now the taxman has admitted they are feeling the pinch too.
“HMRC leaders faced a grilling from the Treasury Select Committee on Wednesday afternoon, being summoned to explain the reasons behind their poor service performance and the announcement to close HMRC helplines on March 19 that was subject to a ‘screeching U-turn’ the very next day.”
She said while the HMRC appears to have slowed the pace of the switchover, the organisation has doubled down on its online and digital first approach.
Ms Young said: “HMRC has seen a huge increase in its customers base – with officials admitting that frozen tax thresholds and allowances are the factors most to blame.
“The Office for Budget Responsibility forecasts millions of new taxpayers due to the ongoing freeze on income tax thresholds, with HMRC expected to deal with them without any increases to budgets.”
The HMRC has blamed cuts to its budgets with a resulting reduction of around 5,000 staff for a need to change the way it operates.
She said the combination of budget and staff cuts with increasing demand had left HMRC in a “catch-22 situation”.
Young said: “Even if HMRC does manage to get its hands on more helpline staff, they need time to be trained up and deployed before they can speak to customers and alleviate some of the helpline pressure.”
