HMRC VAT Helpline failures

By   5 July 2019

If any of you have had the unfortunate necessity to use the VAT Helpline you will know the frustration, unhelpfulness and general exasperation of trying to get a reasonable response from the department. Well, it isn’t just you.

In correspondence between the Chair of the Treasury Select Committee and the Chief Executive and Permanent Secretary of HMRC here the previously highlighted issue of the deterioration of the performance of the HMRC VAT Helpline is addressed.

The extremely poor performance is ascribed, by the Chartered Institute of Taxation (CIOT) to:

  • the lack of an adequate pilot for the roll-out of Making Tax Digital (MTD) – details here
  • the pressures of Brexit on HMRC resources.

And HMRC state that:

  • their telephony performance has been impacted by ongoing recruitment and staffing shortfalls
  • recruitment for a no deal EU exit was slower than expected
  • they had to divert resources from usual business to issues with a No-Deal Brexit
  • the target of five minutes waiting time for the VAT Helpline has not been met
  • they are developing a new way of measuring performance
  • there are issues with some MTD businesses experiencing problems with paying VAT by direct debit

An annex to the letter, providing VAT call data from January to May 2019, shows

  • helpline demand increased by over 40% between January and May but the number of calls answered fell over this period
  • in May, HMRC answered less than 42% of the calls which made it beyond their recorded messages, compared to 72% in January
  • average speed of answer for those calls which were answered rose from around seven minutes in January to more than 16 minutes in May (in addition to the time spent navigating the initial recorded messages)
  • of the calls answered, the proportion which were answered within ten minutes fell from 64% in January to just 9% in May

Commentary

It is appreciated that some of the excuses are “reasonable” (to use HMRC parlance) and matters are not within HMRC’s influence, however, the service provided is, frankly, unacceptable. Businesses need HMRC assistance for all sorts of reasons and if it is not forthcoming, errors may be made resulting in potential penalties and interest, loss of income, deals failing, accounting compromised and uncertainty and complexity, VAT becoming a cost, and customers lost.

It is not as though HMRC have not been warned about pushing MTD through without adequate testing of systems and software at a time when Brexit was always going to make huge demands of the department. The House of Lords Economic Affairs Committee published  a damning report last year here which recommended delaying the introduction of MTD. Also, the CIOT has consistently warned of the risks of implementing MTD for VAT at the same time as Brexit.

Support for business and tax agents is sadly very lacking and it appears that insufficient resources have been devoted to this. There has been an overall lack of planning, combined with a political will to push ahead with MTD regardless. It really is not good enough. And we are not even yet through the implementation of MTD for VAT with larger and more complex business yet to join the fray. That, added to the fact that many glitches have already been identified, does not give any reason to be optimistic about the future for either MTD or the VAT Helpline.

As CIOT say: while HMRC have the scale to move resources within its organisation, that is a luxury that most businesses do not enjoy.