2 days ago
HMRC can't be bothered to send letters (unless you owe it money)
HM Revenue & Customs will stop sending physical letters to taxpayers in the latest move to 'modernise' and save £50 million a year.
The tax office confirmed it would 'eliminate' outbound post unless it is revenue generating, cutting the number of letters it sends by 75 per cent by the 2028-29 tax year.
The government promised an extra £500 million in funding over the next four years in Wednesday's spending review, with the aim of pushing at least 90 per cent of customer interactions online and making HMRC a 'digital-first organisation'.
Lindsay Scott from the Chartered Institute of Taxation (CIOT), a trade body, said withdrawing physical letters prematurely 'risks further damaging customer service'.
'Plans to phase out post must be handled with care, with robust safeguards to protect those who are digitally excluded or lack digital confidence,' Scott said.
This year, 70 per cent of the tax office's interactions with taxpayers were 'digital self-serve', but HMRC estimates that about a fifth of its customers, or seven million people, still need assistance to use its digital services. Last year, more than 300,000 filed their tax returns on paper.
The department's previous attempts to digitise have also been widely criticised. Its Making Tax Digital initiative has cost at least £1 billion more in real terms than its initial £226 million budget when it was proposed in 2016, according to the National Audit Office, which scrutinises government spending. In 2023, it said the rollout for self-assessment tax returns was at least eight years behind schedule.
The tax office has also come under fire for its track record with customer communications. Its webchat service, launched in 2015, connected less than half of the time, according to a report by the CIOT and the Institute of Chartered Accountants in England and Wales, a trade body, published in December.
The report also showed taxpayers were satisfied with webchats 28 per cent of the time and the phonelines 56 per cent of the time, although HMRC's own satisfaction estimates are much higher.
On the phone lines, callers spent an average of 23 minutes on hold in the last tax year and 34 per cent of callers gave up before they were connected in 2023 — more than double the target of 15 per cent or less.
The investment announced on Wednesday comes as part of a wider push to revitalise the tax office, with an additional £1.6 billion in spending over the next four years also confirmed for reforming its technology and data infrastructure.
The full spending package aims to raise £7.5 billion additional tax revenue a year by 2029-30, by digitising services and hiring an extra 7,900 staff to work on compliance and debt management. The government said it will use the extra revenue to 'fund vital public services'.
HMRC said: 'Reducing the number of letters we send and communicating in different ways instead will provide a better service for our customers in line with modern-day expectations, as well as deliver savings of £50 million by 2028-29.'
