The HM revenue and customs are dramatically cutting the number of physical letters sent by them, which announces the plan to eliminate the most outbound posts-until it does not generate direct revenue-as part of the broad change in the first communication.
Confirmed as part of Wednesday's spending review, this move is expected to reduce the post output of HMRC by 75% by 2028–29 tax years and save £ 50 million per year.
Taxpayers will still receive letters about unpaid taxes or compliance issues, but most other correspondence including general updates and information will be transferred online.
The government said that the change was an important step towards making HMRC a “digital-first organization”, at least 90% of customer interactions to be handled online in the coming years.
Tax professionals have expressed concern that the change can separate weak customers. The spokesperson of the Chartered Institute of Taxation (CIOT), Lindsay Scott warned the change, until security measures are introduced.
“The plan to phase the post should be handled with care,” Scott said. “About seven million people in the UK still need help in navigating digital services, and they cannot be left behind.”
Despite reporting HMRC that 70% of the customer interaction is now digitally handled, many taxpayers still rely on paper. Last year alone, more than 300,000 tax returns were filed using traditional paper forms.
The move follows the widespread criticism of HMRC's previous digitization efforts. According to the National Audit Office, the making tax has been eight years back from the digital initiative schedule and has exceeded the budget to more than £ 1 billion.
Digital service
While HMRC chases its webchat and online system, industry surveys show that taxpayers are disappointed. According to the December 1 December report of Chartered Accountants in CIOT and England and Wales (ICAEW):
• HMRC's webchat service connected for less than half time
• Satisfaction with webchat was just 28%
• Satisfaction with phone services was 56%over an average waiting time of 23 minutes.
• 34% of the callers gave up before being connected – more than 15% target of the department
The new funding package also includes £ 1.6 billion in four years to overhall HMRC's core technology and data infrastructure, as well as one and £ 500 million with the aim of promoting online service performance.
Revenue pressure driving improvement
Digital changes are part of a broad push by the treasury to promote tax receipts without increasing rates. The government estimates that 7,900 new compliance and change with loan recovery employees will bring additional £ 7.5 billion in a year by 2029-30.
A spokesperson of HMRC said: “Reducing the number of letters we sent and communicating in different ways instead will provide a better service to our customers to suit modern expectations, as well as a savings of £ 50 million by 2028-29.”
However, critics say that it is suggest that the tax-generating position-like tax bill will remain unknown, while the assistant or explanatory letters are phased.
As a tax advisor said: “It seems that HMRC only wants to write when it is chasing you for money.”
With the increase in pressure to increase tax revenue when improving service, the success of HMRC's digital ambitions can depend on whether the weakest customers are placed in the loop-or just left behind.
Jamie young
Jamie is a senior reporter in Business Matters, who is bringing more than a decade experience in UK SME business reporting. Jamie holds a degree in business administration and regularly participates in industry conferences and workshops. When not reporting the latest commercial developments, Jamie has emotional about advising journalists and entrepreneurs to motivate the next generation business leaders.