Having arrived back from Washington overnight I am now heading, a little bleary eyed, to Brighton to speak at the PCS Union conference. PCs does, of course, represent 80% of HMRC staff.
In the circumstances this new report from the National Audit Office this morning does seem relevant:
HMRC's digital strategy aims to improve the efficiency and quality of its customer services by moving more personal taxpayers online thereby reducing demand for more costly to handle telephone and postal contact. HMRC, through substantial staff reductions, decreased the cost of its personal tax operations between 2010-11 and 2014-15 by £257 million. Today's National Audit Office report finds that while HMRC maintained or improved customer service up to 2013-14 it then misjudged the cumulative impact of its complex transition and released too many customer service staff before completing service changes.
The NAO found that the quality of service provided by HMRC for personal taxpayers collapsed in 2014-15 and the first seven months of 2015-16 when average call waiting times tripled. Services have subsequently improved following the recruitment of additional staff but whether this performance is sustainable depends on HMRC achieving successful outcomes from its programme to make tax digital.
A few thoughts, inevitably, follow.
First, I cannot now recall for how many years PCS and I have predicted this.
Second, candidly thus confirms the incompetence at senior management level that we have long suggested exists at HMRC because of a dedication to cost cutting whatever the consequence.
Third, I do not share the view that the digitisation process will work at all. It assumes homogenous people. That's precisely what people are not.
Fourth, if this exercise failed just imagine the chaos in a few years when almost every HMRC office closes to relocate to a few regional hubs. A collapse in revenues is likely.
And last, this exercise did not save cost, it transferred cost and stress onto the taxpayer, which is unacceptable.
My message is unambiguous.
Stop the office closures.
Stop the redundancies.
Make digital services optional.
Provide the support people need.
Make paying tax possible.
Do it now.
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Regarding the subject of digitisation.
At the moment digital channels are best suited for handling minor customer issues that don’t need human or agent involvement. Many organizations are able to resolve a large number of simple customer issues via digital and self-service channels, reducing costs and taking the load off their customer service agents. Most sensible organizations attempt to use a mix of digital and assisted/human channels. They use digital channels to resolve simple/minor customer issues and assisted/human channels to resolve complex issues. It would appear that HMRC have not got the balance right or have overestimated the % of issues that can be resolved via digital channels. Compared with many other organizations HMRC is unique in that a large proportion of their customer issues likely to be quite complex, personal in nature and thus require alot of assisted/human support.
Across all organizations digital customer engagement channels today work best when deployed alongside traditional service channels such as voice. However when deploying digital channels organizations must ensure that when a customer is in a digital channel they can easily transition or escalate to a human assisted channel if they are having problems. HMRC cannot however ignore digital channels as they need to respond to the customer engagement needs of a new generation of customers who will typically think digital first when they wish to engage with an organization.
You are right in what you say, as far as it goes.
What you’re missing is that it’s exceptionally difficult to build a website or app that supports simple customer support tasks ‘inline’ and promotes more complex tasks to a team of trained advisers.
I know of no public-facing website that succeeds in this, and I have only encountered a handful of large companies with internal support and procurement web apps that do.
Bluntly: the vast majority of support websites do not even manage simple tasks well. Few of them manage well-defined and easy-to-automate tasks well enough to be described as ‘awful’.
I could inject some cynicism about Government IT but the private sector is generally worse in it’s internal and external web user experience for support-and-enquiry tasks; and, until recently, HMRC had the best telephone support anywhere, at any scale larger than a single-digit expert operator base, for dealing with complex queries routinely requiring a ‘promotion’ pathway, rather than a single-line support team with a checklist and occasional second-line support.
That’s the implementation issue missing from your answer.
The elephant in the room – present but unacknowledged, or discussed in terms of missing cheese and mousetraps instead of trample damage and the pressing need for men with shovels – is: incentives.
Destroying the user-facing service capabilities of your income centre is stupid; and, as the first response to stupid actions from clever people is to look for an agenda, I will point out the the majority of service automation projects in the private sector have been driven by a toxic mixture of perverse incentives – cut costs, get a bonus, get promoted, move on before you’re held to account for the damage – and corrupt procurement relationships with external service providers.
That’s the private sector for you.
The Public Sector has a problem of a different order: a strategic policy direction towards running down the public service to facilitate its sell-off to the private sector, coupled with individual career incentives in the mixed public-private ‘solution partnership’ environment.
There is no technical fix for that, nor is there an administrative solution: this is a matter of policy and law, and political will.
I’m afraid you are wrong. Many web pages today offer pop up web chat that can be automatically or manually triggered when a customer has problem on a web page. BT, Currys, Sky all do this. Many organisations today switch or transition customers from social media to web chat. There is plenty of best practice across industry for escalating customer problems. Netflix for example lets me do an IP or web call directly from the app when I get in to problems.
The issue as ever comes to money. Many organisations still see customer service as a cost center (and look to reduce costs) rather than an opportunity to add value.
The relationship between fridges and tax is similar to that betwen roller skates and a Porsche
The HMRC bust a gut to track and claim around £50 billion of tax that’d be “avoided” by corporates.
The corporates appealed to the EU and the ECJ overruled the HMRC.
That money is now not being spent on schools, hospitals, homes, public sector pay or infrastructure, it’s being paid back to the corporations. £8 billion already paid, £8 billion on its way and potentially another £34 billion to follow.
Given that these figures are huge, given that chasing corporate tax is supposedly the primary concern of John McDonnell and given that the powerless of the HMRC, even when they do track down and claim tens of billions in avoided/unpaid corporate tax, the EU says, Nah, give it back, given all of this, how can you possibly support the Remain campaign?
And thats before we get into Goldman Sachs, the IMF etc
If this money is due it is due
If we got the law wrong that was our mistake
And it would be due Brexit or not
In your expert opinion, did the HMRC get the law wrong?
No
I think HMRC have correctly interpreted the government’s wishes
I entirely accept that it would be wise for the government to clarify the law
I would, in that case, allow a charity to trade, through a subsidiary if it wished, and wholly sweep away gift aid to replace it with a simple turnover subsidy for charities
But whilst this is done HMRC is following the wishes of those in parliament
Sorry for the extra post, just to add – no, it wouldn’t. Because who would overrule the HMRC in the event of Brexit?
We could even end appeals here too, like the ECJ, giving the HMRC free reign. Unaccountable courts, good idea?
Unaccountable courts are the basis of democracy
Who (should) appoint(s) the unaccountable?
We have an arrangement
It needs broadening
But a judicial appointment panel independent of government, but subject to anough review to prevent corruption, has to be right
What’s the ECJ case? I’d like to read their reasoning.
It’s barely covered in the UK MSM. “ECJ overrules HMRC” as a search is a starting point.
I encourage to find things themselves, as this is inevitably what they do anyway to counter any potential bias from strangers on the internet…
One wonders if individuals, sole traders or small companies have redress to the ECJ too.
They do
Sorry, as an aside, albeit an overarching point, all multi-tier international legal frameworks do is favour those with the most money. Even if ‘the state’ (HMRC in this case) do win, the costs are immense. Not due to having to pay for the other side too, as in a criminal trial, but simply spending years and tens of thousands of state funded man-hours, to attempt to hold onto what they’d already got. There is no access to these mechanisms for poor, or even average private individuals, sole traders, small businesses or even medium sized ones. It’s basically corporates v states and a lose-lose for 99% of the population. That’s the EU.
I accept your first point
But that is true of all law
Yes, but, in this case, the point is that an unnecessary second tier exists.
We’d all like to expand our own professional interests and window dress it as a quest for justice.
The reality is less accountability, not dissimilar to the political structure – my local councillor lives around the corner, i can knock on his door. My local MP has an office 2 miles away, he does twice-weekly surgeries, my MEP, I could email him I suppose (but even the nicest people don’t always answer…) but as for the the Cabinet, or a European Commissioner, it’s just not happening. This accountability paradox (those with the least power are the most accountable) is bad enough in politics, without having to create and maintain a system of ‘justice’ that mirrors it.
It’s not for the plebs. Although it’s the plebs who pay for it.
Tax is complicated, and digitising it as is will not work. But the answer will, I guess, be to go towards a flat tax system, rather than going backwards.
I’m somewhat split on this: on the one hand I recognise your evidenced arguments that flat tax promotes inequality. On the other, I’ve also seen the evidence of the Estonian way of operating, which makes tax return completion a matter of a few clicks, and flat tax or no it ensures levels of compliance HMRC can only dream of.
There is no way on earth flat tax could be simple
Please tell me how this simplifies defining income?
Even if a flat tax were simple – yet to be proven I think – it would still be regressive.
Simplicity is all very well but fairness, even if complicated, is what civilised people aim for.
I might be being a bit naïve here but why would flat taxes be a good idea with such inequality in society at the moment?
The Estonian flat tax rate according to Wikipedia is 21%. Prima facie, 21% to a top earner is obviously different to a lower or lowest earner.
If you wished to mitigate this, then other systems/processes would have to be created and that is where complexity comes in.
Also, is it not he case that countries have dropped flat taxes and moved to progressive ones? Flat tax is no panacea.
See blog this morning posted to answer some of these issues and admittedly based on one nealry a decade old now