HMRC fails to answer hundreds of thousands of tax credit calls

System could collapse by next spring, say critics, as HMRC website reveals shocking tally of unanswered and terminated calls

Hundreds of thousands of people who ring HM Revenue & Customs (HMRC) every month to discuss their tax credits are abandoning calls in despair because they are often kept waiting in queues for at least 15 minutes, according to official government figures.

A shocking tally of unanswered and terminated calls is revealed in performance updates on HMRC’s website, which show that customer service teams dealing with queries cannot cope with the volume of inquiries.

Critics of HMRC’s performance say that if the failings are so evident now, the system will be overwhelmed next spring, when billions of pounds of cuts to tax credits, planned by the chancellor, George Osborne, come into force.

Latest HMRC data shows that in March this year staff dealt with just 68.3% of 1,433,235 calls about tax credits, compared with 98.3% of the 1,124,860 calls made on the same subject in March last year. Even more startling is that 277,799 of the calls this year were abandoned, compared with 12,250 in March 2014.

In January this year, the average waiting time was 16 minutes and 49 seconds, compared with four minutes and four seconds in April last year.

The average time before people abandoned a call in January this year was 13 minutes and 59 seconds.

Concern among the public over how tax credit reductions will hit their budgets was vividly demonstrated by a single mother on BBC1’s Question Time last month.

Folliwng a humiliating defeat in the House of Lords, Osborne has been forced to think again about the levels at which the cuts will be imposed on the poorest families – but millions of families will still be hit by sharp falls in income.

On Saturday, an HMRC spokesman admitted the department had fallen short of acceptable levels of customer service.

He said: “We have recognised that our customer service has not been good enough, and have taken major steps to improve by recruiting 3,000 new staff … and introducing online services that give customers new ways to deal with HMRC at any time.

“Of the 2.5 million people renewing tax credits this year, more than 750,000 did so online, and our new webchat service has helped more than 100,000 customers so far, with 86% satisfaction rates.”

Government sources say that while some calls to HMRC would be free of charge, others would be chargeable. This would depend on on the service provider and whether the calls were made from a landline or a mobile.

Last week, the cross-party parliamentary public accounts committee issued a highly critical report about performance throughout HMRC. The committee said it was not doing enough to track aggressive tax avoidance and tore into its customer service record.

It recalled a previous report in which the committee attacked the “abysmal record on customer service”, having only answered 74% of telephone calls received by its contact centres during 2011-12.

“In 2014-15, HMRC responded to just 72.5% of calls and over the first half of 2015 this had fallen to 50%,” said the committee.

Seema Malhotra, the shadow chief secretary to the Treasury, said: “These are worrying figures which suggest HMRC will be under massive pressure to deal with the administrative impact of the Tories’ tax credit cuts.

“The only way David Cameron and George Osborne can properly fix this problem is to reverse completely their planned tax credit cuts. Anything short of this will be letting down the working people of Britain.”

Labour says the number of people calling the helpline could more than double compared with April this year if all 3.3 million families affected by cuts to tax credits call HMRC before they come into force in April 2016.

Families affected by the cuts are set to get letters informing them of the impact on their finances before Christmas.