HMRC has released a series of reports analysing its performance in 2023/24, including the annual report and accounts, and a performance report against the charter.
Tax Revenues Highest on Record
The annual report for 2023-24 reveals that total tax revenues reached a record £843.4 billion, marking a 3.6% increase from the previous year. This rise is attributed to the freezing of income tax bands and thresholds and the increased corporation tax rate.
In 2023-24, the cost of running HMRC was £7.2 billion.
Tax debt saw a slight reduction both in absolute terms and as a proportion of revenue, standing at £43 billion as of 31 March 2024—down by £0.9 billion compared to 31 March 2023. However, this figure remains significantly higher than pre-pandemic levels.
HMRC’s estimate of uncollectible taxes has continued to rise. As of March 2024, it is estimated that 45.4% (£27.6 billion) of taxes due but not yet paid may not be collected, up from 32% (£19.2 billion) the previous year.
Underperformance Across Key Areas
In addition to the annual report, HMRC has provided performance statistics and commentary for 2023/24. The reports reveal several key targets have been missed, with a significant increase in call waiting times.
Among the five key targets, only the compliance yield was met. Metrics such as average speed of answer and callers waiting for more than 10 minutes are no longer prioritised, leading to significant deterioration. The average call waiting time has reached 26 minutes, with nearly 75% of callers waiting over 10 minutes.
| KPI | Jan to Mar 2024 | Apr 2023 to Mar 2024 | Apr 2022 to Mar 2023 | Target |
|---|---|---|---|---|
| Customer Satisfaction | 78% | 79% | 79% | 80% |
| Customer correspondence cleared within 15 working days | 79% | 76% | 73% | 80% |
| Customer correspondence cleared within 40 working days | 92% | 89% | 89% | None |
| Net easy score | +59 | +59 | +60 | +70 |
| Telephones: adviser attempts handled | 63% | 66% | 71% | 85% |
| Telephones: average speed of answer | 26 minutes | 23 minutes | 16 minutes | None |
| Telephones: callers waiting for more than 10 minutes | 74% | 71% | 63% | None |
| Compliance yield | £41.8bn | £34.0bn | £40.5bn |
The publications, including the National Audit Office section of the annual report, acknowledge the difficulties faced by individual taxpayers, agents, and small businesses, particularly in accessing helplines. The reduction in HMRC’s budgets and the increasing demand are highlighted. An additional 2.1 million people were brought into income tax due to frozen income tax thresholds in 2023/24, many of whom have more complex tax affairs.
Digital Services and Debt Levels
Despite challenges, HMRC has made progress in delivering new digital services. The HMRC app attracted nearly two million new users, with almost four million unique users overall. Currently, 69% of interactions with HMRC occur online.
As of March 2024, HMRC’s debt stood at £44.6 billion, with £7.1 billion in time-to-pay arrangements and £37.5 billion available for collection. Approximately 900,000 taxpayers have time-to-pay arrangements. These debt levels, while stable since their peak during the pandemic, remain historically high.
Charter Performance
HMRC’s charter outlines the standards of service expected by taxpayers and agents. The 2023 charter report includes results from HMRC-commissioned research, showing a decline in positive ratings from agents, individuals, and small businesses regarding their interactions with HMRC. In 2023, 37% of agents gave a positive rating, down from 45% in 2022. Ratings for mid-sized and large businesses remained relatively stable.
The Charter Stakeholder Group’s survey, which gathered 1,647 responses mainly from agents, asked respondents to rate HMRC’s performance against charter standards on a scale of 1 to 10. The three lowest average scores were for:
a. Being responsive: 2.4
b. Making things easy: 2.8
c. Getting things right: 3.5
Feedback indicated that straightforward issues are often handled well, but more complex issues are challenging to resolve.
Higher scores were noted for the remaining charter standards, such as recognising representation (5.7) and keeping data secure (6.8).
HMRC’s 2023/2024 annual report can be viewed here.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services Limited - a Marketing & Content Agency for the Professional Services Sector.
