Making Tax Digital could lead to “catastrophic collapse” in customer service, say MPs

MPs from the Public Accounts Committee (PAC) have voiced concerns that the “looming threat” of Making Tax Digital (MTD) will result in a “catastrophic collapse” in customer service at HM Revenue & Customs (HMRC).

The committee has said that it is “not convinced” of HMRC’s customer service strategy following the full implementation of MTD.

It said that tax officials are highly likely to experience a customer service collapse akin to that of 2015/16, when the Revenue’s decision to reduce its workforce by 5,600 left hundreds of thousands of taxpayers waiting in telephone call queues for several hours.

Committee chair, Meg Hillier, said: “The lack of a convincing fall-back plan to safeguard service as HMRC undergoes significant change remains a looming threat to its ability to collect tax from individuals simply trying to pay their fair share.

“HMRC’s senior management cannot afford to be complacent about the catastrophic collapse in customer services in 2014/15 and the first half of 2015/16 – nor about what is at stake should their projections about demand for call centres prove wrong.

“Contingency planning should not be an optional extra,” she said.

The PAC insisted that, by the spring, it would “expect to see evidence that HMRC has agreed measures with the Treasury to ensure it is not left playing catch-up at taxpayers’ expense”.

The Committee are the latest in a long line of people to criticise the Revenue’s controversial digital overhaul of the tax system, which many, such as the Federation of Small Businesses (FSB) and the Association of Taxation Technicians (ATT), have suggested is overly ambitious and should be delayed.