HMRC in Crisis: Taxpayers Face Hours on Hold and Penalties as Customer Service Collapses

HMRC's Customer Service Crisis Hits Taxpayers Hard

HMRC is failing taxpayers in their hour of need as its customer service suffers ahead of the self-assessment deadline. More than 12 million are expected to submit a tax return this year, but as of Jan 5, 5.65 million had yet to file. They face penalties of £100 or more if they fail to do so by Jan 31.

The Struggle to Reach a Real Human Being

Taxpayers ringing HMRC for help in the run-up to the deadline face an uphill battle speaking to a real human being. Workers described getting through to the tax authority as “pot luck”, while others said waiting on hold had become part of their working day, and being disconnected had become standard practice.

When The Telegraph rang the helpline, HMRC said the average wait time was 30 minutes. However, some callers complained that they were left in the queue for up to an hour, while others got through only to have HMRC hang up on them mid-call.

HMRC automatically cuts off taxpayers who have been waiting on the phone for 70 minutes. The tax office hung up on 55,922 callers in 2023-24, according to the latest figures.

One social media user posted on HMRC’s X account: “I have tried everything to contact you and speak to a human. It’s impossible and frustrating.”

Ilyas Patel, an accountant based in Preston, said HMRC’s hold music had become the soundtrack to his working day.

“It is now entirely normal for our team to spend 45 to 60 minutes on hold before speaking to someone at HMRC. On several occasions the call has simply dropped after an hour, forcing us to start again.”

Funding and Staffing Issues

HMRC claims improving customer service is a key priority. The tax office received £51m in extra funding from the Government in 2024 after its service levels fell to an all-time low. This enabled HMRC to recruit more helpline staff, yet taxpayers are still struggling to speak to a real human being at the tax office.

According to official figures, HMRC missed more than two million calls between April and November last year because it was too busy to pick up or because the caller gave up.

Despite this, the tax office said its customer service performance was improving. It handled 84% of calls in the first eight months of 2025-26, closing in on its target of 85%, and brought down average waiting times from 18 minutes in 2024-25 to 13 minutes. This is still double the length of time it took to ring HMRC before the pandemic, when callers could expect an answer in six and a half minutes.

Mr Patel blamed the tax office’s poor customer service on a lack of manpower. “What’s letting the system down is not attitude, but capacity. There are simply not enough people manning the phones for the volume of queries that need resolving.”

The number of frontline customer service staff working in personal tax in HMRC fell by 4% between 2019-20 and 2023-24, according to the National Audit Office (NAO).

The rise in pensioners paying tax on their income because of frozen thresholds has put pressure on the phone lines, Sir Jim Harra, former chief executive of HMRC, told the Public Accounts Committee (PAC) in 2024. He told the group of MPs: “That is one of the reasons why our customer service levels have been below where we want them to be.”

Push Towards Digital Channels

Last year the PAC accused HMRC of deliberately degrading its helplines to drive taxpayers towards its digital channels.

The tax office said the claim was baseless. However, it is aiming for 90% of all interactions to be digital by 2029-30, up from 80% today, and has received £500m from the Government to meet this goal.

John Hood, of accountancy firm Moore Kingston Smith, said: “It is pot luck as to whether you will get to speak to someone or get cut off after 45 minutes. It is clear that the push towards Making Tax Digital is moving the goalposts towards digital interactions, so we may not see an improvement on the current state of affairs.”

As part of its mission to become a digital-first organisation, HMRC is rolling out Making Tax Digital in April. This will require landlords and the self-employed to submit digital quarterly updates in addition to the yearly tax return. The system will initially affect those with a qualifying income of £50,000 or more.

Customer satisfaction with the helpline is just 56% compared to 72% and 83% respectively for webchat and other digital services in the year to date.

HMRC has previously defended the shift in resources by arguing that two thirds of the calls it receives are about issues that could be resolved through its digital services.

But not all queries can be answered online, Mr Patel said. “I understand that HMRC is pushing its online services to cut the strain on the phone service, but there are services we need daily that aren’t on the website, such as setting up payroll, enquiries on client tax codes and, pivotally, refunds for our clients.”

Delays and Penalties

Taxpayers may call the helpline because their issue is unique, complicated or because they have waited an inordinate length of time for a response to a letter.

According to its own service levels checker, HMRC is still processing letters about pension tax refunds sent in February 2025. Someone who wrote to the tax office at the start of this year about this issue could expect to hear back just before Christmas, it said.

Mr Patel said he had known the tax office to take more than six months to respond to letters that demanded a response in 14 days.

Alan Robertson, 81, from West Sussex, said he had been struggling to get through to a real person at HMRC to query his 2024-25 tax calculation, and that contacting them via post was no better.

“The long delays by telephone are unacceptable and after a long wait you are connected to a person who can only deal with very basic tax matters,” he said. “Instead of transferring the call to someone who can answer the query, they simply tell you to write a letter. This is of little use when my own experience shows that there is a huge delay in answering letters, and some seem to be ignored entirely.”

In some cases the taxpayer may be calling because HMRC itself has made an error. The Telegraph heard of one taxpayer whose tax code changed after they opted out of self-assessment.

HMRC itself estimated that 72% of its calls were the result of its own errors or taxpayers chasing for updates in 2023-24.

Long delays not only cause stress, they can also hit taxpayers’ pockets. HMRC imposes penalties on those who make mistakes on their tax bills or file late. Penalties start at £100 for missing the deadline, with interest also charged on unpaid tax at four percentage points above the Bank Rate – an eye-watering interest rate of 7.75%.

The number of taxpayers filing for self-assessment for the first time has leapt in recent years because of the freeze on tax thresholds, which was extended until 2031 following the last Budget.

The nation’s rising tax burden means more workers and pensioners are forced to interact with an increasingly complex tax system. This in turn drives up costs for HMRC. A report by the NAO found last year that our complicated tax system contributed to a £563m increase in HMRC’s costs between 2019-20 and 2023-24.

Andrew Griffith, the shadow business secretary, said: “Far too many people are waiting far too long to access HMRC services.

“At a time when family finances and businesses are being attacked by this tax-raising Labour Government, HMRC must urgently improve its interaction with customers.”

A spokesman for HMRC said: “We are successfully answering hundreds of thousands of calls from self-assessment customers this month and overall wait times are down almost 30% on last year.

“More customers using our online services to resolve their queries faster means our phoneline advisers can focus on supporting those who need extra help, delivering a better service across all our channels.”