HMRC service levels and compliance activity hit by Covid
Latest HMRC performance figures lay out the impact of Covid-19 during a unique financial year, resulting in ‘abnormally’ high debt levels, a sharp drop in tax receipts and a decline in customer service
An update on how the department has performed during the first three quarters of tax year 2020/21 indicate HMRC is currently holding £65bn of debt, around £45bn more than this time last year, while it estimates the debt balance at the end of March will be between £54bn and £70bn.
HMRC acknowledged that debt levels are ‘abnormally high’, but stated: ‘In these unprecedented circumstances, HMRC is rightly prioritising support for customers in urgent need, taking a sympathetic approach to those struggling to pay their tax or file their returns.’
By the end of December, HMRC had collected £394bn in tax, compared to £457bn at the same point in 2019.
The quarterly performance figures also show that HMRC’s customer support phone lines have been under strain throughout the pandemic, with high level customer demand and significantly longer waiting times.