A recent report from the National Audit Office (NAO), reported in the Guardian, has found that average call waiting times at HMRC increased by more than 350% in the five years to April 2024.
During 2022/23, callers were kept on hold for the equivalent of 798 years, as they waited to have their important tax questions answered.
After years of stealth taxes, lowered thresholds, and frozen allowances – and now with a new prime minister in No 10 – you might be concerned about your own tax situation.
Thankfully, at Globe IFA, we’re on hand to help. And we won’t keep you waiting for an answer.
HMRC wait times are rising with some calls not going through at all and others being disconnected
A recent NAO report has found that the public is being “let down” but HMRC, as average call waiting times have increased by more than 350% over the last five years. Not only are callers waiting for longer, but they’re also seeing more calls terminated, and sometimes failing to get through at all.
Customer service levels, meanwhile, have been described as “far below” expected levels, with the organisation “not delivering” acceptable standards.
Callers spent a cumulative 7 million hours on hold in 2022/23 (or around 798 years). This is more than double the 3.2 million hours (or 365 years) spent waiting during 2019/20.
The figures amount to only two-thirds of callers getting through to an adviser (67%) compared to a target of 85%; those who do get through wait 23 minutes on average.
Once connected, many callers were disconnected if the query could be answered online. Not only is this frustrating after a lengthy wait but could also be alienating for older callers who are not tech-savvy or prefer speaking to a human.
Fiscal drag as a result of Conservative government tax freezes, and increasingly complex tax affairs have been blamed for increasing caller numbers.
Frozen allowances are leading to fiscal drag and increasing numbers pulled into higher tax brackets.
Back in 2021, chancellor Rishi Sunak used his Spring Budget to freeze certain tax allowances until 2026. This was in a bid to raise much-needed funds following a period of significant Covid-related borrowing. Sunak’s successor as chancellor, Jeremy Hunt, opted to extend some of these freezes until at least 2028.
These policies have led to an issue known as “fiscal drag”. As the cost of living, house prices, and wages have all increased, frozen tax thresholds have failed to keep pace. This has the effect of pulling more people into higher tax brackets.
Income Tax threshold freezes
The current freeze to the Income Tax Personal Allowance at £12,570 (and £50,270 for higher-rate taxpayers) is expected to raise £26 billion, according to Office for Budget Responsibility (OBR) figures.
As wages rise, and as the triple lock continues to increase the annual State Pension, the frozen allowance could see you enter a higher tax bracket.
At Globe IFA, we can help you manage your income tax efficiently. This might mean saving and investing through a tax wrapper like your pension or an ISA, or by helping you to manage your pension withdrawals.
Early Inheritance Tax planning is vital
Another complex area where you might be tempted to speak to HMRC – but where Globe IFA can help you without the long wait times – is estate planning.
The Inheritance Tax (IHT) nil-rate band last increased in 2009. It has remained at £325,000 ever since. The residence nil-rate band, meanwhile, has been frozen at £125,000 since 2021 and is due to remain at this level until at least 2028.
IHT is usually payable at 40% on the value of your estate that exceeds the current limits, and this could mean a hefty bill for loved ones as the value of your estate rises over the coming years.
FTAdviser reported on the effects of this freeze back in May 2024. It found that HMRC’s IHT take for April 2024 alone topped £700 million, marking an £85 million increase on the previous year. During 2023/24, the Treasury’s IHT take topped £7.5 billion, the highest annual figure on record.
It’s important to remember that estate planning isn’t something to think about only later in life. We can help you to think about your legacy early, helping to ensure you can provide your loved ones with the legacy you want, and that they won’t be left to deal with an unexpected tax ill when you die.
Get in touch
As HMRC admits that phone line standards are “still not where we want them to be”, remember that at Globe IFA, we always have a team of experts on hand to help you. Email hello@globeifa.co.uk or call us on 020 8891 0711 to discuss what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, Lasting Powers of Attorney, or will writing.
