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We can get ready occasions down to five minutes, says new HMRC contractor

Being on hold in a telephone queue might be one of the most frustrating elements of modern life.

While the sophistication of artificial intelligence has grown rapidly, some of us still spend hours waiting on the phone. 

For anyone trying to get answers on their tax affairs, it is even more frustrating.

A recent National Audit Office (NAO) report found that customers spent nearly 800 years on hold waiting to speak to HMRC in a single tax period.

Netcompany CEO Andre Rogaczewski thinks HMRC needs to go further with its digitisation

Netcompany CEO Andre Rogaczewski thinks HMRC needs to go further with its digitisation

It hopes to push people online, but increasingly complicated tax affairs means more people are left waiting.

Now it has penned a contract with digital company Netcompany to improve its customer services division.

We spoke exclusively to Netcompany chief executive Andre Rogaczewski about what he thinks HMRC’s biggest issues are and what a fully digital tax office might look like.

‘We can get waiting times down to 5 minutes’

Andre Rogaczewski has significant experience in dealing with tax offices across Europe. 

His firm, Netcompany, recently joined Accenture, Capgemini and IBM in securing a contract with HMRC to help digitise its customer services division.

The deal could not come at a better time for the tax office, which has come under fire for its worsening customer service capabilities.

The average waiting time increased from 11:24 minutes to 13:48 minutes between 2019/2020 and 2022/23. 

In the first 11 months of 2023/24, customers waited on average, 23 minutes on hold. It will be a big task for Rogaczewski and his team to overhaul the system.

‘It’s difficult to talk about the exact situation at HMRC… [but] if you have digital services that people are not using, as of yet, and physical services like call centres, which are experiencing more people calling in… you will have problems.

‘Can we get back to a situation where it comes down to five minutes? 

‘The answer is of course you can and isn’t that something we all should aim for, and something citizens will expect in the future? 

‘I think it’s doable and possible, but also it requires you to balance these things’.

It is this balance that HMRC seems to struggle with. Currently, the system is a mishmash of basic online services and long waiting times to speak to an adviser.

It is understandable, though. While it might be easy to speak to a chatbot for fairly trivial matters, when it comes to tax people want to get it right the first time.

Rogaczewski concedes that ‘we have a tendency to want to talk to a physical human being.’ 

He adds: ‘It takes time to get a state of mind or maturity level where the citizen feels secure and safe, and tax authorities have all the capabilities online needed to answer it well.’

He points to his native Denmark as an example, where most citizens are comfortable using online service.

‘Of course there are complex cases but for 95 per cent, they feel happy with the online service. It took some years to create both the capabilities and the trust.’

HMRC ‘not alone’ in its challenges

While Denmark might be a success story, Rogaczewski stresses that where HMRC finds itself is not unique.

‘We work with tax and customs across Europe and most countries have the same challenges… 

‘Most countries have the ambition to move services into a more digital channel and be able to answer more personally.’

He says most tax offices are overwhelmed by the impact of frozen income thresholds – which bring more people into higher tax brackets and more people are having to engage directly with the tax system.  

‘I guess most of us feel more safe by calling in and asking about that specific situation.’

The Netcompany boss thinks the UK is not behind any other country, ‘on the contrary, I think the level of ambition is higher. 

‘If you look into what HMRC wants to accomplish [and] the idea of continuous, quarterly feedback instead of yearly feedback is a great one. We don’t have that in Scandinavia.’

HMRC’s critics will say that ambitions and targets are only useful if they are actually met in good time.

In 2016, HMRC announced its flagship digitisation programme, Making Tax Digital, requiring businesses and individuals to keep digital records and report their income quarterly.

It was meant to maximise tax revenue, save the Government cash and improve customer service.

But in the seven years since HMRC rolled out the programme, which has gone £1billion over budget, there has been little improvement.

Last autumn, HMRC chief executive Jim Harra said customer satisfaction for the online services help desk fell from 29.4 per cent to 24.7 per cent annually.

Satisfaction for the self-assessment webchat also fell, from 76.2 per cent to 70.1 per cent annually.

There’s nothing we can’t do, theoretically, digitally… [but] Rome wasn’t built in a day 

If it is struggling with the basics, like keeping waiting times down, how can customers be sure that they’ll receive a good level of service online? 

For Rogaczewski, the answer lies in further digitisation.

‘There’s nothing we can’t do, theoretically, digitally. If you have a complex organisation and you have access to the exact information about the person, by logic digital services are just as good or even better as any adviser.’

‘It’s not going to happen tomorrow, it will still be a combination of some services being digitally available but hopefully over time, six months by six months, year by year, you will experience that digital services are getting better… Rome wasn’t built in a day.’

HMRC will have some way to go in rebuilding trust among its customers, and pushing people towards chatbots could alienate them further.

Rogaczewski thinks it is merely a step towards progress: ‘I lived in the 70s and 80s and people say it was a great time. It wasn’t. 

‘I think [people] tend to forget progress over 20/30 years and you like to think of it from week to week or month to month. Life has changed a lot in the last 20 years for most people in Europe.

‘When the internet came it was a huge revolution. Did we have Airbnb, could we order food? It came gradually over 10/15 years. Now we can’t imagine a world without it.

Ordering food or accommodation is a transactional service, though. As he admits, tax affairs are slightly more complicated and providing personalised answers are crucial.

‘We need more chatbots’

For Netcompany, the answer is not fewer chatbots but more.

‘Eventually in most countries, you won’t need expensive advisers in order to make sure [people] don’t pay too much. 

‘Timing wise you need to make sure you have enough of the personal advice and the digital capabilities in order to strike that balance… It takes time.

‘People are sitting in call centres basically answering questions that have been put to them before. It can be a pattern recognised by a computer system even better than by human beings. 

‘It’s not the future for Europeans, we simply can’t afford it and people expect definite, accurate, personalised answers.

HMRC says that in the last tax year, it received more than 3 million phone calls on things that can be done online: resetting an online password, getting a tax code and getting a National Insurance number. It equates to almost 500 people working full-time on their queries.

It will be Netcompany’s chief challenge when it starts work with HMRC in the summer. 

Further digitising will face pushback from taxpayers who are keen to speak to humans.

‘When people start criticising and asking why we’re digitising so fast… why don’t we just hire more people in call centres… I need to say that’s definitely not the right way to go.

‘The only way forward for Europe and the UK is to digitise in an intelligent manner and then use human beings. 

‘We need them so that they can smile and explain to us, we don’t need people to do the calculations or look up things that machines are better at.’

Does this mean that we could reach a point in 10 years where everything is a chatbot? Andre seems to think so.

‘There will be cases where you still prefer human beings… the personal aspect will never disappear, but the facts will be found much easier.

‘I think the first steps in any tax office, and also for HMRC, is to make sure that 70-80 per cent of all citizens can self-service in an efficient manner, and trust goes up. 

‘I am certain that we have to, and we will, get there.’