Tax officials failing to collect billions of pounds for the Treasury have admitted they ignore millions of phone calls from businesses trying to pay what they owe. HM Revenue and Customs (HMRC), the government body responsible for taxes, fails to collect £46.8 billion every year – enough to plug a black hole in the public finances and allow Chancellor Rachel Reeves to balance the books without requiring further tax hikes.
But it has emerged that more than three million calls to a telephone helpline for people attempting to pay their tax bill simply go unanswered. Many come from owners of small businesses, who struggle with complex tax rules because they don’t have the accounts departments employed by larger firms.
The revelation was met by incredulity by MPs. Liam Byrne, Labour Chair of the House of Commons Business Committee, said: “Nearly £47 billion of tax that’s owed is not collected yet when businesses pick up the phone to get things right, millions of calls simply go unanswered.”
Ms Reeves is reported to be considering a range of punitive taxes on property or inheritance in the run-up to a Budget on November 26. But a senior HMRC official said the agency wasn’t given enough funding to answer every phone call.
Jonathan Athow, HMRC’s Director General of Customer Strategy and Tax Design, told MPs the tax office had a target of answering 85% of phone calls. He said: “Our target is about 85%. That’s what we’re funded now to do.
“We are pretty close to those levels at the moment. I think we’re about 83%.”
Asked how many calls went unanswered, he told the Commons Business Committee: “At the top of my head, we’re talking maybe 3 or 4 million calls potentially.
“I’m just trying to think through how the numbers flow through our system, because they are triaged and people are allowed to work out what they want to do, whether they want to wait for somebody or not, but of those people who indicate, it’s probably 3 to 4 million calls that go unanswered.”
HMRC figures show £46.8 billion in tax went uncollected in the 2023 to 2024 tax year and 60% of this is tax owed by small businesses, including unpaid corporation tax and national insurance.
Mr Byrne said: “Three to four million calls lost each year is not just inefficiency. It is tantamount to indifference.
“It is a system that punishes those who try to play by the rules, while letting slip a £28 billion gap from small businesses alone. That is not fair.”
Tina McKenzie, Policy Chair, Federation of Small Businesses, said: “Small firms spend a huge amount of time and money on tax compliance every year – nearly £25 billion and over 240 million hours every year, spread across the small business community, according to our research. Dealing with HMRC can be a major source of headaches for small businesses, with less than a quarter of those who had contacted HMRC by phone over the previous two years rating their experience as good.”
An HMRC spokesperson said: “We successfully handle millions of customer queries every month, mostly online, and the government is investing £500m in our digital services so more and more people can sort their tax affairs without having to wait on the phone.”
