This week's opinion: 12 December 2019

HMRC’s performance reports may not be top of anybody’s reading list but sometimes they shed an interesting light on issues. In the latest monthly performance update (tinyurl.com/hmrcmproct), I was struck by the relationship between two figures. The first was the increase in the number of personal tax accounts – 3.5 million people set up an account in the previous 12 months giving a total of 21.3 million. This is an impressive achievement and HMRC should be congratulated. 

But if we look a bit further a question arises. One of the key benefits to HMRC of digitisation (on which its funding model relies) is that digital interaction will replace – at least in part – letters and phone calls. The year-on-year post figures have decreased but calls have increased by almost 700,000. That might just be a statistical blip but it is worth keeping an eye on: if call volumes do not reduce we need to ask why. 

Perhaps the increase comes in areas not covered by the digital account or it could be that people needed to ring up because the account is not giving them what they want. But it could be a symptom of the fact that the more information you give somebody, the more likely it is that it will prompt further questions. It is a bit like building a new road to reduce congestion only to find that demand goes up and traffic gets worse – what the planners call induced demand. 

Don’t get me wrong: I am all for HMRC using digital communication methods where appropriate – but will it drive down costs or merely stimulate people to pick up the phone to query something they have seen on-screen?