The proportion of helpline interactions that are caused by the departments’ errors and delays, or by a mistake on the part of the user, has risen sharply in recent years
The proportion of calls to HM Revenue and Customs helplines that were classed as ‘failure demand’ topped three quarters in the 2024/25 year.
Failure demand is a categorisation applied to calls that, for various reasons, could be considered avoidable. According to a major report on the tax department’s customer service published last year by the National Audit Office, this largely comprises “HMRC’s process failures and delays” – but also covers errors made by users, as well as “customers chasing progress, including when HMRC has not yet breached target timescales for responding”.
The NAO found 65% of all calls to the agency’s telephone support lines were classed as failure demand in 2018/19.
By 2022/23, this figure had risen to 70%, before increasing again to 72% the following year.
In 2024/25 there was an even more pronounced spike, as failure demand accounted for 76% of all calls, according to statistics referenced by Lord Spencer Livermore, the financial secretary to the Treasury.
In response to a written parliamentary question from Conservative peer Lord Theodore Agnew, the minister added that work on bringing this percentage back down will form part of a broader effort to improve HMRC’s customer service levels in general. However, many calls grouped under the ‘failure demand’ banner are already examples of crucial customer support offered by the department, according to Livermore.
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“Last year, HMRC received extra funding to deploy additional customer service advisers,” he said. “[It is] also investing in new technology which will significantly enhance the customer experience. Improving day-to-day performance is a key priority for HMRC.”
The minister added: “Failure demand encompasses a broad spectrum of issues, including customer, employer and HMRC errors. While HMRC classifies some categories of call as failure demand – for example the customer could theoretically find relevant information via online guidance – these calls are essential in helping customers understand their tax obligations and pay the right amount of tax. Therefore, while HMRC is seeking to reduce failure demand and encourage customers to use online services, [it] recognises the importance of continuing to support those who call for extra help.”
Last year’s NAO report made a formal recommendation for HMRC to set a specific target for reducing failure demand-classified calls and letters – and to produce separate measurements for avoidable contact respectively caused by the department itself and by users. This has not yet been taken on by the tax agency.
HMRC’s customer service performance has been subject to much scrutiny – and no little criticism – over the past year. In its annual report for the 2023/24 year, the department said that “we recognise service levels have caused real difficulties for customers and agents”.
There has been some rebound since then and, in October 2024, HMRC achieved its stated baseline target of answering 85% of all calls to its helplines. This came after 39 consecutive months of falling short of this mark – sometimes by more than 30 percentage points.
