Chief Executive and Permanent Secretary Lin Homer's speech to the HMRC Annual Stakeholder Conference.
[Thanks to Minister and congratulations for promotion to FST]
And a very warm welcome to our second annual conference.
It’s great to see so many of you here today, representing such a wide range of organisations, all with a close interest in what we do.
Today we’re not just going to talk with you about how we’ve performed over the past year, and what we’ve been doing to improve our performance.
But we are also going to share with you, for the first time, what we’re planning to do to build our long-term future.
Best ever results
Let me reiterate the minister’s comments about how we performed over the last year.
I am very proud that the committed and capable staff of HMRC have delivered our best-ever set of results this year.
Record revenues to fund the UK’s public services.
And best-ever customer service levels.
Delivered at lower cost to the country.
For the first time, we brought in more than £500 billion in total tax revenues and secured our highest-ever level of compliance revenues at £23.9 billion.
This comprises the whole range of our work and includes extra cash collected, losses prevented and revenues collected as a result of closing loopholes.
It also includes a reasonable estimate of the impact of our work on future taxpayer behaviour. Those of you with time to spare yesterday may have caught some our debate with the Public Accounts Committee explaining why all of those approaches are important.
We have also reduced tax credits error and fraud to its lowest-ever level, at 7%.
We delivered the £235 million in cost savings last year, improving our processes, making more efficient use of our estate, and continuing to reduce the size of our workforce.
We’ve continued to improve customer service. We handled 79% of calls to our contact centres – our best ever performance. Only four years ago we were not answering even half of all calls.
We also exceeded our target for handling post, for the second year in a row, turning more than 80% around within 15 working days.
We know there is still to do in this space, and are keen to keep improving.
We’ve achieved these record results while delivering some major projects, such as Real Time Information for PAYE, which has been successfully operating for its first year, with 48 million individual employments now reporting in real time.
We’re preparing for the launch of the new Tax-Free Childcare scheme, as part of the government’s wider ambitions to support working families.
And we’ve been bringing in additional contracted resource to help us collect more debt than ever and to reduce Fraud and Error in Tax Credit system, we’re continuing the transition to a new more digital way of working with a series of new exemplars underway.
So far over 250,000 people have renewed their tax credits online, with a consistent 96 per cent satisfaction rate. Nick has online Tax Credits in his breakout group.
Our Annual Report highlighted an error that we made in 2011.
We’ve corrected this and we apologised to Parliament and to be clear it didn’t affect the amount of tax we brought in for the UK at all.
And we’re fully on track to deliver a return of £18 billion in compliance revenues, in return for the Government’s investment of £1 billion. It simply meant we were accounting for the improvement from a wrong starting point even. allowing for a reset base line.
We have done what we said we would do in this Spending Review – in the first 2 years – over achieved in the third and are on target to deliver this year too.
The need to change and improve
This is great performance, HMRC’s best ever. But we’ve not reached the end-point; our work so far needs to be the foundation for even better performance in the future.
Answering eight out of ten calls across the year is not good enough, because that still means that two calls out of ten went unanswered.
As Ruth Owen will explain later on, the solution to improving this performance isn’t simply a matter of providing more people to answer the phones. Instead, we need to change the way we serve customers, getting it right so they don’t have to call us at all, offering online alternatives, reducing uncertainty so we don’t get assurance calls, helping customers and taxpayers avoid making mistakes.
It’s important to put our current levels of service into context, to understand the scale of the challenge.
We received more than 70 million letters and 55 million phone calls last year.
And we sent out 200 million letters and a staggering 245 million forms and guidance.
These levels of contact would be a challenge for any private or public sector organisation to deal with.
This volume of post – and the phone calls it generates – are simply unsustainable.
We need to make it as simple and easy as possible for the honest majority to get their taxes and payments right first time, every time.
So we aim to reduce the amount of post we receive by around 30 per cent over the next 12 months – that’s around six million fewer letters and forms to process.
We will do this by delivering more online services that are much simpler and easier to use.
In the next two years, the digital services that we’re currently developing, testing and rolling out will be used by millions of taxpayers.
Our vision is to provide all of our customers with their own individual tax account – through which they can see all of their tax affairs and deal directly with HMRC, without the need to get in touch with us by phone or post.
We can then put more resources into making it harder for the dishonest minority to cheat the system, investing in data analytics and intelligence systems that help us to identify fraud, evasion and avoidance, and in our skilled officers who pursue the cheats.
And we’ll will seek new powers where we and Ministers judge them to be necessary to deal with the very small minority of individuals and businesses who are, gaming the system.
Such as the power for the direct recovery of debt from the recalcitrant few who refuse to pay what they owe, even though they have the means to do so.
And the power to accelerate disputed payments from those who seek to avoid their tax in complex marketed avoidance schemes – something that has had some coverage in the media in the last couple of weeks.
As with all powers, there need to be appropriate safeguards in place, and you’ve a right to expect us to exercise our powers responsibly, impartially and with integrity.
I hope the effort and the achievements we’ve made in recent years show that we are determined to serve the UK with professionalism, effectiveness and efficiency and fairness.
Ministers have given us extra investment and supported our request for new powers. But in return, inevitably they keep asking even more of us.
In 2015-16 we’ve been asked to make a further five per cent reduction to our budget through efficiencies.
And we’ve been asked to bring in compliance revenues of £26.3 billion.
And we will be continuing to transform how we serve our customers.
Ruth will be setting out our vision for how we are building our future, and we want to open up a conversation about this.
We want to involve those of you who know and understand our role and our business in helping us to shape and to deliver that future.
After you’ve listened to Ruth, you’ll have a chance to discuss elements of this in smaller breakout groups.
We’ve been having this conversation internally since March, beginning with 500 senior leaders, our 4,000 senior managers and since May with the entire workforce, in presentations and facilitated discussions.
More than 20,000 of our people have already taken part and we expect to have completed the first phase of this national face-to-face discussion with all 60,000 by mid-August.
Many of our workforce understand why we need to change and are excited by what the future holds. All of us as human beings are occasionally overwhelmed by the pace of change we face. I’ll have to try the Ministers cricketing and football analogies out on them to see if it helps!
I hope as you join our discussions today you’ll continue as you’ve done so far, to give us your wisdom, insightful challenges and support.