A damning report into HMRC's customer service standards has caused MPs to demand a prompt improvement within the next three months.
MPs on the Public Accounts Committee (PAC) found that £42 billion in taxes is owed to HMRC, which is failing to collect around 5% of the tax it is owed each year.
While HMRC collected a record-breaking £731.1 billion in taxes and duties in 2021/22, the tax authority also only expects to recover around £4.5 billion lost to fraud and error in its Covid-19 support schemes.
The PAC criticised HMRC's approach to compliance, saying that more must be done to clamp down on outstanding tax debt.
PAC chair, Dame Meg Millier MP, said:
"The eye-watering £42 billion now owed to HMRC in unpaid taxes would have filled a lot of this year's infamous ‘public spending black hole'.
"But the public purse will continue missing out on billions of desperately needed revenues, as HMRC will only employ more staff to tackle compliance over the next few years - that's not fast enough to dent the tax gap at a time of huge public sector spending pressures.
"We recognise the problems HMRC faces - due to poor controls, the horse has bolted - but we believe there is a moral duty to pursue fraud."
HMRC call wait times hit a high
Just days before the PAC published its report, the Treasury already had HMRC under the lens for long call waiting times for taxpayers and agents.
Head of the Treasury committee, Harriet Baldwin, wrote to HMRC chief executive Jim Harra, requesting him to explain the longer waiting times.
Several reports tell of taxpayers who called the HMRC helpline in early January 2023 were on hold for several hours, some of whom were cut off without speaking to a representative.
Compared to previous years, the average speed of answering incoming calls to HMRC helplines was 12.22 minutes in 2021/22, almost double the waiting times in 2019/20.
The PAC report highlighted a dramatic drop in HMRC staffing levels, with 6,000 employees being cut over the past five years from 25,500 to 19,500.
Industry leaders support PAC report
President of the Chartered Institute of Taxation, Susan Ball, agrees that the PAC are "right to be challenging HMRC" and that the delays taxpayers currently face are "unacceptable".
"Our members tell us every day of the delays they face getting answers and action from HMRC - and the impact this is having on businesses and individuals," Ball said.
"HMRC has 6,000 fewer customer service staff than five years ago. The Government appears to have cut staff numbers anticipating efficiencies and time savings from digitalisation that have not yet arrived.
"HMRC is also sending out fewer payslips and payment reminders than they used to, which could be leading to more attempts to contact HMRC to find out how much to pay and by when."
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