HM Revenue and Customs has been accused of “degrading its own services” and damaging trust in the tax system by parliament’s spending watchdog.

A report from the Public Accounts Committee raised concerns about the tax agency, claiming it had worsened its telephone service “as a matter of policy” to drive users to digital channels.

HMRC told Sky News it “absolutely refutes” claims it deliberately made its customer service worse.

In its report, the PAC added that £5bn in debts were written off as uncollectable by the HMRC in the 2023-24 financial year – up from £3.2bn the year before.

The PAC report also said HMRC performance hit an all-time low in 2023-24, finding:

• Only 66.4% of attempts to speak to an adviser were answered, despite a target of 85%;
• Average call waiting times exceeded 23 minutes;
• Nearly 44,000 customers who had waited 70 minutes to speak were cut off without warning.

Committee chairman Sir Geoffrey Clifton-Brown said HMRC has “a responsibility to aspire to the highest standards of service,” but was “excavating its way to new lows in service levels every year”.

He added: “Worse, it seems to be degrading its own services as a matter of policy.

“HMRC is an organisation in defensive mode, and needs bold and ambitious leadership to begin to chart its recovery.”

In response to the PAC report, Jim Harra, first permanent secretary and chief executive at HMRC, told Sky News: “The committee’s claims about our customer service are completely baseless. In reality, we’ve made huge improvements to our service standards, with call wait times down by 17 minutes since April last year. 

“We will always be there to answer the phone for those who need extra help. At the same time, more than 80 per cent of customers are satisfied with our digital services, with more and more people using them to quickly and easily manage their tax affairs.”