Individuals, Small Businesses and Agents Customer Survey 2021

Question 1

1.  Executive summary

Accepted Answer

HM Revenue and Customs (HMRC) commissioned Kantar Public to undertake research on customer experiences of dealing with HMRC.

The Individuals, Small Businesses and Agents Customer Survey was first commissioned in 2015 to provide the customer understanding to support the Department’s outcome delivery plan to collect the money that pays for the UK’s public services and help families and individuals with targeted financial support, and to chart customer experience over time. HMRC’s outcome delivery plan can be viewed on Gov.UK. The survey is an important source of evidence on customer experience and perceptions of the tax administration system.

The survey covers 3 groups: Individuals, Small Businesses and Agents. The 3 customer groups are surveyed and reported on separately. This report covers the seventh annual survey, conducted between September and November 2021. Only changes from previous years that are statistically significant at the 95% confidence interval are reported on. Due to a change in survey method for Individuals in 2018, no comparative scores are provided for previous waves. In 2021, qualitative research was conducted with Small Businesses and Individuals which focused on experience and journeys using online and telephone contact channels.

1.1 Summary of findings

In 2021, three quarters (76%) of Small Businesses gave a positive rating for their overall customer experience. For Agents, half (48%) gave a positive rating and for Individuals just over 6 in 10 gave a positive rating (62%). Across all customer groups, positive ratings of overall experience decreased from 2020 levels, back to 2019 levels. The trend of decreased positive ratings between 2021 and 2020 and levels of positive ratings returning to 2019 levels was present across a range of measures. For Small Businesses, positive ratings of overall experience decreased from 82% in 2020 to 76% in 2021; for Agents, ratings decreased from 61% in 2020 to 48% in 2021; and for Individuals ratings decreased from 68% in 2020 to 62% in 2021.

Similar to overall experience ratings, positive ratings of confidence in HMRC decreased from 2020 levels across all customer groups, returning to 2019 levels. Agents saw the largest decrease in positive ratings on confidence from 57% in 2020 to 43% in 2021; Small Businesses decreased from 71% in 2020 to 63% in 2021; and Individuals decreased from 53% in 2020 to 45% in 2021.

In 2021, for the first time customers were asked to rate whether HMRC is an organisation they trust. Positive ratings ranged from 70% for Small Businesses to 61% for Agents and 52% for Individuals.

Between 2019 and 2020, there was an increase in levels of Small Businesses and Individuals using any online channels to interact with HMRC. This higher level of online channel use was maintained across both customer groups in 2021. Three in five (59%) Small Businesses and 38% of all Individuals interacted through online channels only. Two thirds (66%) of Individuals interacted with HMRC in 2021. The majority of Agents continued to use both online and telephone channels to interact with HMRC (73%), reflecting their more complex tax needs when acting for their clients. For both Small Businesses and Agents, the smaller businesses and Agents (based on turnover up to £20,000 for Small Businesses and up to £60,000 for Agents) were more likely to only interact with HMRC online.

Customers were asked to rate HMRC services they had used. Ratings of online services were generally stable across all customer groups. Ratings of telephone helplines were stable amongst Small Businesses and Individuals. However, there was a decrease in ratings amongst Agents for both the Agents Dedicated Helpline (36% in 2021 compared with 57% in 2020 and 57% in 2015) and other HMRC helplines (26% in 2021 compared with 35% in 2020 and 30% in 2019).

Customers were asked whether HMRC had made an error in their tax dealings. For Small Businesses, 12% reported an error in 2021 and 8% in 2020; for Agents 41% reported an error in 2021 and 37% in 2020, which was a significant increase; and for Individuals 14% reported an error in 2021 and 15% in 2020. However, the proportion of customers who reported they had experienced an error, who gave a positive rating for resolving the error, decreased from 2020 for all groups. For Small Businesses, positive ratings of error resolution decreased from 40% in 2020 to 29% in 2021; for Agents there was a decrease from 41% in 2020 to 30% in 2021; and for Individuals there was a decrease from 45% in 2020 to 34% in 2021. For all customer groups, experiencing an error was associated with lower overall experience, confidence and ease ratings.

Each year the survey will look at different aspects of compliance. The 2021 survey looked at tax avoidance. Across all customer groups the majority of customers continued to feel tax avoidance was never acceptable. However, there were increased proportions of Small Businesses who felt avoidance was widespread, an increase from 38% in 2020 to 42% in 2021. Amongst Agents (53%) and Individuals (79%) there were no significant changes in the proportions who felt tax avoidance was widespread from 2020. There were also lower proportions of Small Businesses (60% in 2020 to 55% in 2021) and Individuals (48% in 2020 to 40% in 2021) that felt HMRC was effective in preventing tax avoidance.

Question 2

2.  Headline findings

Accepted Answer

2.1 Individuals headline findings

The survey of Individuals covers all members of the general public aged 16 or older. In 2021, two thirds (66%) of Individuals had an interaction with HMRC between Autumn 2020 and Autumn 2021.

2.1.1 Customer experience

Individuals were asked about the channels they used to contact HMRC and to rate those they had used. Positive ratings of HMRC webpages fell in 2021 (68% from 75% in 2020) back to 2019 levels (67%). Two thirds (66%) gave a positive rating of HMRC online services, while over half (54%) gave a positive rating of telephone helplines. Three quarters (73%) gave a positive rating for their HMRC Personal Tax Account, and this remained consistent with 2020.

Six in ten (62%) Individuals who had an interaction with HMRC had a positive overall experience of dealing with HMRC. This was a decrease from 68% in 2020, returning to 2019 levels (63%). As in previous years, Individuals who only used online channels to interact with HMRC were more likely to report a positive experience (68%) than those who used telephone and online channels (56%).

Positive ratings of the following dimensions of customer experience fell between 2020 and 2021:

time taken to reach the end result (58% in 2021 from 63% in 2020)
HMRC resolving queries or issues (59% in 2021 from 63% in 2020)
HMRC staff were approachable (58% in 2021 from 62% in 2020)
getting tax transactions right (61% in 2021 from 65% in 2020)

One in seven (14%) of Individuals reported that HMRC had made errors with their personal tax dealings in the past 12 months, similar to 2020 (15%). However, the proportion of Individuals that gave a positive rating for how HMRC had resolved these errors fell to 34% from 45% in 2020.

2.1.2 Perceptions of HMRC

Over 4 in 10 Individuals (45%) were confident in the way HMRC was doing its job. This was a decrease from over half (53%) who gave a positive rating in 2020. Confidence was strongly linked to views of HMRC’s efficiency, effectiveness, and fairness.

A third (33%) of Individuals agreed that HMRC was efficient and does not waste money. Around 4 in 10 (41%) agreed that HMRC applied penalties and sanctions equally. Two thirds (63%) of Individuals agreed that HMRC ensured customers’ data and personal information was treated confidentially.

Half (52%) reported that they trusted HMRC as an organisation, a new measure for 2021.

2.1.3 Compliance

Each year the survey will look at different aspects of compliance. The 2021 survey looked at avoidance. Three quarters of Individuals (76%) stated that tax avoidance was never acceptable. Eight in ten felt tax avoidance was widespread (79%), which was in line with 2020 and an increase since 2019 (70%). Four in ten (40%) Individuals thought HMRC was effective in preventing or reducing tax avoidance, a decrease since 2020 (48%).

2.2 Small Businesses headline findings

Small Businesses were defined as businesses with an annual turnover under £10m and between 0 and 19 employees. This includes self-employed sole traders and partnerships. Half of businesses had no employees (48%) and a third (36%) had one to 4 employees. Almost three quarters of Small Businesses surveyed had received support from one or more government COVID-19 schemes delivered by HMRC (72%).

2.2.1 Customer experience

Small Businesses were asked about the channels they used to contact HMRC and to rate those they had used. Amongst customers who used the following channels, 81% rated the Business Tax Account positively, 74% rated HMRC’s webpages on GOV.UK positively and 79% rated HMRC’s other online services positively. Ratings of HMRC’s webpages increased since 2019 (70% in 2019) as did ratings of other online services (72% in 2019). Small Businesses were also asked to rate HMRC telephone helplines, and 59% gave a positive rating which remained higher than baseline levels in 2015 (46%).

Over three quarters (76%) of Small Businesses gave a positive rating for their overall experience of HMRC. While this was a decrease from 2020 (82%), it was a similar level to 2019 (75%). Similar to previous years, the smallest businesses and those that interacted with HMRC only through online channels were the most positive. Nearly all positive ratings of dimensions of customer experience decreased from 2020 levels, but remained in line with 2019 ratings.

One in ten (12%) Small Businesses reported that HMRC had made errors with their business tax dealings in the past 12 months, similar to 2020 (8%). The proportion of Small Businesses that gave a positive rating for how HMRC had resolved these errors fell to 29% from 40% in 2020.

2.2.2 Perceptions of HMRC

Levels of confidence in HMRC fell from 2020 levels back to 2019 levels. Nearly two thirds (63%) of businesses gave a positive rating for their confidence in HMRC in 2021 compared with 71% in 2020, and similar to 2019 levels (61%). Around one third (36%) of Small Businesses thought that HMRC was efficient and does not waste money, a decrease from 2020 ratings (42%) back to 2019 levels (35%). Around 4 in 10 (39%) agreed that HMRC applied penalties and sanctions equally. Three quarters (76%) of businesses agreed that HMRC ensured customers’ data and personal information was treated confidentially. Businesses were asked whether HMRC was an organisation they trust for the first time in 2021. Seven in ten (70%) gave a positive rating for their trust in HMRC.

2.2.3 Compliance

As stated above each year the survey will look at different aspects of compliance. The 2021 survey looked at avoidance. Seven in ten (69%) of small businesses stated that tax avoidance was never acceptable and 4 in 10 felt tax avoidance was widespread (42%), an increase since 2020 (38%). Just over half (55%) of Small Businesses thought HMRC was effective in preventing or reducing tax avoidance, a decrease since 2020 (60%).

2.3 Agent headline findings

Agents are paid by customers, individuals or businesses, to represent them in dealings with HMRC. Just over half of Agents were accountancy firms (54%) and 3 in 10 (29%) were bookkeeping firms.

Nearly half of Agents had no employees (48%) and a third had between one and 4 employees (33%). Two thirds (64%) were a member of a professional organisation.

2.3.1 Customer experience

Agents were asked about the channels they used to contact HMRC and to rate those they had used. Almost all Agents used online services (97%). Three quarters (74%) of Agents used the telephone. Agents who had used HMRC’s webpages rated them positively (61%, an increase from 54% in 2019). Ratings of other online services declined over the last year but remained higher than in 2019 (67% in 2021, 74% in 2020 and 61% in 2019). Positive ratings for the Dedicated Agent Helpline decreased in 2021 (36%) from 57% in2020 and 61% in 2019. There was also a decrease in Agents’ positive ratings of other HMRC telephone helplines (26% in 2021, a decrease from 35% in 2020 and 30% in 2019).

Under half (48%) of Agents gave a positive rating for their overall experience of dealing with HMRC, on behalf of their clients, over the last 12 months. Positive ratings were lower than 2020 (61%) and had fallen back to 2019 levels (51%). Similar to previous years, the smallest Agents and those that interacted with HMRC only through online channels were the most positive. All ratings of dimensions of customer experience decreased from 2020 levels but remained in line with 2019 ratings.

Four in ten (41%) Agents reported that HMRC had made errors with their clients’ business tax dealings in the past 12 months, an increase from 37% in 2020. The proportion of Agents that gave a positive rating for how HMRC had resolved these errors fell to 31%, a decrease from 41% in 2020.

2.3.2 Perceptions of HMRC

Confidence in HMRC amongst Agents dropped to 2019 levels (43% gave a positive rating, compared with 57% in 2020 and 45% in 2019). Agents that gave positive ratings of their overall experience and HMRC’s efficiency, effectiveness and fairness were also more likely to express confidence in HMRC. Agents were more likely to agree that HMRC was effective (54%) than efficient (21%) and 53% agreed that HMRC treated their clients fairly. Ratings of fairness increased since 2020 (47%) and ratings of effectiveness remained in line with 2020 ratings (54%). Ratings of efficiency decreased from 2020 (27%) back to 2019 levels (22%). In a new measure for 2021, 61% of Agents gave a positive rating for their trust in HMRC.

2.3.3 Compliance

As stated above each year the survey will look at different aspects of compliance. The 2021 survey looked at avoidance. Agents’ attitudes to tax avoidance remained similar to 2020. Two thirds (64%) of Agents stated that tax avoidance was never acceptable and half felt tax avoidance was widespread (53%). Just over half (57%) thought HMRC was effective in preventing or reducing tax avoidance.

Question 3

3.  Background and methodology

Accepted Answer

3.1 Background

HM Revenue and Customs (HMRC) commissioned Kantar Public to undertake research on customer experiences of dealing with HMRC.

HMRC is the UK’s tax, payments and customs authority. It collects the money that pays for the UK’s public services and helps families and individuals with targeted financial support. Its vision is to be a trusted modern tax administration system. For more information HMRC’s outcome delivery plan can be viewed on Gov.UK and the Building a trusted, modern tax administration system report on Gov.UK.

HMRC commissioned the Individuals, Small Businesses and Agents Customer Survey in 2015 to provide customer understanding to support the Department’s mission to collect the money that pays for the UK’s public services and help families and individuals with targeted financial support, and track progress in this area over time. The survey is an important source of evidence on customer experience and perceptions of the tax administration system. It provides evidence which contributes to measuring HMRC’s performance against the Department’s Strategic Objectives to collect the right tax and pay the right financial support, make it easy to get tax right and hard to bend or break the rules, and maintain taxpayer’s consent by treating everyone fairly and protecting society from harm. HMRC’s Annual Report and Accounts provides information on the Department’s customer service performance. For more information view HMRC’s annual report and accounts on Gov.UK.

3.1.1 Research aims

The survey aims to:

understand and track changes in overall customer experience over time
understand and track changes in overall perceptions of HMRC over time
help HMRC identify where to focus effort to improve customer experience

This report presents findings from the 2021 survey with references to findings from earlier surveys conducted annually since 2015 for each customer group. The reports for each of these years are available on GOV.UK, the most recent of which can be found by viewing ISBA 2019 and ISBA 2020. Data tables have been published alongside this report which include more data from the 2021 survey. For the Small Businesses and Agents surveys, the report highlights changes between 2020 and 2021, and change over the length of the survey (2015 to 2021). It looks at changes between 2019 and 2021 to explore any differences with performance prior to the COVID-19 pandemic. Only changes from previous years that are statistically significant are reported on. Due to the change in survey method for the Individuals survey in 2018, only changes between 2020 and 2021 and 2019 and 2021 are reported on.

3.2 Methodology

3.3 Customer Groups

3.3.1 Individuals

The survey of Individuals covers all members of the general public aged 16 or older. It was agreed during the survey design that self-employed sole traders are both a valid subset of the Individuals population and a valid subset of the Small Businesses population. Self-employed people have a dual relationship with HMRC, first as private citizens who pay tax or receive benefits (including on earnings from their business and other non-business related savings and investments) and second as business owners.

Individuals who reported having any interaction with HMRC in the previous 12 months were asked to rate their experiences of HMRC on a number of dimensions. All Individuals (including those who did not report having any interactions) were asked about their perceptions of HMRC.

In 2021, the survey used a random probability Address Based Online Surveying (ABOS) method, as was the case between 2018 and 2020. In 2021, the ABOS method was supplemented with a complementary sample drawn from Kantar Public’s random sample panel, Public Voice. The Public Voice sample was introduced to improve the representativeness of our achieved sample. The Public Voice sample completed the survey online, with content mirroring the ABOS online survey. More detail on the approaches can be found in the technical appendix.

The survey covers 3 separate customer groups: Individuals, Small Businesses and Agents. Each group is surveyed separately and results reported separately.

3.3.2 Small Businesses

Small Businesses are defined as having a turnover of under £10m and between 0 and 19 employees.

Small Businesses were surveyed at the enterprise level (rather than the local unit or site level) as most Small Businesses are based at a single site.

The survey used 2 sample sources:

the Office for National Statistics’ Inter-Departmental Business Register (IDBR) was used to cover businesses that operated a PAYE scheme or had a turnover above the VAT threshold
HMRC’s Self-Assessment (SA) database was used to cover businesses below the VAT threshold. The technical report accompanying this report provides more information about the sampling approach for Small Businesses.

The individual interviewed on behalf of the business was the owner, or a director or manager with overall responsibility for tax matters. Throughout the questionnaire, respondents were prompted to answer about their experience of dealing with HMRC on behalf of their business over the previous 12 months.

3.3.3 Agents

Agents are defined as ‘businesses that are paid to represent others in dealings with HMRC. Agents were sampled at the enterprise level (rather than the local unit or site level).

The Agents sample frame was drawn from 2 sources:

the IDBR: to cover Agents that operate a PAYE scheme or had a turnover above the VAT threshold
HMRC’s SA database of customers: to cover Agents below the VAT threshold that do not have a PAYE scheme

All Agents were asked a screening question to confirm that they are a professional financial agent who personally deals with HMRC on behalf of clients.

The individual interviewed on behalf of the Agent firm was the owner or one of the directors or partners of the Agent firm. Throughout the questionnaire, Agents were prompted to answer about their experience of dealing with HMRC on behalf of clients over the previous 12 months.

3.3.4 Fieldwork methodology

The data collection method used for the Small Businesses and Agents customer groups was Computer Assisted Telephone Interviewing. Each interview lasted around 20 minutes.

The data collection method used for Individuals was Address Based Online Surveying (section 3.3.1) supplemented by a sample from Kantar Public’s random sample panel Public Voice. These approaches allow the results to be generalisable to the wider population. A more detailed description of the methods is given in the separate Technical Annex.

Interviews were carried out with 2,180 Individuals, 2,080 Small Businesses and 1,850 Agents between 2 September and 26 November 2021.

3.3.5 Survey content

The survey covers the following areas:

interactions with HMRC in the previous 12 months
rating of customer experience (including rating of channels used)
section of questions measuring key dimensions of experience
how good or poor were HMRC at getting tax (tax and benefits) and credits transactions right?
how would you rate the quality of information you have looked for or received from HMRC?
how easy or difficult was it to find any information you needed on tax issues from HMRC?
HMRC made clear:
what steps I needed to take
when everything was completed
were HMRC approachable (Individuals) or professional (Small Businesses and Agents)?
how acceptable was the time taken to reach the end result?
how good or poor were HMRC at resolving any queries or issues?
did HMRC have systems which were good at preventing me from making mistakes?
other measures of customer experience, reflecting the manner in which HMRC administers the tax system
fairness
personalisation
ease of dealing with tax issues
rating of customers’ personal circumstance being taken into account
whether HMRC made any errors and if yes, whether those were resolved
whether had made a complaint to HMRC
(Small Businesses only) integration with HMRC systems
perceptions of HMRC
general perceptions of HMRC
HMRC being an efficient, effective and fair organisation
confidence in HMRC
trust in HMRC
perceptions of compliance
awareness and attitudes towards changes to digital record keeping announced in July 2022 (Small Businesses and Agents only)
demographics

The questionnaires are included in the Technical Annex.

Individuals without interactions with HMRC over the previous 12 months were not asked about their customer experience but were asked about their perceptions of HMRC and demographic characteristics. Agents and Small Businesses were asked to answer all sections.

3.3.6 Reporting notes

Many of the questions in the survey asked customers to rate their customer experience and perceptions of HMRC using a 5 point response scale, where 5 was the most positive response and one was the least positive response. Responses have been grouped into positive (a score of 4 or 5), neutral (a score of 3), and negative (a score of one or 2). Respondents could also say ‘Don’t know’ or ‘Not applicable’. Respondents who said the question did not apply to them were excluded from the analysis of that dimension.

Where customers were asked to rate HMRC they were asked to give an overall opinion about all of their experiences of dealing with HMRC over the previous 12 months.

Where the results for one group of respondents are compared with the results for another group, any differences discussed in the text of this report were statistically significant at the 95% probability level, unless otherwise stated. This means that we can be 95% confident that the differences observed between the sub-groups are genuine differences, and have not just occurred by chance. Similarly, any changes between years discussed in the text are statistically significant at the 95% probability level.

3.3.7 Qualitative fieldwork

Kantar Public conducted 40 follow up qualitative interviews, 20 with Small Businesses and 20 with Individuals. Participants were selected from those who agreed to be re-contacted during the survey and who interacted with HMRC both by online and telephone contact channels. The qualitative interviews covered experiences interacting with HMRC online and by telephone and explored benefits and barriers to using both contact channels. More detail can be found in the technical annex.

Question 4

4.  Individuals

Accepted Answer

The survey of Individuals covers all members of the general public aged 16 or older.

There was an even split between males (48%) and females (51%). Individuals fell into the following age bands: 23% were 16-34, 31% were 35-54 and 46% were 55 or over. Four in ten (42%) were employed full time, 13% were working part time, 8% were self-employed and 38% were not in employment (e.g. studying, retired, caring for family). Six in ten (62%) reported having a single source of income and 32% reported having multiple income sources. A quarter (24%) of employees reported they had been furloughed and 59% of self-employed Individuals had received support through the Self-Employed Income Support scheme.

Nearly 7 in 10 Individuals (66%) had interacted with HMRC in the last 12 months, which was unchanged from 2020.

4.1 Channels used to interact with HMRC

Individuals were asked about the ways in which they interacted with HMRC in the last 12 months. Interactions were defined as making contact with HMRC, receiving information from HMRC or using HMRC’s online services. Of all Individuals:

half (51%) of Individuals used any online channel (used an online service, including the Personal Tax Account, or looked for information on HMRC webpages), which was in line with 2020 levels
under 2 in 10 (17%) Individuals had contact with HMRC via telephone, which remained at the lower 2020 level (19%) and was lower than 2019 levels (23%)

Of all Individuals:

nearly 4 in 10 Individuals (38%) only contacted HMRC through online channels, which was in line with 2020 findings (36%) and remained higher than 2019 (28%)
the proportion of Individuals who contacted HMRC via online and telephone channels remained consistent in 2021 (14%) with 2020 (15%)
a small proportion of Individuals only contacted HMRC by telephone (3%)

Amongst Individuals who contacted HMRC by telephone and online channels, 65% had contacted HMRC by telephone because they could not resolve the issue online. The qualitative research discussed difficulties Individuals had in their dealings online which led them to call HMRC. Respondents reported that a lack of confirmation about whether they had handled their dealings correctly online, which led to them feeling worried and calling HMRC to seek reassurance by speaking to an adviser:

“I’ve done my tax returns this year and I’m not 100% sure it’s right, would be nice to talk it through with someone.” (Individual)

4.1.1 Rating of services

Individuals were asked to rate HMRC’s contact channels, where these had been used by the respondent. The contact channels customers were asked to rate were HMRC webpages, the Personal Tax Account, other HMRC online services and HMRC telephone helplines.

webpages: two thirds gave a positive rating (68%) for HMRC webpages, a decrease from 75% in 2020
Personal Tax Account: three quarters (73%) of Individuals positively rated the Personal Tax Accounts which remained in line with previous years
other online services: two thirds (66%) of Individuals gave a positive rating of other HMRC online services which remained in line with previous years

Qualitative interviews found Individuals saw many benefits to interacting with HMRC online. They reported online services offered quicker answers to general queries, appreciated the flexibility of accessing the services at any time and allowing the individual to review at their own pace. They also found it helpful to interact online where English was not their first language.

“It’s good for general queries if you’re able to find what you need, about how system works, filling in forms.” (Individual)

telephone helplines: ratings of telephone helplines remained consistent with previous years at 54%

Qualitative interviews also found benefits to telephoning HMRC for Individuals. Individuals said call handlers provided clear information and were sympathetic, could provide reassurance and answer specific queries or issues, and solve issues where any error had been made.

“Every time I’ve had contact they’ve been incredibly helpful, very understanding and compassionate.” (Individual)

4.2 Customer experience

The proportion of Individuals who had an interaction with HMRC in the previous 12 months who gave a positive overall experience rating decreased in 2021 (62% from 68% in 2020). This decrease was in part driven by Individuals aged 16 to 34 (55% gave a positive rating in 2021 compared with 69% in 2020). Individuals who only contacted HMRC via online channels were more likely to give a positive rating (68%) compared with those who used telephone and online channels (56%).

4.2.1 Dimensions of customer experience

Individuals who had interacted with HMRC were asked to rate HMRC on specific dimensions of customer experience. In 2021, there was a decrease in positive ratings for the following four dimensions. Ratings for other dimensions remained unchanged.

HMRC resolving queries or issues: Individuals were asked how good HMRC was at resolving queries or issues. Positive ratings declined from 63% in 2020 to 59% in 2021. This was in line with 2019 levels (60%)
time taken to reach end result: Individuals were asked whether the time taken to reach the end result was acceptable. Six in ten gave a positive rating (58%), which was a decrease from 63% in 2020. This was in line with 2019 levels (57%)
HMRC staff were approachable: 6 in 10 (58%) Individuals gave a positive rating for whether HMRC staff were approachable, a decrease from 62% in 2020 back to 2019 levels (58%)
getting tax transactions right: Individuals were asked how good HMRC is at getting transactions right. Six in ten (61%) gave a positive rating, a decrease from 65% in 2020 back in line with 2019 levels (63%)

4.3 Views on administration of tax system

Individuals were asked about their views of the administration of the tax system. More specifically, they were asked whether HMRC treated them fairly, the ease of dealing with tax issues, whether they found that HMRC’s services were personalised and whether they perceived HMRC as empathetic. All questions in this section were asked of Individuals who reported having had any interaction with HMRC over the last 12 months.

Respondents were asked whether HMRC treated them fairly. Seven in ten (71%) Individuals gave a positive rating.

Over half (57%) of Individuals gave a positive rating for ease of dealing with tax issues. Individuals who only used online channels (61%) were more likely to give a positive rating (compared with 53% who interacted using online and telephone channels). Individuals who reported HMRC had not made an error in their tax dealings (62%) were also more likely to give a positive rating compared with those who reported HMRC had made an error (36%).

Just under half (46%) of Individuals gave a positive rating that information and services were tailored to them. This was a decrease from 2020 (52%).

Half (50%) of Individuals felt HMRC took their circumstances into account.

One in ten (14%) Individuals who interacted with HMRC reported that HMRC had made an error in their tax. Amongst those who reported HMRC made an error, over 3 in 10 (34%) gave a positive rating for how HMRC resolved the error, which was a decrease from 2020 (45%) and 37% said HMRC made the same error multiple times. Respondents who rated HMRC poorly at resolving an error (59% of those who reported an error was made) were asked whether they had considered making a complaint to HMRC: 4 in 10 (40%) said that they had either made or thought about making a complaint. This is 3% of all Individuals who interacted with HMRC.

4.4 Perceptions of HMRC’s reputation

This section examines Individuals’ broader views of HMRC as an organisation. They were asked to rate HMRC on the following:

efficient: HMRC is an efficient organisation that does not waste money
effective: HMRC ensures all its customers pay (receive) the correct amount of tax
fairness: HMRC applies penalties and sanctions equally for all of its customers
protection of personal data: HMRC ensures that customers’ data and personal information is treated confidentially
overall confidence: how confident are you in the way HMRC are doing their job
trust: HMRC is an organisation that I trust

These measures were asked of all Individuals, regardless of whether they had interacted with HMRC. Similar to previous years, ratings for these dimensions of reputation were lower than the dimensions of customer experience. Higher proportions of respondents were neutral or did not know compared with the customer experience dimensions.

4.4.1 Efficiency and effectiveness

A third (33%) of Individuals agreed that HMRC is efficient. This was in line with 2020 levels (33%).

Four in ten Individuals (39%) agreed that HMRC was effective. This was also consistent with 2020 findings (41%).

4.4.2 Fairness in applying penalties and sanctions

Four in ten Individuals (41%) agreed that HMRC applied penalties and sanctions equally. This was in line with 2020 (38%) and an increase from 35% in 2019.

4.4.3 Protection of personal information

Six in ten (63%) Individuals agreed that HMRC treats their data confidentially. This was consistent with 2020 and 2019 findings (66%).

Individuals who gave a positive rating for trust were more likely to give a positive rating on this measure (87%) than those who gave a neutral (40%) or a negative trust rating (26%). A similar pattern can be seen for those who gave a positive overall experience rating (81% compared with 46% neutral and 33% negative) as well as a positive rating for other customer experience measures such as ease of dealing with tax issues (81%), how personalised services were (88%) and time taken to reach an end result (77%).

4.4.4 Overall confidence in HMRC

Over 4 in 10 Individuals (45%) were confident in the way HMRC was doing its job, which was a decrease from 2020 (53%) and a return to 2019 levels (48%).

Ratings of confidence, efficiency, effectiveness and fairness were closely associated, as in previous years.

4.4.5 Overall trust in HMRC

A new question was introduced in 2021 asking Individuals to rate their trust in HMRC as an organisation. Half of Individuals (52%) gave a positive rating that HMRC was an organisation they trusted.

Individuals who reported HMRC had not made an error in their tax dealings were more likely to give a positive rating that HMRC was an organisation they trusted (59% compared with 37% of those who reported an error).

4.5 Perceptions of compliance

Each year the survey will look at different aspects of compliance. The 2021 survey looked at avoidance, asking for views on the acceptability and extent of tax avoidance and how effective HMRC is in preventing or reducing the extent of tax avoidance.

4.5.1 Acceptability and extent of tax avoidance

Individuals were asked how acceptable it was to avoid tax (this is exploiting tax rules to gain a tax advantage that Parliament did not intend, in other words, operating within the letter, but not the spirit of the law).

Three quarters (76%) of Individuals reported that tax avoidance was never acceptable. Two in ten (20%) felt that it was acceptable in some circumstances, whilst 3% said it was always acceptable. These findings remain consistent with 2020 (79%) and 2019 (74%).

Individuals were also asked how widespread they felt this type of behaviour was. Eight in ten (79%) Individuals thought tax avoidance was widespread, which was in line with 2020 (76%) and an increase from 2019 (70%).

Older Individuals aged 35-54 and 55+ were more likely to think this behaviour was widespread than those aged 16-34 (82% and 83% compared with 67%).

4.5.2 Effectiveness at preventing or reducing tax avoidance

Individuals were asked how effective they thought HMRC is in preventing or reducing tax avoidance. Four in ten (40%) thought that HMRC was effective. This represents a decrease from 2020, when half (48%) felt HMRC was effective in preventing or reducing tax avoidance.

Individuals who gave positive ratings of trust in HMRC were more likely to think that HMRC is effective in tackling tax avoidance (55% compared with 12% of those that gave a negative rating). A similar pattern can be found with those who gave a positive rating on their overall experience with HMRC (46% compared with 17% who gave a negative rating).

Question 5

5.  Small Business

Accepted Answer

Small Businesses were defined as businesses with an annual turnover under £10 million and between 0 and 19 employees. Almost half of Small Businesses surveyed had no employees (48%), and just over a third had one to 4 employees (36%). The remaining 16% had between 5 and 19 employees. Over half of the Small Businesses surveyed had a turnover below the VAT threshold (57%). 31% had a turnover between £85k and £500k, with 12% with turnovers of over £500k. Six in ten (59%) reported they were self-employed.

5.1 Agent usage

Small Businesses were asked whether they outsourced any of their tax affairs to agents. Seven in ten (71%) outsourced either some or all of their tax affairs, of which 32% outsourced all their work to agents and 39% outsourced some of this work. Three in ten (29%) did all work within the business.

5.2 Use of Covid-19 support schemes

Almost three quarters of Small Businesses reported that they had received support from one or more government COVID-19 schemes (72%). A third (31%) had been granted support through the Coronavirus Job Retention Scheme. Over a quarter (27%) of all respondents, and nearly half (45%) of self-employed small businesses (those eligible for the relief), had received support from the Self-Employment Income Support Scheme.

5.3 Channels used to interact with HMRC

Small Businesses were asked about the ways they had dealt with HMRC in the previous 12 months. Dealing with HMRC was defined as where they had made contact with HMRC, received information from HMRC or made use of HMRC’s online services.

Small Businesses continued to contact HMRC through a range of channels, with 81% interacting via multiple channels. This remains higher than those that used multiple channels in 2019 (74%) but lower than 2020 (85%). Small Businesses used the following channels to have contact with HMRC:

8 in 10 (82%) Small Businesses had online contact with HMRC.
7 in 10 (70%) searched for information on the HMRC webpages of GOV.UK
nearly half (49%) used the Business Tax Account
half (49%) had contact by post
a quarter (25%) had contact by telephone

The following proportions of Small Businesses had contact using online and telephone contact channels:

nearly 6 in 10 (59%) had contact through online channels only
a quarter (23%) had contact by online and telephone channels
2% contacted HMRC by telephone and did not use any online channels

The proportion of Small Businesses only interacting through online channels increased between 2019 (46%) and 2020 (58%) and this higher level has been sustained in 2021 (59%). Conversely, the proportion interacting by online and telephone channels decreased between 2020 (26%) and 2021 (23%). This decline was driven by:

Small Businesses with a turnover of more than £500k (41% in 2020 decreasing to 31% in 2021)
those with 10-19 employees (47% in 2020 decreasing to 33% in 2021)

Small Businesses that reported HMRC had made an error in their tax dealings were more likely to use telephone and online channels (52%) than those who did not report an error (19%). As in previous years, the smallest businesses were most likely to interact only through online channels.

Seven in ten (70%) Small Businesses contacted HMRC at least once in 2021. A quarter (27%) reported they did not interact with HMRC at all. The majority reported contacting HMRC between one and 4 times (44%) with 2 in 10 (18%) reporting they contacted HMRC between 5 and 10 times.

Small Businesses who had contacted HMRC by telephone and online channels were asked if they had called HMRC because they could not resolve the issue online. Seven in ten (70%) said they had called because they could not resolve the query online.

Qualitative interviews found that Small Businesses used the telephone after searching online channels for a number of reasons, including when they could not find the information online; wanted reassurance that information found online had been understood correctly; and where they had found conflicting messages online. Small Businesses preferred, if there were a problem, to resolve errors by telephone.

5.3.1 Rating of services

Small Businesses that had contact with HMRC over the phone were asked to rate their experience of the telephone helplines. Similarly, those that had a Business Tax Account (BTA), searched for information on HMRC webpages on GOV.UK or used any other HMRC online services were asked to rate their experiences of using these online services.

webpages: three quarters (74%) of Small Businesses gave a positive rating for HMRC webpages on GOV.UK in 2021, a similar level to 2020 (76%). Businesses that only interacted with HMRC online were more positive than those that interacted online and via telephone (76% compared with 68%)
other online services: 8 in 10 (79%) Small Businesses rated other online services positively, the same level as 2020
Business Tax Account: Small Businesses’ ratings of the Business Tax Account remained positive and stable at 81% in 2021, compared with 82% in 2020 and 79% in 2019

Qualitative interviews found Small Businesses saw several benefits to using online services, including quick answers, digital records of interactions, and the fact that information could be accessed at any time and read at their own pace, and is clearer and more consistent.

“It’s always worth spending half an hour, an hour trying to find the information [on GOV.UK] because you’ll learn something even if you don’t find the answer to your question”. (Small Business)
telephone helplines: 6 in 10 Small Businesses (59%) gave a positive rating of HMRC telephone helplines in 2021, close to levels in 2020 (61%) and 2019 (58%)

Qualitative interviews found Small Businesses saw several benefits to phoning HMRC. Whilst waiting times could be long, Small Businesses reported that call handlers provided many benefits: they gave clear information; could provide reassurance and sympathy; could access personal files; and businesses reported it was easier to resolve and answer specific issues or errors by phone.

“If I don’t feel I’ve really understood I like to talk to someone to confirm.” (Small Business)

5.4 Customer experience

Small Businesses were asked to rate their overall experience of interacting with HMRC based on all of their interactions over the last 12 months. Three quarters (76%) gave a positive rating. This was a decrease from 82% in 2020, but was in line with 2019 (75%) and 2015 (72%). Only 6% of Small Businesses rated their overall experience negatively. The smallest businesses were more likely to rate their overall experience positively. Amongst those with turnover up to £40k 85% gave a positive rating compared with 70% for businesses with turnover above £85k. Businesses that only contacted HMRC online were also more likely to rate their overall experience positively (80% compared with 66% who interacted online and by telephone).

5.4.1 Dimensions of customer experience

Small Businesses were asked to rate HMRC on a number of aspects of their customer experience. Positive ratings of nearly all customer experience dimensions decreased since 2020, with the exception of ease of finding information.

HMRC resolving queries or issues: Small Businesses were asked how good HMRC was at resolving queries or issues. Positive ratings declined from 76% in 2020 to 71% in 2021
time taken to reach end result: Small Businesses were asked whether the time taken to reach the end result was acceptable. Two thirds gave a positive rating (67%), which was a decrease from 76% in 2020. This remained higher than 2015 levels (63%). Negative ratings increased from 2020 (15% in 2021 compared with 8% in 2020)
clarity of steps needed to take: Small Businesses were asked whether they agreed that HMRC made clear the steps that needed to be taken. Seven in ten (71%) gave a positive rating, which decreased from 76% in 2020
HMRC systems prevented mistakes: Small Businesses were asked whether HMRC had systems which were good at preventing mistakes. Six in ten (59%) gave a positive rating, which decreased from 67% in 2020. Negative ratings (10%) were lower than 2019 (13%) and 2015 (15%)
HMRC staff professionalism: Small Businesses were asked whether HMRC staff were professional. Over 8 in 10 (85%) gave a positive rating, a decrease from 89% in 2020
getting tax transactions right: Small Businesses were asked how good HMRC is at getting transactions right. Three quarters (77%) gave a positive rating, a decrease from 81% in 2020
clarity when everything was completed: Small Businesses were asked whether HMRC made it clear when everything was completed. Over three quarters (76%) gave a positive rating, a decrease from 80% in 2020. One in ten (10%) gave a negative rating, which increased from 2020 (7%)
quality of information: Small Businesses were asked to rate the quality of information looked for or received from HMRC. Three quarters (73%) gave a positive rating, a decrease from 77% in 2020. Negative ratings in 2021 (9%) increased from 2020 levels (5%)

5.5 Views on administration of the tax system

Small Businesses were asked about their views on the administration of the tax system.

Small Businesses were asked whether HMRC treated their business fairly, and 8 in 10 (80%) gave a positive rating. This was a decrease from 85% in 2020 and similar to the 2019 level of 81%. There was a particular decrease in positive ratings amongst businesses with 10-19 employees, of whom three quarters agreed HMRC was fair in 2021, a decrease from 91% in 2020.

Small Businesses were asked how easy they found it to deal with business tax issues over the last 12 months. Almost three quarters (73%) gave a positive rating in 2021, a decrease from 77% in 2020, and close to the level of 2019 (72%).

Small Businesses were asked whether they agreed that information or services were tailored to their business in the last 12 months. Over half (56%) gave a positive rating in 2021, which was in line with 59% in 2020.

Small Businesses were asked whether HMRC recognised that their business was their priority. Six in ten (62%) gave a positive rating, and 7% gave a negative rating. Positive ratings were in line with 2020 levels (66%).

Small Businesses were asked whether they agreed that HMRC systems integrated well with the way their business managed its tax affairs. Seven in ten (70%) Small Businesses gave a positive rating. This was a return to 2019 levels (70%) after an increase (75%) in 2020. Positive ratings for how integrated HMRC systems were closely associated with positive ratings of personalisation (91%).

Small Businesses were asked whether they agreed that HMRC took their particular circumstances into account over the last 12 months. Six in ten (59%) gave a positive rating. This was a decrease from 69% in 2020. This change was driven in part by businesses with turnover above £40k (64% in 2020 compared with 53% in 2021).

Two new questions were introduced in 2020 to explore the extent to which HMRC is viewed as accountable. Small Businesses were asked whether HMRC had made errors with their business tax dealings and how well HMRC had resolved those errors.

One in ten (12%) Small Businesses reported that HMRC had made errors with their business tax dealings in the past 12 months. This was an increase from 8% in 2020. Experience of errors was associated with overall experience, with 82% of Small Businesses that did not report HMRC made an error giving a positive overall experience rating compared with 47% of those that reported HMRC made an error.

Small Businesses that reported HMRC made an error were asked how well HMRC had resolved the error it made. Three in ten (29%) Small Businesses gave a positive rating in 2021. This was a decrease from 40% in 2020. A third (32%) of Small Businesses that experienced an error said HMRC had made the same error multiple times.

Amongst Small Businesses that said HMRC made an error with their tax dealings and rated them poorly at resolving it, 40% made or were thinking of making a complaint.

5.6 Perceptions of HMRC’s reputation

This section examines Small Businesses’ broader views of HMRC as an organisation. They were asked to rate HMRC on the following:

efficient: HMRC is an efficient organisation that does not waste money
effective: HMRC ensures all its customers pay (receive) the correct amount of tax
fairness: HMRC applies penalties and sanctions equally for all of its customers
protection of personal data: HMRC ensures that customers’ data and personal information is treated confidentially
overall confidence: how confident are you in the way HMRC are doing their job
trust: HMRC is an organisation that I trust

Similar to previous years, ratings for these dimensions of reputation were lower than the dimensions of customer experience. Higher proportions of respondents were neutral or did not know compared with the customer experience dimensions.

5.6.1 Efficiency and effectiveness

A third (36%) of Small Businesses gave a positive rating for HMRC’s efficiency and one fifth (20%) gave a negative rating. The proportion that gave a positive rating that HMRC was efficient decreased from 2020 (42%) and returned to the 2019 level of 35%. Small Businesses with turnover up to £40k were more likely (43%) to give a positive rating of HMRC’s efficiency than Businesses with turnover above £85k (30%).

Half (52%) of Small Businesses gave a positive rating for how effective HMRC was. This was a decrease from 2020 (58%).

5.6.2 Fairness in applying penalties and sanctions

Four in ten Small Businesses (39%) gave a positive rating for how HMRC applied penalties and sanctions equally, and 18% gave a negative rating. Positive ratings were higher than in 2019 (35%).

5.6.3 Protection of personal data

Three quarters (76%) of Small Businesses gave a positive rating for HMRC ensuring customers’ data and personal information was treated confidentially, and 2% gave a negative rating.

5.6.4 Overall confidence in HMRC

Six in ten (63%) Small Businesses gave a positive rating of their confidence in HMRC in 2021. This was a decrease from 71% in 2020, but in line with 2019 ratings (61%). One in ten (10%) Small Businesses gave a negative rating, an increase from 2020 (6%).

Ratings of confidence, efficiency, effectiveness and fairness were closely associated, as in previous years.

5.6.5 Trust in HMRC as an organisation

In 2021, a new question was introduced asking respondents whether HMRC was an organisation they trust. Seven in ten (70%) Small Businesses gave a positive rating for their trust in HMRC. One in ten (9%) gave a negative rating.

5.7 Perceptions of compliance

As stated above each year the survey will look at different aspects of compliance. The 2021 survey looked at avoidance, asking for views on the acceptability and extent of tax avoidance and how effective HMRC is in preventing or reducing the extent of tax avoidance.

5.7.1 Acceptability and extent of tax avoidance

Small Businesses were asked about the acceptability of exploiting rules to gain a tax advantage that Parliament didn’t intend – in other words, operating within the letter, but not the spirit of the law. Over two thirds (69%) of Small Businesses felt that tax avoidance was never acceptable. This was a decrease from 73% in 2020, but the same level as 2019. One in twenty (6%) Small Businesses said tax avoidance was always acceptable.

Small Businesses were asked whether they thought exploiting rules for tax advantage was widespread amongst businesses. Four in ten (42%) felt this behaviour was widespread. This was an increase from 38% in 2020.

5.7.2 Effectiveness at preventing or reducing tax avoidance

Small Businesses were asked how effective they thought HMRC is at preventing or reducing tax avoidance. Half (55%) of Small Businesses surveyed thought HMRC was effective. This was a decrease from 2020 (60%).

5.8 Making Tax Digital

Making Tax Digital (MTD) is at the heart of the government’s 10-year strategy to build a trusted, modern, tax administration system that is more resilient, effective, and better supports taxpayers. MTD will make it easier for businesses to reduce common errors and to get their tax right first time. Under MTD for VAT, businesses with a taxable turnover above the VAT threshold (currently £85k) have been required to keep VAT records digitally and submit their VAT returns directly from their software, for VAT periods starting on or after 1st April 2019. VAT registered businesses with turnover below the VAT threshold have been required to use MTD from April 2022. In July 2020 HMRC set out its roadmap for the further rollout of MTD, with the introduction of mandatory MTD for Income Tax Self-Assessment (ITSA) from April 2024.

5.8.1 Awareness of MTD ITSA changes

Small Businesses were asked how much they knew about changes for self-employed businesses and landlords with annual business or property income above £10,000 where they will be required to keep their tax records digitally and file returns to HMRC directly through compatible software. This question was asked of Small Businesses who submitted self-assessment, thereby being more likely to be impacted by this new requirement.

Four in ten (44%) had at least heard of these changes. Half (54%) had not heard of these changes. Two in ten (20%) said they knew a little and 6% said they knew a lot.

5.8.2 How business keeps VAT records

Small Businesses that pay VAT were asked to describe the methods they used to keep VAT records. Eight in ten (79%) used record keeping software on a computer, 37% used spreadsheets, 31% used paper methods, and 15% used apps on a smart phone or tablet.

5.8.3 Benefits of MTD

Small Businesses that were aware of MTD were asked a series of statements related to benefits of MTD:

digital record keeping reduces the amount of time spent on tax: half (47%) agreed and 24% disagreed
digital record keeping makes tax more accurate: 60% agreed and 21% disagreed
digital record keeping makes preparing and submitting a tax return easier: 62% agreed and 21% disagreed

Question 6

6.  Agents

Accepted Answer

Agents are paid by customers – individuals or businesses – to represent them in dealings with HMRC. Over half of Agents surveyed classified their business as an accountancy firm (54%), 29% as bookkeeping firms and 17% were other types of Agent. Two thirds were members of a professional organisation (64%). Half had no employees (48%), a third (33%) had one to 4 employees, and 19% had 5 or more employees. VAT, Income Tax though Self Assessment and PAYE for employers remained the most common taxes with which surveyed Agents dealt. Two thirds of Agents (65%) received support from one or more Covid-19 support schemes.

6.1 Channels used to interact with HMRC

Agents were asked about the ways in which they had interacted with HMRC on behalf of clients in the previous 12 months. An interaction was defined as making contact with, or receiving information from HMRC, or using HMRC’s online services.

Channel use remained similar to 2020. Almost all Agents used online services (97%), the same proportion as in the 2020 and 2019 surveys. Agents used the following channels to contact HMRC:

searching for information on HMRC’s webpages (93%)
using HMRC online services (90%)
Three quarters (75%) of Agents used the telephone, a similar level to 2020 (73%).

Agents used online and telephone channels to have contact with HMRC:

almost three quarters of Agents made contact both online and by telephone (73%)
around one quarter used online channels only (24%)

These were similar levels to 2020 (72% and 25% respectively). Agents with employees were more likely (86%) to use both online and telephone than those without (58%), as were those with turnovers £60k or over (91%) compared with those with lower turnover (59%). Accountancy firms (85%) and other types of agents (72%) were more likely to use both telephone and online channels than bookkeeping firms (52%).

Most Agents (86%) who used both telephone and online channels had contacted HMRC by telephone because they could not resolve the issue online.

Agents who were negative about HMRC across a range of measures, including the ease of acting on behalf of their client, their overall experience of HMRC, and whether services were tailored, were more likely to have had to contact HMRC by telephone because they could not resolve their issue online.

6.2 Rating of contact channels

Agents were asked to rate their experience of using HMRC’s webpages, other online services and telephone helplines. Whilst ratings of online services have remained broadly positive, views of the telephone helplines have fallen.

webpages: 61% of Agents who had used HMRC webpages on GOV.UK rated them positively in 2021, an increase from 54% in 2019. Agents who contacted HMRC online only were more likely to give a positive rating (70%) for webpages than those who used both (59%)
other online services: Agents’ ratings of other HMRC online services decreased from 2020 (from 74% to 67%) but remained higher than 2019 ratings (61%). This fall was in part driven by smaller Agents with turnover below £60k (whose ratings fell from 82% positive in 2020 to 74% positive in 2021), and those who were members of a professional organisation (72% positive in 2020, dropping to 63% in 2021). Agents that contacted HMRC through online channels only were more likely (81%) to give a positive rating than those who used both telephone and online channels (63%)
Agents’ Dedicated Helpline: positive ratings of the Agents’ Dedicated Helpline decreased to the lowest levels since this study began to 36% in 2021. This was lower than 57% positive ratings in both 2020 and 2015.
other helplines: there was also a decrease in Agents’ positive ratings of other HMRC telephone helplines. In 2021, 26% rated them positively, a decrease from 35% in 2020 and 30% in 2019. Bookkeeping firms were more likely to give a positive rating for other helplines (35%) than accountancy firms (22%) or other types of agents (29%). Those Agents who gave a positive rating for the Dedicated Helpline were more likely (58%) to give a positive rating for other helplines than those who gave a negative rating of the Dedicated Helpline (4%)

6.3 Customer experience

Agents were asked to reflect on all of their experiences in dealing with HMRC on behalf of their clients over the previous 12 months.

Agents were asked to rate their overall experience with HMRC in the last 12 months. Half (48%) of Agents rated their overall experience positively in 2021. This was lower than 2020 (61%) and fell back to 2019 levels (51%).

Agents with a turnover of less than £60k were more likely to be positive about their experience (58%) than those with a higher turnover (34%). Bookkeeping firms were also more likely to be positive (60%) than accountancy firms (40%) or other types of agents (50%). Agents that were not members of professional organisations were more positive (61%) than those that were (40%).

Similarly, Agents only using online channels of contact were more likely to report a positive overall experience than those who interacted with HMRC both online and by telephone (74%, compared with 39%). It is important to note that those Agents who only used online channels were more likely to be smaller and have simpler interactions with HMRC, and so the higher positive ratings amongst these Agents could be connected to that.

6.3.1 Dimensions of customer experience

In line with overall experience ratings, Agents’ positive ratings for each of the dimensions of customer experience decreased since 2020, back to 2019 levels. Sub-group differences also showed a similar pattern.

resolving queries or issues: Agents were asked how good HMRC was at resolving queries or issues. The proportion of positive ratings declined from 53% in 2020 to 45% in 2021. This was similar to 2019 levels (46%). There was an association between positive ratings on resolving queries with a range of other aspects of customer satisfaction. Between 61% and 73% of Agents who gave positive ratings on personalisation of services, ease of dealing with tax issues and empathy also gave a positive rating for resolution of queries. Over half (54%) of Agents who rated the dedicated helpline poorly also gave a negative rating of HMRC’s resolution of queries or issues. The same trend was also evident for all other aspects of customer satisfaction in this section
time taken to reach end result: a third of Agents surveyed (31%) gave a positive rating of the time taken to reach the end result in 2021, a decrease from 41% in 2020
clarity of steps needed: Agents were asked whether they agreed with the statement that HMRC made clear the steps that needed to be taken. Half (53%) gave a positive rating in 2021, a decrease from 60% in 2020
ease of finding information: under half of Agents (47%) gave a positive rating for the ease of finding information on tax issues from HMRC, a decrease from 54% in 2020
HMRC systems prevented mistakes: the proportion of Agents that gave a positive rating that HMRC had systems which were good at preventing mistakes also decreased from 51% in 2020 to 39% in 2021
HMRC staff professionalism: staff professionalism remained the dimension of experience where HMRC was most highly rated by Agents. Seven in ten (70%) Agents gave a positive rating that HMRC staff were professional in 2021, a decrease from 78% in 2020
clarity when everything was completed: 6 in 10 (59%) Agents gave a positive rating that HMRC made it clear when everything was completed, a decrease from 67% in 2020
getting tax transactions right: Agents were asked how good HMRC was at getting transactions right. Six in ten (58%) Agents gave positive ratings in 2021 compared with 66% in 2020, returning to 2019 levels (57%)
quality of the information: Agents were asked to rate the quality of information looked for or received from HMRC. Six in ten (58%) gave a positive rating in 2021, a decrease from 66% in 2020

6.4 Views on administration of the tax system

Agents were asked about their views on the administration of the tax system. Specifically, whether HMRC treated their customers fairly; whether services were personalised to them and their clients; the ease of dealing with tax issues; whether Agents view HMRC as empathetic towards their clients and how well HMRC resolve any errors they make and whether errors had led to a complaint.

Agents were asked how easy they felt it was to deal with tax issues on behalf of their clients over the last 12 months.

Four in ten (43%) Agents gave a positive rating for ease of dealing with tax issues on behalf of their clients in 2021. This was a decrease from 55% in 2020 and 50% in 2019, to the level seen in the 2015 baseline survey (46%). This decrease was in part driven by:

Agents with no employees (63% gave a positive rating in 2020 compared with 51% in 2021)
Agents who gave a negative rating of the Agents Dedicated Helpline (26% in 2020 compared with 14% in 2021)
Agents who had contact online and by telephone (49% in 2020 compared with 37% in 2021)

Agents with turnover of below £60k were more likely (51%) to give positive ratings for ease than those with higher turnover (33%). Ratings of ease were much higher for Agents who had only interacted with HMRC online (69%) compared with 37% who interacted via online channels and telephone. Positive ratings of ease were also associated with positive ratings of overall experience, HMRC taking clients circumstances into account and whether services were tailored with between 75% and 56% giving a positive rating. These differences were similar for other areas of tax administration.

Agents who gave a negative rating for the Agents Dedicated Helpline (58%) were more likely to give a negative rating for ease compared with Agents who gave a positive (11%) or neutral rating (25%) of the Dedicated Helpline. Agents who reported that HMRC made an error with their clients’ tax dealings were also less likely to rate HMRC positively for ease (27% compared with 57% who did not report any HMRC errors).

Agents were asked whether they agreed with the statement that HMRC treated agents’ clients fairly over the last 12 months. Seven in ten (71%) gave a positive rating in 2021, which was below 2020 (76%), but still above 2019 (66%).

The following groups were more likely to agree that HMRC treated their clients fairly:

Agents with a turnover of £60k or below (78% compared with 65% for those with higher turnover)
Agents who were self-employed (74% compared with 66% for those with employees)
bookkeeping firms (78% compared with 69% of accountancy firms and 68% of other types of agents)
Agents who were not members of professional organisations (77% compared with 69% for those who were)

Agents were asked whether they agreed with the statement that information and services were tailored to the agent and the agent’s clients in last 12 months. Four in ten (42%) gave a positive rating in 2021, a decrease from 50% in 2020 but comparable with 2019 (41%).

This change was in part driven by:

those with a turnover of up to £10k (66% in 2020 compared with 51% in 2021)
who are self-employed (54% in 2020 compared with 46% in 2021)

Agents who were self-employed were more likely to give a positive rating for personalisation of services (46%) than Agents who were not (35%). Bookkeeping firms (55%) were more likely to give a positive rating for personalisation of services than accountants (39%) and other types of agents (31%). Agents who had only contacted HMRC online were more likely to give a positive rating (60%) than those who had used online channels and telephone (37%). Positive ratings of personalisation were also associated with positive ratings for overall experience (68%), resolution of queries (63%) ease of acting on behalf of clients (69%) and taking clients’ circumstances into account (60%).

New questions were introduced in 2020 to explore whether customers view HMRC as empathetic. They were created in line with the new charter which defines the service and standards of behaviour that customers can expect from HMRC. Agents were asked whether they agreed with the statement that HMRC took their clients’ circumstances into account over the last 12 months.

In 2021, 52% of Agents gave a positive rating that HMRC took their clients’ circumstances into account. This was a decrease from 57% in 2020.

This change was driven in part by bookkeeping firms (67% in 2020 compared with 55% in 2021). This marks a distinction from other questions where bookkeeping firms tended to have a more positive view of HMRC than other types of agent. The change was also driven in part by Agents who were not a member of a professional organisation (65% in 2020 compared with 54% in 2021). Agents without employees were more likely to give a positive rating than those with employees (58% compared with 49%).

Two new questions were introduced in 2020 to explore the extent to which HMRC is viewed as accountable. Agents were asked whether HMRC had made an error with their clients’ tax dealings in the last 12 months. If so, they were asked to rate how well HMRC resolved the error they made.

In 2021, 41% of Agents reported that HMRC had made errors with tax dealings in the past 12 months. This was an increase from 37% in 2020. Larger Agents with a turnover £60k or above, were more likely to report an error (57%) than those with lower turnover (29%). Less than a quarter of bookkeeping firms reported an error (23%), in contrast to half (50%) of accountancy firms and 44% of other types of agents. These differences in experience of errors may help explain why bookkeeping firms and Agents with turnover below £60k tend to have a more positive view of HMRC across a range of measures.

Agents who had experienced errors were asked how well HMRC had resolved the errors. Three in ten (31%) gave positive ratings in 2021, a decrease from 41% in 2020. Four in ten (42%) rated HMRC poorly at resolving errors in 2021, an increase from 34% in 2020. Over two thirds (69%) of those who rated their overall experience negatively also rated HMRC resolving errors negatively. Six in ten (61%) of those who gave a negative rating for ease of acting on behalf of their clients also gave a negative rating for HMRC resolving an error.

Of those Agents who had experienced an error, 44% said HMRC had made the same error multiple times.

Around half (47%) of Agents that had experienced errors have made or were thinking of making a complaint to HMRC. Agents who had made a complaint to HMRC were asked how easy it was. Three in ten (29%) gave a positive rating and 47% gave a negative rating.

6.5 Perceptions of HMRC’s reputation

This section examines Agents’ broader views of HMRC as an organisation. They were asked to rate HMRC on the following statements and questions:

efficiency: HMRC is an efficient organisation that does not waste money
effectiveness: HMRC ensures all its customers pay and receive the correct amount of money in taxes and benefits
fairness: HMRC applies penalties and sanctions equally for all its customers
protection of personal data: HMRC ensures that customers’ data and personal information is treated confidentially
overall confidence: How confident are you in the way HMRC are doing their job?
trust: HMRC is an organisation I can trust

6.5.1 Efficiency and effectiveness

Perceptions of efficiency were measured by asking Agents how strongly they agreed that HMRC is an efficient organisation that does not waste money. One fifth (21%) of Agents gave a positive rating, while two fifths gave a negative rating (41%). This contrasts with 2020 when 27% gave a positive rating and 34% a negative rating.

Negative ratings of efficiency were strongly associated with a negative rating of overall experience (86%), confidence in HMRC (91%), and ease of acting on their client’s behalf (77%).

Ratings of how effective HMRC was remained in line with 2020. Half (54%) of Agents gave a positive rating. Most Agents (86%) who felt HMRC was efficient also felt they were effective.

6.5.2 Fairness in applying penalties and sanctions

Respondents were asked if they think HMRC applies penalties and sanctions equally for all of its customers. Just over half (53%) of Agents gave a positive rating, and 18% a negative rating. This was an increase in positive ratings from 2020 (47%), and an increase in positive ratings and decrease in negative ratings from 2019 (40% positive, 26% negative) and 2015 (36% positive and 34% negative). Positive ratings for fairness were associated with a positive overall experience (62%).

6.5.3 Protection of personal data

Most Agents (80%) gave a positive rating that HMRC ensures that customers’ data and personal information is treated confidentially; 3% gave a negative rating. This was consistent with results in prior years.

6.5.4 Overall confidence in HMRC

Agents who gave a positive rating for their confidence in the way HMRC does its job decreased from 57% in 2020 to 43% in 2021, and was similar to the 2019 ratings of 45%. Three quarters (74%) of Agents who rated their overall experience of HMRC positively gave a positive rating for confidence in the way HMRC is doing its job compared with 15% of Agents who gave a neutral or negative rating for overall experience. Seven in ten (70%) of those that gave a positive rating for ease of acting on behalf of their clients gave a positive rating for confidence in HMRC compared with 21% who gave a negative or neutral rating for ease. Confidence was also higher amongst those Agents who felt HMRC was efficient, effective and fair.

6.5.5 Trust in HMRC as an organisation

Six in ten (61%) Agents gave a positive rating that HMRC was an organisation they trust. Agents with less than £60k turnover were more likely (66%) to give a positive rating than those with higher turnover (55%), as were those without employees (65%, compared with 57% for those with employees).

Those who gave a positive rating of their overall experience were more likely to give a positive rating for trust in HMRC (85%) than those who gave a neutral rating (51%) or a negative rating (24%).

6.6 Perceptions of compliance

As stated above each year the survey will look at different aspects of compliance. The 2021 survey looked at avoidance, asking for views on the acceptability and extent of tax avoidance and how effective HMRC is in preventing or reducing the extent of tax avoidance. The survey described tax avoidance as people trying to ‘exploit the rules to gain a tax advantage that Parliament didn’t intend – in other words, operating within the letter, but not the spirit of the law’.

6.6.1 Acceptability and extent of tax avoidance

In 2021, 64% of Agents said that tax avoidance was never acceptable, which was consistent with 2020 (60%). This opinion was more common amongst Agents with turnover of less than £60k (69%) than those with higher turnover (56%). Agents who were not a member of a professional organisation were also more likely to think tax avoidance was never acceptable (70%) compared with those who were a member (61%).

Just over half of Agents (53%) thought that tax avoidance was widespread in 2021. This was similar to 2020 (52%). This opinion was more common amongst Agents with turnover of less than £60k (58%) than those with higher turnover (48%). Non-affiliated firms were more likely to think tax avoidance was not widespread (41% compared with 32% of firms who were members of a professional body).

6.6.2 Effectiveness at preventing or reducing tax avoidance

Agents were asked how effective they thought HMRC is at preventing or reducing tax avoidance. Six in ten Agents (57%) thought HMRC was effective in 2021. This was similar to 2020 (55%). Those Agents who felt tax avoidance was not widespread were more likely to feel HMRC were good at tackling the issue (68% compared with 52% of Agents who felt tax avoidance was widespread). Agents who had a positive overall experience of dealing with HMRC were more likely to think it was effective at preventing tax avoidance (64%) than those who gave negative ratings (45%).

6.7 Making Tax Digital

Making Tax Digital (MTD) is at the heart of the government’s 10-year strategy to build a trusted, modern, tax administration system that is more resilient, effective, and better supports taxpayers. MTD will make it easier for businesses to reduce common errors and to get their tax right first time. Under MTD for VAT, businesses with a taxable turnover above the VAT threshold (currently £85k) have been required to keep VAT records digitally and submit their VAT returns directly from their software, for VAT periods starting on or after 1st April 2019. VAT registered businesses with turnover below the VAT threshold have been required to use MTD from April 2022.

In July 2020 HMRC set out its roadmap for the further rollout of MTD, with the introduction of mandatory MTD for Income Tax Self-Assessment (ITSA) from April 2024.

Agents were asked whether they planned to discuss the extension of MTD to all VAT registered businesses with clients who will be affected by these changes. Two thirds (64%) said they had already mentioned it to at least one of their clients and 10% said they had not yet but planned to do so. A small proportion (2%) said they would not mention it to clients before it was mandatory. Agents with over £60k of turnover were more likely (78%) to have spoken to clients about changes than those with lower turnover (56%). Accountancy firms were more likely to have already discussed MTD (71%) than bookkeeping firms (54%) or other types of Agent (60%).

6.7.1 Benefits of MTD for VAT

In the 2021 survey, Agents were asked about the benefits of making tax digital for VAT. Over 4 in 10 (44%) said there were benefits. The most common benefits of MTD were:

make it quicker to submit records (11%)
make it easier to audit (7%)
make it easier to share records (6%)
reduce the risk of error (5%)

Around one in ten (8%) said they did not know the benefits of MTD and nearly half (48%) said there were no benefits. This opinion was more common amongst Agents who gave a negative rating of:

their trust of HMRC (65% compared with 42% who gave a positive rating)
their overall experience of HMRC (66% compared with 40% who gave a positive rating and 47% who gave a neutral rating)
ease of dealing with HMRC when acting on behalf of their clients (60% compared with 41% who gave a positive rating)

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1. Executive summary