Complaints made by taxpayers about HM Revenue & Customs have climbed to their highest level in five years, with the proportion of cases resulting in compensation also reaching a recent peak.

New figures obtained under the Freedom of Information Act by the Contentious Tax Group show that HMRC received 93,589 complaints in the 2024/25 tax year, up from 78,542 in 2020/21, a rise of 19.2 per cent over five years.

The data suggests mounting frustration among taxpayers and advisers at a time when the tax authority has faced sustained criticism over service standards, processing delays and limited access to support.

The increase in complaints follows repeated warnings from watchdogs about declining performance levels at HMRC. In January 2025, the Public Accounts Committee said that telephone response times, often viewed as a barometer of service quality, had continued to deteriorate from an all-time low recorded the previous year.

Professional advisers say operational failings, including incorrect tax coding notices, misapplied adjustments and processing backlogs, are fuelling a cycle of error and complaint.

Andrew Park, tax investigations partner at Price Bailey, speaking on behalf of the Contentious Tax Group, said the trend reflected growing distress among taxpayers.

“HMRC is being forced to accept that an ever-increasing number of taxpayers are suffering worry and distress due to its action or inaction,” he said.

“Every year thousands of people suffer financial loss, wasted time and needless distress because HMRC struggles to deliver the basics.”

The rise in complaints has been accompanied by a marked increase in compensation payments. The number of cases in which HMRC paid redress rose by 35 per cent, from 11,333 in 2020/21 to 15,304 in 2024/25.

Over the same period, the proportion of complaints resulting in compensation climbed from 14.4 per cent to 16.4 per cent, the highest level in five years.

Of particular note is the rise in payments linked specifically to “worry and distress”, which has reached nearly 10,000 cases in the most recent year.

However, while more taxpayers are receiving compensation, the average payout has fallen. In 2024/25, the average redress payment stood at £125.27, the lowest average figure across the five-year period.

“Most taxpayers complain simply to get errors corrected,” he said. “Yet poor service levels can cause financial losses that dwarf the modest compensation HMRC is willing to offer.”

Tax specialists argue that complaints about service standards cannot easily be separated from substantive tax disputes. Mistakes in coding notices, delays in processing returns and system errors can lead directly to incorrect tax liabilities, and additional financial stress for individuals and businesses.

“Operational failings can be a major driver of tax errors that contribute to rising complaint volumes,” Park said.

In many cases, taxpayers are forced to invest significant time, or incur professional fees, to resolve issues that stem from administrative mistakes rather than disputes over tax law.

The Contentious Tax Group also highlighted concerns that HMRC’s continued push towards digitalisation may be exacerbating the problem.

The tax authority has increasingly encouraged taxpayers to use online systems and automated services, positioning digital transformation as the long-term solution to resource constraints and performance challenges.

Critics, however, warn that traditional support channels are being scaled back before digital alternatives are fully reliable.

“HMRC is pushing taxpayers towards digital systems that are not yet ready, while withdrawing the human support people still need,” Park said. “This is a combination that risks compounding operational difficulties and driving complaints even higher.”

As HMRC prepares for further reforms, including the expansion of Making Tax Digital requirements to additional groups of taxpayers, advisers fear complaint volumes could rise further if service capacity does not improve.

With nearly 94,000 complaints lodged in the past year alone and compensation levels at a five-year high, the figures underline the growing pressure on Britain’s tax authority to restore confidence in its service delivery.

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.

There are now calls to launch criminal investigations against mosques in Australia that opted to honour Ayatollah Ali Khamenei.

Iran state media confirmed that Khamenei was killed in his office on February 28 as the United States and Israel launched strikes aimed at Iran.

Mosques Honouring Khamenei Face Criticism

According to a report by Sky News, Co-Chief Executive Officer of the Executive Council of Australian Jewry Alex Ryvchin said mosques that honoured Khamenei should be subjected to criminal investigations.

“We cannot allow terrorists to be glorified in our country or for such actions to occur without consequence,” Ryvchin said in a post shared on social media.

“We have seen where brazen support for terrorism and glorification of violence can take our country,” he added.

Australian Iranian Community Alliance Vice President Suren Edgar also reacted to the tributes, calling the support for Khamenei “scary,” according to a report by news.com.au.

“That’s shocking. That’s not our community — that’s the ideology we’re fighting, and unfortunately, we see many supporters of the ideology here in Australia,” Edgar told news.com.au.

He added, “Thousands of people came to the streets to celebrate (Khamenei’s death) yesterday — this is our community.”

What Mosques Have Been Saying About Khamenei

In the wake of Khamenei’s death, multiple mosques across Australia sent their messages of condolences.

Among the mosques that have done so are Masjid Arrahman Mosque in Kingsgrove and Husaineyat Sayeda Zaynab in Banksia.

The likes of El Zahra Community Centre in Hoppers Crossing, Victoria, and the Zainabia Islamic Centre in Brisbane have announced that there will be memorials that will be held in honour of Khamenei.

Posting on social media, the Al Zahra mosque in Sydney, said it will be holding a vigil in “honour of the martyrdom of his eminence, the guardian jurist and supreme leader of the Islamic revolution.”