Despite hiring more senior staff, HMRC's productivity has declined, with compliance work generating only £1.27 million per staff member, down from over £1.4 million prior to the COVID-19 pandemic.

Overall, the PAC's findings reflect a critical need for HMRC to address its operational inefficiencies and restore public confidence.

Sir Geoffrey compared HMRC's situation to the Passport Office, which successfully transformed its digital services while maintaining security, suggesting that HMRC could adopt similar practices.

The PAC's report warns that without significant improvements, HMRC risks further alienating taxpayers and exacerbating the challenges of tax collection.

He emphasized the urgent need for HMRC to modernize its systems to effectively engage in the 21st century and suggested leveraging AI technology to overcome current challenges.

The PAC expressed concerns that declining taxpayer trust in HMRC could negatively impact compliance with tax obligations, potentially leading to reduced timely payments.

On April 30, 2025, the Commons Public Accounts Committee (PAC) released a report indicating that HM Revenue & Customs (HMRC) has become more expensive and less trusted, with tax collection costs rising by £563 million during the last parliament.

PAC chairman Sir Geoffrey Clifton-Brown criticized HMRC as a 'lumbering dinosaur' for its slow progress in modernizing IT systems, noting that 70% of its correspondence still occurs via post, which is both inconvenient and costly.

This report marks the second critique from the PAC in 2025, following an earlier report in January that highlighted deteriorating services eroding public trust.

MPs urged HMRC to learn from its digital initiative, Making Tax Digital, which has already imposed £300 million in additional costs on VAT-paying businesses and is projected to add another £200 million for income tax self-assessment.

The report also highlighted that HMRC's reliance on outdated systems hinders its ability to utilize new technologies like AI and increases vulnerability to potential misuse.

In defense of the agency, an HMRC spokesperson stated that it costs only half a penny to collect every pound of tax revenue and emphasized ongoing investments aimed at modernization and improving customer services.