The International Monetary Fund (IMF) has upgraded its growth forecast for the UK economy this year.

The global institution upgraded its prediction for UK growth to 1.6% for this year from its previous estimate of 1.5%.

As well as upgrading its outlook for the UK, the IMF suggested the UK economy would perform better than European economies such as Germany, France and Italy over the next two years.

However, the latest IMF figures suggested the UK economy had weaker growth last year than the organisation had expected.

Rachel Reeves, Chancellor of the Exchequer said:

‘The UK is forecast to be the fastest growing major European economy over the next two years and the only G7 economy, apart from the US, to have its growth forecast upgraded for this year.

‘I will go further and faster in my mission for growth through intelligent investment and relentless reform and deliver on our promise to improve living standards in every part of the UK through the Plan for Change.’

Internet link: IMF HM Treasury

Parliament’s spending watchdog has accused HMRC of deliberately running down its phone services to force people to go online, according to a report.

The Public Accounts Committee’s (PAC) report into HMRC’s customer service levels found that the average call waiting time has passed 23 minutes.

It also found that 44,000 customers were cut off without warning after being on hold for more than an hour last year.

The report said:

‘HMRC’s customer services have deteriorated even further since this Committee last reported a year ago.’

It continued:

‘HMRC says it has not been adequately resourced to meet telephone demand from customers, but it must take responsibility for its own failings to offer sufficiently effective digital services to customers. We are concerned that it has sought to degrade its telephone service to drive taxpayers to digital channels.’

It added:

‘HMRC has been too willing to let its telephone services fail in the hope this forces people to use its digital services instead.’

The PAC report made this recommendation:

‘HMRC should ensure it understands how far its digital services can replace telephone services and what level of telephone service it needs to retain to meet customers’ needs – including those of small businesses. HMRC should ensure it meets a minimum level of service for all customers, including those seven million customers HMRC estimates can’t use digital services.’

Internet link: Parliament

The government has commissioned an independent review of the Loan Charge.

The Exchequer Secretary to the Treasury made a Written Ministerial Statement announcing that Ray McCann, a former President of the Chartered Institute of Taxation, would lead the review.

The review will examine the barriers preventing those who are subject to the Loan Charge but have not already settled and paid their tax liabilities in full from reaching resolution with HMRC. It will recommend ways in which they can be encouraged to settle with HMRC.

The reviewer will report and present their recommendations to the Exchequer Secretary to the Treasury by summer 2025.

However, the announcement drew criticism from campaigners.

Steve Packham, from the Loan Charge Action Group, said:

‘What the government has announced today is not a review at all, as it actually astonishingly excludes reviewing the Loan Charge. It is a complete sham and a betrayal of the promise made by Rachel Reeves last year.

‘The terms of reference start by justifying the Loan Charge and the whole approach taken and instead of being any review of the issue and scandal, is just about how people can be persuaded to give in and pay the unfair and disputed demands. This will not only not get to the truth, it will not resolve the matter and cases will unfortunately drag on and on.’

Internet link: GOV.UK Loan Charge Action Group

HMRC could save an estimated 1.7 million hours of call handlers’ time every year if it implemented an automated status tracking system, according to two of the leading bodies for tax advisers and chartered accountants.

A joint study by the Chartered Institute of Taxation (CIOT) and ICAEW tracked attempts to contact HMRC across phonelines and webchats for six weeks. It found that more than one-third of contact attempts were made to chase progress on existing enquiries, rather than to make a new enquiry.

The bodies say that, while improving customer service performance remained crucial, a significant reduction in the need for agents and taxpayers to contact HMRC in the first place was vital.

Only 33% of contact attempts to HMRC resulted in the query being fully resolved, the study found, with the average wait time across phone and webchat standing at 19 minutes.

The introduction of an automated tracking system to eliminate progress chasing calls could save more than 1.7 million hours each year, the equivalent of 1,000 full-time employees or approximately £36 million, CIOT and ICAEW said.

Additionally, an automated tracking system would reduce the number of staff needed to answer such calls, who could be redeployed elsewhere.

Ellen Milner, CIOT’s Director of Public Policy, said:

‘The report’s recommendations are practical solutions which can deliver significant improvements for agents and taxpayers.

‘Additionally, from an HMRC perspective, resolving issues with progress chasing alone has the potential to save them over £36 million a year in staff costs. This seems a good place to start for releasing funds for much needed investment in training and digitalisation.’

Internet link: CIOT

The UK government has launched a new Industrial Strategy Advisory Council which brings together business leaders from across the UK to offer advice.

The government says the Industrial Strategy will help maintain a pro-business environment to capture a greater share of internationally mobile investment and motivate domestic business to boost their investment and scale up their growth.

It will channel support to sectors and geographical clusters that have the highest growth potential for the next decade, the government adds.

Anna Leach, Chief Economist at the Institute of Directors said:

‘We welcome the launch of the Industrial Strategy Advisory Council which will offer independent advice and recommendations to government as it develops the Industrial Strategy.

‘It’s incredibly important to see the role of businesses in designing and delivering the government’s growth mission given prominence. An industrial strategy which embeds stability and long-termism alongside astutely targeted investments can play an effective role in driving this mission.

‘It is also good to see that the council will have a role in holding the government to account in the effective delivery of industrial strategy through data, analysis and reporting. We look forward to engaging with the new council in creating the conditions for businesses to thrive in the UK.’

Internet link: GOV.UK IoD