How is the Revenue going to survive the spending cuts? Some advisers have suggested that it might roll out more amnesties in the hope of increasing cost efficiency.
Advisers expect to have a more strained working relationship with HMRC after the 15% cuts imposed last week in the Comprehensive Spending Review. This has led some advisers to predict that the Revenue will implement more amnesties, such as the Tax Health Plan, instead of embarking on costly programmes to weed out errant taxpayers. One adviser claims to have heard from a government source that the amnesties could even stretch to accountants and lawyers.
As of the beginning of this tax year (April 2010), HMRC employed nearly 69,000 people but around 13,000 jobs have to go by 2014/15. This will leave the Revenue hard pushed to deal with the large volume of information, and enquiries, it receives.
One cost cutting method has already been announced. Earlier this week, HMRC said that contact centres would stop Sunday opening as from the end of November.
Meanwhile, contractors who have been salting their money away in Swiss bank accounts may be interested to know that George Osborne is brokering a possible deal with Hans-Rudolf Merz, the Swiss finance minister. Matters on the agenda will include the untaxed money held by British citizens in Swiss banks.
A partner at the Swiss office of law firm Eversheds said he was surprised that the UK was the first nation to sign a basic agreement about untaxed money with Switzerland. He pointed out that the Channel Islands are world renowned for the legal possibilities available to people who want to hide money in trusts. And the construction of such a trust is more confidential than the secrecy that surrounds Swiss bank accounts.
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