Cutting HMRC’s budget is not rational, according to the president of the Association of Revenue and Customs.
Graham Black has spoken out against the Treasury saying it is participating in the “economics of the playground” by reducing funding to the one government department that generates revenue. He pointed out that slashing the budget disproportionately affects the Revenue’s core work which is compliance.
The ARC claims that if the government pumped an additional £260 million into HMRC over the next few years, it would reduce the tax gap by £6 billion within four years. £24 million would pay for an extra 100 customer relationship managers and £36 million would buy 150 tax specialists who could challenge the tax returns of large organisations and reduce tax avoidance.
Mr Black made his comments in parliament during the ‘Tackling the Tax Gap’ seminar. However, Mark Garnier, a Conservative MP and member of the Treasury select committee, cautioned that proper costings need to be done to determine how much tax would be brought in through further investment.
Meanwhile, customer service at HMRC is unlikely to be up to scratch until at least 2013. Mike Clasper, the chairman of the Revenue told the select committee that he realised the level of service was currently unacceptable but this was caused by an eight year backlog of outstanding cases. These should be completed by the end of next year, he said.
Clasper claims that Revenue employees are not disengaged from customers; rather they are disenchanted with their work. Change is not managed well in the civil service and, in the case of HMRC, the right tools for change have not been provided, he added.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: Cut Lime by RLHyde
