The All Party Parliamentary Group on Responsible Taxation has a new call for papers out. Their plan is to hold an inquiry into public confidence in HMRC's capability to collect tax fairly and effectively.
I submitted a response yesterday, which is here.
I said in response to the question 'What legislative, resourcing or other measures would help to narrow the tax gap?'
- Properly appraise the tax gap: no management is effective until it properly appraises the issues it faces;
- Set up an Office for Tax Responsibility to monitor the tax gap independent of HMRC management;
- Appraise the cost of all tax reliefs and allowances and eliminate as many as possible to reduce cost, remove loopholes and ease taxpayer life;
- Provide as many tax reliefs (pensions, charitable giving, etc.,) at just one rate to ease administration;
- Integrate Companies House and HMRC with one annual return required from all companies, without exception;
- Make the directors of companies who do not file required returns personally liable for all tax owing;
- Introduce annual automatic information exchange from UK banks to HMRC on bank accounts a company maintains, beneficial ownership of the company, trading addresses, known directors, and annual deposits;
- Consider requiring the same data for UK resident individuals;
- Require public country-by-country reporting for the behavioural change it will give rise to;
- Properly use naming and shaming powers;
- Require an HMRC office in every town of more than 100,000 people with an enquiry centre attached;
- Improve HMRC pay: make HMRC a viable career option once more;
- Set HMRC a task of maximising revenue, not minimising cost;
- Require a broad basis of representation on the board of HMRC;
- Equalise the rates of income tax and capital gains tax to minimise the incentive to tax abuse;
- Reduce the gap between income tax and corporation tax rate to minimise tax abuse.
There is a lot to do.
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I agree with all the points. But my reading of the current trajectory is: drill down/come down hard on PAYE people, automation, go easy on the corporates, tax farming. The final point is possible once you have automation fully in place & can then outsource what is left of HMRC. Very approximately we will be then sitting in 100AD & Rome. I hope this does not come to pass – but it looks to me that this is Tory policy – regardless of how they dress it up & I have zero confidence in the “All Parliamentary Group” – they will be ignored – just like all the others.
Sorry for the negativity.
I have more confidence: I have effected change
Richard
Exemplary!
A bulls-eye on every point IMHO.
It would be interesting to know whether you attach any priorities to your list and, if so, whether you’re willing to share them (although one could understand if you weren’t, if only for tactical reasons).
I’d probably not, for the reasons you note
One quibble, point 11. That would mean, for example, that the nearest tax office to Penzance would be Plymouth, 60+ miles away, and it would mean two offices 5 miles apart in Cheltenham and Gloucester. That’s not unique either: King’s Lynn is 35 miles from Peterborough, and 44 from both Norwich and Cambridge, the only other 100k+ settlements in its vicinity.
I’d argue for a formula of no more than 30 miles to nearest office/enquiry centre and staffing proportionate to the catchment population, certainly in England, possibly a little more for Scotland and Wales.
The rest in unexceptionable.
Good point
Accepted
Absolutely common sense – it is what we had back in the seventies when VAT was introduced and each local area had its own LVO (Local VAT Office)with locally based staff who knew the area and more importantly knew the local trading population and the tax was well controlled as a result
All excellent points.
And just to show that the HMRC’s lack of resources isn’t unique to them, ‘The Grocer’ has discovered that resources at the Food Standards Agency are so dire that they cannot continue with their general health inspection scheme and it has allowed the horsemeat seller, Tesco, to self regulate!
http://www.thegrocer.co.uk/opinion/columns/leader/tesco-the-horsegate-villain-rides-to-fsas-rescue/542766.article
The state has been hollowed out everywhere you look.
Absurd!
Dear Richard
I have worked in VAT over 25 years both HMCE, private practice and in-house. I have also sat on many national committees through the FSB and local authority experience with HMRC. I also worked for a big 4 firm so I know how things work. What you say makes much sense especially getting to grips with the tax gap. HMRC have always been poor at motivation and career development even now they are shutting offices without consultation with communities. Here in Sheffield they are closing the office, this in a city with a population of 400000 plus! The close involvement of big 4 firms to government allied to their blatant tax avoidance planning has never been dealt with at a political level, technical tax avoidance can often be circumvented. As far as ‘sweetheart’ deals go should HMRC be allowed to negotiate without a third-party involvement to vet such agreements? HMRC can always hide behind confidentiality so the public never get to know what has happened, transparency is needed. Brexit will creat resource problems as the VAT system adjusts how is HMRC going to cope as austerity cuts have caused real problems.
Thanks
And agreed re the last – VAT could be come a nightmare….