HM Revenue & Customs admit the UK tax gap exceeds £35 billion a year.
I argue it exceeds £95 billion on top of which there is a mountain of tax paid late.
And yet the BBC are reporting that:
More than 700 jobs are under threat in three tax offices in north-west England, the Public and Commercial Services (PCS) union has said.
Consultation has begun with staff in Bootle, Merseyside, Preston in Lancashire and in Salford.
HM Revenue and Customs (HMRC) is deciding whether 3,900 fixed-term contracts across the UK should be terminated when they end in March 2014.
If anyone can see any logic in laying off tax staff when there is money to be collected perhaps they'd like to explain what it is.
As far as I can see, this is simply a case of the government not wanting to collect tax because that way they can impose cuts, shrink the state and impose stress on those Boris Johnson likes to abuse. I am quite sure these events are connected and that's why I oppose all such cuts.
And yes, I will add that i work with PCS: I'm proud to do so because they and the FDA are seeking to uphold the tradition of the civil service in this area.
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Nice to be able to say that I just absolutely, completely, 100% agree with you…
🙂
The jobs are being cut because of pure dogma (started by Thatcher, continued by New Labour and embraced with redoubled vigour by the ConDems): we’re told that we have to cut x% of jobs from all public sector departments per year to make them “more efficient”. No matter that the number of people employed by HMRC is certainly way below the number that would maximise net revenue to HM Govt (taking into account additional tax yield per HMRC employee minus employment costs); we need a leaner, meaner public sector because the Neoliberals Said So. And so tax avoidance and evasion continues – worsens, indeed – across the board.
The current delay on even opening written correspondence at HMRC is four weeks. The disconnect between the collection and the payment sections is appalling. They seem incapable of communicating and the only way to deal with it as a customer is to copy both in to your letters and to those from each side of HMRC as if you don’t decisions made by the collection service will not be communicated to payments with dire results. Cutting staff will further denigrate an already stretched service.
If anyone can see any logic in laying off tax staff when there is money to be collected perhaps they’d like to explain what it is.
Because this was Gordon Brown’s plan when he merged IR and Customs. That the two organisations into one would lead to requiring fewer people in the one organisation than had been employed in the two.
And in 2005 yields were rising
And there was an undoubted need for automation – which has happened
Do you always stick to a plan when it is no longer working?
If this is the level of crass comment you can offer Tim please don’t call again
Ah yes, the familiar reply of the right to any problem; “it’s all Gordon Brown’s fault”. You are correct that he started off with this stupid policy, but this government, who like all right wingers are convinced the public sector is too large, are continuing the policy with enthusiasm, as well as worsening the T&C of HMRC staff and imposing a pay freeze and hikes in pension contributions that have led to a substantial real terms fall in our take home pay.
The mantra is ‘you have to do more with less’. That might work in an industrial process producing products using robots, but collecting tax means dealing with human beings. Tax avoidance and, in particular, tax evasion are very resource intensive in man hours. HMRC needs more well trained, motivated and reasonably paid staff, not fewer demoralised, overworked ones.
I’m sorry richard, I’m not sure I understand you here. The 2005 plan was indeed to reduce the new, combined HMRC staffing level by about 25,000. The present round of cuts, of which incidentally I wholly disapprove, is still very small compared with that.
You’re not saying that was the right thing to do are you?
The current round is part of a plan to reach 55,000 and then to go further
There were 100,000 in 2005
Do the maths
Yeah, read my comment, I disapprove!
But then I didn’t agree with the earlier job reductions either – and I said that too.
Would you like to follow me in criticising the plan – from its inception?
I am sorry if I misinterpreted your comment
The threat to the fixed term staff in the NW is just part of it. HMRC has also made a major offer of voluntary exits targeted on particular offices, including to virtually all staff in 20 offices. Quite apart from the political attacks HMRC is controlled by aggressive centralisers who want to get rid of every one, whatever their skills who are not in the preferred big cities. Staff are panicking and see this as closure by stealth. The plan is that HMRC hope that enough staff will leave in smaller locations for them to declare them unviable. They also want to close collection offices. In offices like Merthyr, Bishop’s Stortford and Irvine nearly all those they ant to push out work on compliance. They are deliberately targeting compliance offices despite the politicians statements that they want to improve compliance.
I agree
I am shocked by this programme of which I learned a lot more today
“As far as I can see, this is simply a case of the government not wanting to collect tax because that way they can impose cuts, shrink the state and impose stress on those Boris Johnson likes to abuse. I am quite sure these events are connected and that’s why I oppose all such cuts.”
You have answered your own question! 😀
Incidentally, are these tax jobs going to be outsourced to the private sector? If so, it brings up all manner of worries!
Richard
Many thanks for all your hard work in supporting the PCS campaigns for Tax Justice and to keep experienced staff in post.
As one of those affected here in the West Country it makes no sense and HMRC are seeking savings before they know their “digital by default” strategy will actually work and deliver the benefits.
As you are constantly pointing out – there are billions of pounds in unpaid tax – surely now is not the time to get rid of experienced staff (this includes compliance staff on some sites) and the West Country will be totally decimated by the announcements. The confirmation of the closures will come in February 2014 along with the closure of all the UKs enquiry centres.
Good luck Paul
I believe HMRC staff do a vital job and deserve the support of all in the UK
Not really any surprises though.
All of this was foreseen in the various committees that examined the merger proposals.
But, since HMRC has been captured by those it should be capturing, it is hardly surprising.
If you have a prison run by the inmates you can hardly be surprised when they open the doors and go home.
http://www.publications.parliament.uk/pa/cm200304/cmselect/cmtreasy/556/556.pdf
Never forgetting that the merger also meant that information previously held by each, and non-interchangeable because of data protection problems, then became accessible to the combined forces!
Right.
Having said that I don’t agree with the staff reductions, I’ll say why: because if we want to close the tax gap (and we do!) then we need the staff.
But here’s the rub: I am entitled to call for the tax gap to be closed because I have a clear view of the fiscal need to close the tax gap (and yes, you can go ahead and shout ‘neoliberal’ again if you want; it seems to be your only response). I have never heard Richard Murphy though provide a FISCAL analysis of the need to close the tax gap. Can he?
He could
There may well be others better able
Do we need a fiscal reason to tackle crime and meet Sicily need though?
OK, It’s a good question “I am entitled to call for the tax gap to be closed because I have a clear view of the fiscal need to close the tax gap (and yes, you can go ahead and shout ‘neoliberal’”
Do those of us who are not neo liberals have a right to suggest policies to close the tax gap? If we believe the problem is exaggerated and an upturn will provide the money to balance the books, while the debt will eventually inflate away like the old World War 2 debt has?
Yes.
The political challenge of what are you going to do with the debt/deficit won’t go away. We’d be crazy to ignore the failure to collect all that is due from the wealthy when that makes such a large and obvious contribution to getting rid of that challenge.
There is a widespread consensus that additional revenue from proper enforcement is additional money to spend (or give away in tax cuts).
Confidence is part of the equation, and this may depend on a belief that the deficit is being tackled whether it is really necessary or not.
But above all it is right that the wealthy and powerful should pay their fair share, rather than being able to avoid it.
We do need a fiscal and economic reason to impose taxes in the first place. If the only reason we have HMRC is to stop people avoiding taxes, the original need for which we can’t explain, well that would be a pretty pass.
As I say, I am very clear on the need for taxes and from there the need to collect them efficiently, consistently and fairly, making sure everyone pays their fair share.
These comments are absurd
Are you really saying that in the time you have read this blog you have noted noted me argue for the benefits of public spending?
If not – just go away and read again
Start here http://classonline.org.uk/docs/2012.05.24_Richard_Murphy_-_Towards_a_new_tax_consensus_-_embracing_progressive_taxation.pdf
I agree with most of the above – so far this year although working part time I have personally identified around £350k additional VAT due – which demonstrates how valuable we are – yet in my office there are 50% less staff than there were 10 years ago. The problem is that the management of HMRC will say that the yield from compliance work is increasing despite staff reductions – but I believe they use some very dubious figures in trying to demonstrate this.
I have read your comments, as well you know. You also know very well that you have embraced a number of concepts that divorce spending from colelction: MMT, increased borrowing – refering to those who disagree as “debt fetishists2 – and also “Green Quantitative Easing”. Indeed, connected to this last, you have argued that gov’t debt acquired by a central bank isn’t debt at all.
So I ask again, what do you see as the fiscl and economic reason to be concerned with the tax gap?
P.S. Do you really find my belief in “the need for taxes and from there the need to collect them efficiently, consistently and fairly, making sure everyone pays their fair share” absurd?
If I knew what you were asking and why it would help
But candidly, I don’t
You have an agenda here I am simply not getting
Maybe I’m being thick – how know, it’s possible – but right now I think you’re asking a non-question and I have no time for that