The Public Accounts Committee has noted failures in HMRC's work in closing the tax gap this morning due to staff being diverted to tackle Covid fraud. As they noted:
HMRC has conducted substantially fewer enquiries into suspected non-compliance since the pandemic began. It closed 29% (103,000) fewer cases in 2020-21 compared with the previous year and opened 32% fewer (114,000).
As serious is how long investigations are taking. These are now very often far too protracted.
The answer is easy, of course. The PAC estimate the cost of this is £9bn. That's more than twice the cost of running HMRC a year. Just recruit more staff. Yet again, it's not rocket science, but the bleedin' obvious is not too regularly mentioned these days.
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The stupidity of cutting expenditure on HMRC never fails to amaze me.
If the Government really believes that taxes are necessary to fund public expenditure, why would they reduce the ability to bring in the necessary revenues? Of course it should be run efficiently, whatever that means, but investment yields a return.
It is almost as if they want HMRC to be unable to implement the tax laws that they have passed…
Indeed
At the risk of being dismissed as a conspiracy theorist, the Government’s underfunding of HMRC, the NHS, Local Government, education, the armed forces etc, etc only makes sense when Disaster Capitalism is take into account. Is it feasible that the government is so fixated on neoliberal theory that it can’t see the colossal damage being inflicted on the population and business? Or is it that the government has been “bought” by donors who stand to make fortunes out of the fire sales and mass poverty that will inevitably result from current policies?
I think we are past conspiracy theories now and have to deal with the obvious things we can see
“If the Government really believes that taxes are necessary to fund public expenditure, why would they reduce the ability to bring in the necessary revenues? ”
Because the don’t like taxes, and they don’t like Governments spending money. Politically the easiest (stealthy, unnoticed) way to reduce tax is not to cut taxes, but to deprive HMRC of the resources to gather them. Conservatives like PAYE because it is effortless to extract, but plitically hard the raise; it is totemic and very hard to do, which pleases low tax Government. Most other taxes require major HMRC effort, so if you starve HMRC of resources the tax take shrinks, people keep the money, and the Conservatives are delighted. The principle is simple: private sector, first and last and always. QED.
What do you think neoliberalism is for?
You are spot on
As the Inland Revenue is having problems now I wonder if there are any plans when in the foreseeable future the State Pension, now paid gross, will become taxable as the threshold is held down.
The state pension is taxable, but always treated as the first part of income for tax
Entirely due to the loss of many, many experienced investigators who have retired or taken redundancy in the last few years. Succession planning has never been taken into consideration and the number of staff who opted for redundancy on the closure of their local offices seemed to take senior management by surprise.
Agreed