HMRC needs to be in every town and city in the country

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I have posted this video on YouTube this morning. In it, I argue that over the last ten years or so, our tax authority has closed the vast majority of tax offices in the UK. No wonder we are not collecting large parts of the tax the country is owed. It's time these offices were reopened.

The link is here, just in case.

The transcript is as follows:

HM Revenue and Customs, our tax authority, should, in my opinion, be present in every single town and city of the UK. But it isn't.

When I started work as a tax practitioner in the 1980s, there was literally a tax office for almost every London borough, and every single UK city had one or more of what were called tax districts.

In every one of those districts, there was somebody called a district inspector. A person of great experience who understood the local economy of that area and knew who the rogues were.

There was a great advantage to having those officers. The knowledge that those local tax inspectors had, let them identify which accountants could be relied upon. And which couldn't. Which people were by and large reliable, and those who seemed to be spawning lots of dubious businesses. They could also know that there were problem sectors in their economy which were peculiar to the area. For example, in a fishing port, there would be a particular problem with fishing boats. Unsurprisingly. And they could have expertise in those in a way that, well, another area would not.

There was something else about having those local tax officers, which was really important. The local tax office could also provide taxpayers with face-to-face help. Quite literally, you could go in and say, “I have no idea what I'm doing. Can I please be assisted by you to fill in my tax return?” Or “Can you help me with understanding this piece of paper you've sent me”, or whatever it was. The taxpayer knew that they could get support from somebody who looked like a human being. That is no longer true.

In fact, it's not even true that for much of the year now, HM Revenue and Customs is planning to have tax office helplines open. I know they've relented at this moment, but they haven't guaranteed they're going to keep those helplines open forever.

So, what we've moved to is a situation where literally the Revenue was seen to be present in the communities who were being expected to pay tax, and was there to provide people with assistance so they could do so, to a situation where now the Revenue is in around 14 large offices around the UK, and some people live literally hundreds of miles from tax offices.

People in Cornwall, have a very long way to travel if they want to get to Bristol, which is their nearest tax office. People in the Shetland Islands are nearly 400 miles from their nearest tax office in Edinburgh or Glasgow. Now those are extremes maybe, but it's also true there isn't a tax office in the whole of East Anglia.

There is there one in North Wales. This is ludicrous. People can't get help, and unsurprisingly there's a consequence.

Over the last few years we have seen the amount of tax going unpaid by small businesses in the UK skyrocketing. 30 per cent of the tax liabilities now owing by small companies in the UK aren't paid. That's according to the Revenue's own figures.

They say it's only 18 per cent with regard to self-employed people, but frankly I think they're being optimistic there because it's not very long ago that that figure was also 30 per cent and I can't see why it's changed. So vast amounts of tax is not being paid.

I believe that if we spent £1bn more a year on reopening local tax offices, which would increase the costs of running HM Revenue and Customers by 20 per cent per annum, from £5bn to approximately £6bn a year, we would however collect an extra £10bn of tax, simply because that local knowledge would guarantee that local inspectors would know where to get it.

And, those people who need help would also get the assistance they require.

Why wouldn't you spend £1 billion to collect £10 billion extra in tax? That's my question. And I don't understand why they won't do it.

It's time the Revenue was seen back in our towns and cities.

There is more on this in chapter 15.4 of the Taxing Wealth Report 2024.

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