The Public Accounts Committee has criticised HM Revenue & Customs for its "unacceptably slow" action against tax avoiders.
Margaret Hodge, chair of the committee, said the inaction was putting tax revenues at risk: "HMRC must do more, faster."
There is, of course, not a hope of that happening. The senior management of HMRC is only dedicated to reducing its staff number, and not to collecting tax. That is why the real tax gap is vastly higher than HMRC estimate, as I have explained here.
It is time it was realised that HMRC's refusal to collect tax has, under this government, been policy, and not chance. How could austerity be justified if tax could be collected instead?
I am aware of how provocative such a statement is but I now think it likely to be true. HMRC's approach to sacking staff, reducing its budget, refusing to properly calculate the tax gap and to be evasive on all issues relating to it can only suggest that there is ideological policy behind this approach, and I am sure that the ideology is that of austerity and shrinking the size of government because of a supposed shortage of tax revenues when in practice there need be no such shortage if only the appropriate resources to collect it were allocated to the task.
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I wonder how small tax credit over payments need to be before HMRC calls off its dogs?
I should point out that I am not advocating pursuing people for petty over payments, more that these are generally pursued with some vigor whilst tax evasion is regularly waived.
Richard,
Having recently retired from HMRC I think you are probably correct. The Large Business Service in particular seemed to be unwilling to carry out in depth transaction based on site auditing work at their “customers”. When I was involved in large business VAT audits some years ago there was a programme of regular visits to carry out detailed in depth analysis of transactions at all large businesses and millions of pounds of additional VAT was detected. Since the introduction of “Client Relationship Managers” the philosophy seems to be “we must not upset the customer”and a light touch approach is the norm. As for SME work HMRC seems to have all but abandoned the former regime of regular VAT inspections for all businesses in this sector which not only identified addtional tax but also had a healthy deterrent effect. The word soon gets round small businesses that HMRC are no longer carrying out regular inspections,so it is not surprising the tax gap has grown. Cutting staff numbers is a false economy.
Wholeheartedly agreed
Entirely agree, Richard, and you may recall this was something first discussed on this blog and through comments in the early part of 2013. I dare say in their defence the senior management of HMRC would remind us that as civil servants it’s their responsibility to implement government policy, and/or find ways to meet the targets and goals they are set, not to resist or argue against it. So, if the Treasury asks for a certain percentage of savings from each department (and earlier this week they did indeed ask departments to come up with suggestions for a further £25 billion in “savings”) then it’s their job to get on and find ways to deliver what’s being demanded.
Given that since May 2010 we’ve had a government whose approach is entirely ideology based (though they continue to claim policies are evidence based) then any response civil servants come up with (staff cuts, office closures, misrepresentation of facts and figures, etc, etc) is bound to be informed shaped and driven by the said idealogical (what you and most of us who read your blog refer to as neoliberalism, though often verging on neofeudalism). In this case that would be a loathing of anything that is a public service (remember the mantra, ‘private good, public bad’) and thus the destruction, or outsourcing and privatisation of government and any form of public good or service, to the point at which corporate control and, as importantly, profit taking from the state is absolute.
Unfortunately, one of the legacies of New Labour years was that many public servants, whether in HMRC, the NHS or elsewhere, particularly at senior levels became “entirely relaxed” with that ideology (to borrow a phrase from that paragon of neoliberalism, Peter Mandelson), and have thus reacted with some zeal to the demands of the current government.
Agreed
I don’t think its policy but there is an obsession with site closure and staff reduction at any expense. We should also mention the anti PCS (union) stance currently being taken.
There is a transformation happening in the digital sense but some of it is at the expense of core values and the basic job we are meant to do – collect the right amount of tax from individuals and companies.
Hi Richard, I found a lovely quote from Mr Justice Walton yesterday which illuminates upon this policy:
“…the Crown spends so much time and effort persecuting minnows that it is small wonder it has no energy left to pursue the real sharks”
Indeed….
I work for HMRC and over the years have seen the service depreciating in quality and resources – we are called a business now – we are not a business we are a service
It is the most destructive and non cost effective part of the cilil service ever
We have Lin Homer in charge of the department and that says everything
Dreadful place dreadful managers who basically enjoy blowing their own trumpets
Customer service doesn’t exist