Here is a recent article by Nick Huber
, published in
Accountingweb, in which I have made a wee comment.
HMRC has re-structured about every year since it was created in 2005. Will this one improve the service for taxpayers?
Accountants reckon that HMRC latest re-organisation may finally
improve the service to taxpayers and reduce bureaucracy. But will any
gains be undermined by a shortage of staff at HMRC after tens of
thousands of job cuts?
In October, HMRC’s four directorates will be reduced to three: Customer strategy and tax design, customer service and customer compliance:
- The customer strategy and tax design group will be led by director
general for business tax, Jim Harra. He will manage customer strategy,
tax policy, process design and tax assurance teams. This group will
manage customer service staff as well as specialist personal tax teams
and “product and process” staff
- A customer service group, run by current director general for customer services, Ruth Owen, will manage HMRC’s operational teams
- A customer compliance group, led by director general for enforcement
and compliance, Jennie Granger, will be responsible for compliance and
enforcement work across HMRC, including the large business operation
Mike Down, head of tax investigations at RSM, told AccountingWEB that
HMRC’s re-organisation would probably improve the service for
taxpayers, although it may be about two years before the benefits start.
“[HMRC] is trying to really focus on customers,” he said. “I think
it’s a simplification of the structure and they are trying to bring
together teams that are engaged in similar work and hopefully by doing
that they can improve the speed of response.”
Down said that the new customer compliance group, was part of an
effort to strengthen HMRC’s tax compliance teams, which check that
taxpayers are paying the correct tax.
HMRC has pooled resources in compliance and created specialist teams,
focusing on sectors of the economy or types of taxpayer − such as tax
avoidance by rich people (the ‘high net worth unit’).
HMRC’s new structure could help it get the full benefit of new
powers, such as against offshore evasion. Meanwhile, the move to a
digital tax system by 2020 may reduce some of the administrative strain
(and backlog of tax cases), it’s hoped, allowing HMRC more time to
improve its service.
Jonathan Riley, head of tax, at Grant Thornton UK, said: “Whilst we
await detail, it is encouraging that HMRC seems to be focusing on
strategy and design, suggesting HMRC may have greater connectivity with
policy formulation than has been the case in recent years. This move
combined with the Office of Tax Simplification being placed on a
statutory basis suggests we may be moving into an era where we consider
designing a tax regime that that works with and for business, allowing
them to unlock growth and help create a vibrant economy.”
Union concerns
But other experts doubted whether the re-organisation would do much good.
A spokesman for the Public and Commercial Services (PCS) union, which
represents HMRC workers, said that although it supported attempts to
improve tax compliance and customer service, it wouldn’t solve what it
said was one of HMRC’s main problems – too few staff.
HMRC has cut its workforce by about 45% since 2005, from 105,000 employees to 57,000, according to the PCS.
More job cuts are planned. By 2021, HMRC has estimated that it will
employ 16% fewer people then now, most of whom will work in 13 regional
centres.
“[HMRC] can re-organise all they like but if they don’t have enough
staff they won’t be able to do a proper job,” the PCS spokesman said.
Poor service
Customer service levels collapsed between 2014 and 2015
because HMRC underestimated demand for its telephone service and
reduced customer service capacity by cutting 5,600 jobs, the Public
Accounts Committee said in July.
Average call waiting times tripled compared with previous levels,
transferring an unreasonable cost to taxpayers, MPs on the parliamentary
committee said, although it said that the service has improved since
then.
Ken Frost, a chartered
accountant and acerbic critic of HMRC, said that he didn’t think HMRC’s
re-organisation would work because it was trying to do too many things
at once – including digitising the tax system, cutting costs and staff
and extending its telephone service.
Frost said that that a cabinet minister should be made solely responsible for HMRC.
Re-organisation fatigue
Some MPs want clarification about HMRC’s re-organisation.
Earlier in September, Andrew Tyrie, chairman of the treasury committee, wrote to
Jon Thompson, HMRC's chief executive and permanent secretary, to query
the justification for another re-organisation of the government
department.
"On Tuesday, I pointed out that HMRC had been reorganised to some
degree nearly once a year on average,” Tyrie said. “The last one was in
November 2015. On Wednesday, they announced another one.”
During the Treasury Committee hearing on the UK's tax policy and tax
base (on 6 September) Bill Dodwell, head of policy at Deloitte, said
that HMRC had re-organised about a dozen times since the Inland Revenue
merged with Customs & Excise in 2005.
“That sounds like quite a lot. Have there been too many
reorganisations, how is this affecting you as a recipient of their
product, and are they getting their objectives and priorities right?"
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