Cost-cuts leave 100 jobs unfilled at HMRC

HM Revenue & Customs’ large business service, which collects about half of all UK business taxes and duties, is unable to fill 100 vacancies due to a cost-cutting drive.

A senior source within the LBS revealed that the efficiency drive, which will see HMRC cut 25,000 jobs between 2004 and 2010, has left it unable to fill 100 posts.

The severity of the funding situation was summarised in a presentation by large business service director Freda Chaloner at a ‘wider leadership team’ event in January to discuss 2009/10 financial plans.

Under the heading ‘Current financial position’, one slide read ‘CSR2007 sees year on year funding reductions; all scenarios are bleak’.

An HMRC spokesman refused to confirm or deny the figure of 100 unfilled vacancies.

Revelations that the specialist office is starved of cash could prove embarrassing for Gordon Brown ahead of next month’s G20 economic summit. The prime minister is expected to speak out against tax avoidance and call for a renewed international clampdown.

The 600-strong LBS is HMRC’s most effective arm in its battle against tax avoidance, recovering over £4bn last year through compliance work at a yield:cost ratio of greater than 100:1.

The staff handle the tax affairs of up to 700 company groups with the unit divided into 17 teams, based around economic sectors ranging from agriculture and food to transport and utilities. Client relationship managers report to the sector leader on individual companies.

An HMRC booklet on the LBS says: ‘On occasion, we will have different interpretations of the application of the law or accounting principles. We expect to devote a significant proportion of our intervention resource to identifying such situations and dealing with them promptly and efficiently to give greater certainty to both HMRC and our customers. Exceptionally, where agreement is not possible, we will seek resolution through the courts.’

The unit is also busy implementing the findings of former HMRC chairman Sir David Varney’s review of its relationship with large business.

In last November’s pre-Budget report chancellor Alistair Darling announced a further £5bn in efficiency savings across Whitehall, a chunk of which is believed to be earmarked for HMRC.