HMRC chief urged to press ahead with £11.5bn reforms

It probably seemed like a good idea at the time but HM Revenue & Customs officials may now regret announcing plans to save £11.5bn by transforming their department into a model of public sector
efficiency.

But, despite mounting doubts over whether HMRC’s £2.7bn investment in its transformation programme, the reforms have won broad support from senior figures in the accountancy profession.

Tax experts have urged HMRC’s new chairman Mike Clasper, a former private equity executive, to hold his nerve and press ahead
with reforms.

Andrew Hubbard, deputy president of the Chartered Institute of Taxation, said HMRC should stick to its original savings plan in order to minimise disruption to tax experts and business. ‘The last thing anyone in the profession wants is for HMRC to rip up its plans and start again,’ he said. ‘Any reform takes time and if you say you want a different set of principles it would take even more time.’

He said HMRC needed to ensure its organisational changes do not adversely affect its basic services, such as dealing with postal and phone enquiries efficiently.

A National Audit Office report earlier this month warned the ‘highly ambitious’ five-year transformation programme might not achieve its aims by 2011.

The spending watchdog said that government estimates of where most of the savings will come from ­ £6.3bn from an increased tax yield and around £4.1bn from ‘transaction savings’ to business and government ­ carried a ‘high degree of uncertainty’.

Paul Aplin, chairman of the tax faculty at the ICAEW, was broadly supportive of the HMRC reforms ­ but he said accountants were becoming impatient to see some benefits from the overhaul.

‘When you go through a programme of change this big you get some pain before gain. However I’d like to see some gain.’

Francesca Lagerberg, partner at Grant Thornton, described HMRC’s trans formation programme as a ‘monster’ of a project and said its managers need breathing space to make the changes.

‘The HMRC has already begun the long process of bringing themselves into the modern age,’ she said. ‘It’s a bit like turning round a tanker. It takes time.’