HMRC office closures threaten service levels, warn tax bodies

INSTITUTES and tax groups have expressed their concerns over the level of service HM Revenue & Customs will be able to provide after it was announced 170 of its local tax offices would be shut down.

The Daily Telegraph this week reported that the radical plan will leave towns and cities across the country without a tax office and is likely to lead to thousands of the tax authority’s 56,000 staff being made redundant.

According to the newspaper, the cuts are expected to be so severe that there will be no tax office in south-west England west of Bristol, with little or no coverage in East Anglia.

“Taxpayers and tax professionals alike will be anxious that a public body that is struggling to meet its public-facing service targets has announced that it is about to lose many staff and close its local offices,” CIoT president Chris Jones said. “It is crucial that HMRC retains as many appropriately qualified and experienced staff as it can.”

The tax authority has been heavily criticised on a regular basis, particularly by MPs in the Public Accounts Committee which this month described the number of prosecutions for offshore tax evasion as “woefully inadequate” in its latest report released this month.

The committee also raised fresh concerns over HMRC’s ‘customer’ service, saying it now considers it so bad it could be having “an adverse impact on the collection of tax revenues”.

The tax authority pledged in June to allocate £45m of its budget to improving its ‘customer’ service, as it released statistics that showed an inconsistent call handling performance in 2014/15.

The cuts could stretch HMRC to ‘breaking point’, the ICAEW warned, with its tax faculty head Frank Haskew claiming the move places “yet more pressure on an organisation that is not delivering the level of service taxpayers have a right to expect”.

“The UK tax system is already struggling to cope with the demands being placed on it,” he added. “Our tax code is overly complex and places a significant regulatory and compliance burden particularly on small businesses whose focus should be on contributing to economic growth.”

For its part, HMRC chief executive Lin Homer said the department has “too many expensive, isolated and outdated offices”.

“This makes it difficult for us to collaborate, modernise our ways of working, and make the changes we need to transform our service to customers and clamp down further on the minority who try to cheat the system. The new regional centres will bring our staff together in more modern and cost-effective buildings in areas with lower rents.”

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