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.’