Merger of Revenue and Customs called for by MPs

The plan for a huge shake-up of Britain’s tax authorities has come from theinfluential Treasury Committee at the end of a three-month inquiry during whichthey were refused sight of a key report opposing the idea ‘done veryconfidentially’ in 1993 for the last Tory Government.

The committee – who took a strongly critical look as the way Customs has been run- also attacked avoidance schemes ‘devised by accountants which have nocommercial justification except to dodge VAT obligations.’

It said Customs has a duty to protect the revenue and expressed concern thatneither taxpayers nor Customs staff have a clear idea of what the departmentconsiders avoidance to be.

The committee, with a Labour chairman and government majority, said a merger ofthe two departments must be carefully planned to minimise the impact ontaxpayers and departments’ work programmes.

It claimed a ‘window of opportunity’ for merger would exist after the Revenue hadintegrated the Contributions Agency, and called for the boards of Customs and the Revenue to bemerged as a first step.

The committee’s report stated: ‘We believe the merger of the Revenue and Customs wouldimprove compliance with taxation, reduce businesses’ compliance costs and reducethe Government’s revenue collection costs and we recommend that such a mergershould proceed and that the Government should bring forward a plan for themerger in accordance with our conclusions and recommendations.’

Their proposal follows a visit to Canada where the two tax-gathering arms weremerged in 1993 – they were critical of Paymaster General Dawn Primarolo’sfailure to learn Canada’s lessons too.

In evidence Dame Valerie Strachan, in one of her last tasks as head of Customs,claimed merger would take up senior management time and detract from other vitalwork, and even Mike Fountain, chief executive partner, UK Indirect Taxes, ofPricewaterhouseCoopers, said business did not want the disruption a full-blownmerger would cause.

But Edward Troup, head of tax strategy and Simmons and Simmons, said a mergerwould bring a reduction in compliance costs and better policy advice and theInstitute of Directors wanted a single point of contact with special: BLASTING THE TAX SYSTEM -TIME TO CUT THE COMPLEXITY

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