TaxAdministrationBudget follow-up: Tax departments’ merger confirmed

Budget follow-up: Tax departments' merger confirmed

The Inland Revenue and Customs & Excise will merge in what amounts to the biggest shake-up of the civil service for hundreds of years, the Treasury confirmed today.

Link: Budget 2004

Permanent secretary to the Treasury, Gus O’Donnell, recommended the merger shortly before chancellor Gordon Brown stood up to deliver his speech.

He pointed to three drivers for the change: a need to improve customer focus, the effectiveness of the two departments and their efficiency.

‘What we want to develop is a one-stop-shop so that business can get all of its answers from one organisation,’ said O’Donnell. He went on to say: ‘I think we should have done this a long time ago’.

‘This is a really big and important part of the public sector,’ he said before going on to say that the two departments are already changing. ‘This is a journey the department’s are already on,’ he said.

Chancellor Gordon Brown, making his Budget address, said the changes would result in 10,500 redundnancies and an overall budget reduction of 5%.

The Treasury has launched a recruitment drive to find the new head of the combined department. With an 8 April closing date for applications, the Treasury is looking to find a new chief as soon as possible.

‘Applications are now open for chairman of the new integrated tax department,’ said O’Donnell. ‘Clearly this is a big job and is open to both the public and private sector.’

The review team talked to the International Monetary Fund, the OECD and representatives from the private sector. Of a survey of the tax affairs of ‘well over 100’ countries only Israel and Malawi had a similar structure to the UK, and Israel is merging their departments as well.

‘We are recommending the integration of the two, so that will leave Malawi in splendid isolation,’ he said.

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