The taxman faces a raft of cost-cutting and efficiency savings during the next four years.
HM Revenue & Customs must reduce its resource spending by 15% in real terms by 2014/2015 to £3.2bn, and capital spending by 44% (to circa £100m from £200m).
Its administration budget will also be reduced by 33%.
The reductions will be achieved by restructuring HMRC’s enquiry centre network so face to face service is “provided to those that need it most”, according to the government. It will have to improve online support to reduce the need for manual processing, and apply benchmarks to reduce its administration costs.
It will adopt National Insurance number cards with replacement letters, saving up to £1m a year. Increased use of magistrate courts for recovering debt will also be explored.
A re-allocation of £900m HMRC funds will be invested on transforming HMRC’s work against avoidance, evasion and criminal attack to haul an extra £7bn in revenues a year by 2014/2015. The number of criminal prosecutions will increase fivefold, and a crackdown on offshoring evasion with the creation of a new dedicated team of investigators to catch those hiding money offshore.
A joint HMRC and the Department for Work and Pensions strategy will be set out to reduce fraud and error in the tax credit system by £2bn a year by 2014/2015.
Skills and capacity will be increase in key areas to offer a better service to customers, and redesigning education projects and processes that cause the most error and rework, such as VAT registrations.
It will attempt to clear the backlog of PAYE cases by 2012 and stabilise the PAYE service in order to recover and improve customer service.
The next stage of consultation on improving PAYE will begin, focusing on the use of real time information.
“HMRC will play a vital role in reducing the deficit, refocusing its resources to maximize revenues,” said Exchequer secretary to the Treasury David Gauke.
“It will become a lot harder for both individuals and companies to evade or avoid tax as HMRC refocuses to prevent this before it happens, and to deal with it more effectively when it does.”
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