Spending Review: Could the taxman face the axe?

Tax chiefs have warned that HM Revenue & Customs cannot weather more cuts on top of the reductions it is currently forcing through.

The Comprehensive Spending Review later today will set out how the government intends to cut the UK’s bulging spending deficit, which will mean slashing budgets in government departments.

Chas Roy-Chowdhury, head of tax at ACCA, said: “If the government wants to fill the so-called tax gap and wants the tax system to operate effectively then they should not cut [HMRC jobs and budget].

“We have already seen at least 20,000 jobs cut since 2005 therefore HMRC have already done their part. We cannot see how HMRC will be able to cope if it has another 20,000 head count reduction.”

Chief executive Leslie Strathie has already warned that a commitment to deal with almost 18 million unresolved PAYE disputes piled up from before 2008 will not be met if the department is targeted in the CSR.

The Federation of Wholesale Distributors (FWD) also warned more cuts would be seriously damaging for HMRC, reported The Grocer.

FWD chief executive James Bielby said: “From our discussions with the department and anecdotal reports from wholesalers, it is evident that HMRC investigation officers are already stretched to full capacity.

“Any reduction in funding or staffing in this area is likely to be counter-productive since it will have a significant, and negative, impact on the ability of the department to combat fraud and collect significant sums of money for the UK Exchequer.”

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Further reading:

Spending review ‘cannot afford’ damage to tax collection

Small business hit hard by spending review