AdSlot1

Leader: Collecting tax is a dirty job, but someone’s got to do it

WANTED. A former civil servant with a thick skin, prepared to transform an famously demoralised and under-resourced government department while taking consistent – and very public abuse – from politicians, the profession and the public. Any takers? Anyone? Anyone at all?

Whoever steps in to the fill the space left by Lin Homer, the much maligned boss of HMRC who is to quit the tax authority in April, will inherit a most challenging position, not dissimilar to the one Homer inherited when appointed to the job in 2012.

Having spent the following four years of generally being told she is not up to the job, and with the colossal task of transforming HMRC into nothing less than “one of the most digitally-advanced tax authorities in the world”, Homer had clearly had enough. She is off to enjoy her £2.2m pension pot and recently acquired Damehood.

Clearly, the digitisation of the taxman will loom large for any successor. And it won’t be an easy job if past performance is anything to go by. The department is known for spending billions on white elephant IT projects, its implementation of real time PAYE had teething troubles and last year it emerged that millions of pounds were squandered on staff working on an outsourced HMRC tax credit contract because of a systematic IT failure. A tech-savvy candidate is essential.

Margaret Hodge, Homer’s former sparring partner as chair of the Public Accounts Committee, once warned that HMRC’s complacent approach to IT could reap havoc with the tax system. And that the taxman had demonstrated “little appreciation of the scale of the challenge it faces” in replacing its Aspire contract for maintaining its hardware and software by 2017.

The department must ensure that a sufficient (and cost effective) structure is in place and delivered to those taxpayers who will find the increasingly digital approach to tax assessment and collection too challenging and confusing.

Other challenges persist. Any new tax boss will need to establish a consensus upon the differing tax treatments of the employed, self-employed and those operating through personal service companies. Stephen Herring, head of taxation at the IoD, tells me that flexible labour markets and the digital economy will make the differing tax and, especially national insurance, treatments of these three groups an increasingly significant issue.

They must also recognise that, despite the G20/OECD BEPS initiative on tax avoidance, corporation tax will continue its fall as a percentage of total tax revenues raised for the Exchequer. Are sufficient alternatives being proposed to Treasury ministers?

Indeed, they must establish a clear vision of what is authentic and entirely appropriate tax planning as opposed to tax avoidance, which politicians and HMRC ought to continue to clamp down upon.

Any new candidate will have to conduct this business under the most intense, and often excoriating public scrutiny. Any takers? Perhaps, when it comes to the crunch, a nice pension and establishment gig makes the incredibly tough task an attractive proposition.

Richard Crump is editor across Accountancy Age and Financial Director

Related reading

/IMG/106/246106/tax-erase-remove-lower
/IMG/754/113754/paul-boyle-stepping-down-at-frc
/IMG/939/236939/bdo-logo-glass
paul-druckman