4-Year Plan For HMRC Published

by Robert Lee, Tax-News.com, London

10 November 2010

The Institute of Directors (IoD) in the UK has said that the UK tax authority, HM Revenue and Customs' (HMRC) business plan, released on November 8, to lay out a plan to tackle tax leakages and generate additional revenues for government coffers, should have been drafted long ago but is nevertheless better late than never.

Commenting upon the release of the report, Richard Baron, Head of Taxation at the IoD, said:

“We should be very concerned that key parts of the HMRC’s business plan do not yet exist and are only promised. Apparently HMRC will develop a change and delivery plan by February, and a plan to bring in an extra GBP7bn of tax revenue that will be ready by April. But the Chancellor has already decided to spend GBP900m on bringing in extra tax revenue. There ought to have been detailed plans in place before that money was allocated.”

“Overall the sentiments in the business plan are worthy, and the intentions are the right ones. In some areas, specific big tasks that will clearly take several months to perform are identified. Those tasks are sensible ones that could deliver real improvements, and the timescales are reasonable.”

“We also welcome the place of real-time PAYE information in the plan. IoD members tell us that reducing the administrative burden of PAYE is a high priority. This could help, so long as it is delivered in a way that fits smoothly into existing payroll processes. We look forward to the forthcoming consultation on the detail of implementation.”

The GBP900m in ring-fenced funding is, according to the plan, to be used “to tackle avoidance and evasion, attacks by organized criminals, and to improve [the authority's] debt collection capacity". This is to generate GBP7bn by 2014/15.

The tax man also plans to “tackle error and fraud in tax credits, reducing losses to no more than 5% by next year, and to sustain this level throughout the Spending Review.”

Under the plan, the Office of Tax Simplification will continue to receive funding to recommend ways to cut businesses' compliance costs with UK tax regulation.

Total funding for HMRC, as agreed with the Treasury, is to fall marginally over the four-year period from GBP3.7bn in 2010/11 to GBP3.4bn by 2014/15.

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