Customs And Revenue Merger May Not Bring About Positive Change, Government Warned

by Jason Gorringe, Tax-News.com, London

11 March 2004

A prominent UK accounting and tax expert has warned the government that the likely merger between the Inland Revenue and Customs & Excise may not iron out the problems it is hoping to solve by creating one monolithic tax collector.

Chancellor Gordon Brown is widely tipped by observers to announce the merger of the departments in next week’s budget, following the publication of a review by the Treasury’s top-ranking civil servant, Gus O’Donnell.

The review was called for after a series of well-publicised blunders by both departments, such as the Revenue’s mishandling of the new child tax credits and the collapse of a high profile court case against fifteen men accused by customs of evading alcohol duties. By slimming down the system to entail just one tax collector, it is felt that future mistakes will be reduced, and more tax collected for less cost.

However, Mark Lee, chairman of the tax faculty at the Institute of Chartered Accountants in England & Wales, warned: "A premature move towards a merger now would be counter-productive," according to the Daily Telegraph.

Whilst Mr Lee said he recognised the “laudable” aims behind the proposals, he commented that the move may ultimately just “paper over the cracks” that exist in the two organisations.

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