Inland Revenue And Customs May Merge Following Review

by Robert Lee, Tax-News.com, London

04 July 2003

For the third or fourth time in the last 20 years (a mere blink of the eye in terms of the evolution of the taxing apparatus of the modern state) it has been suggested that the UK government may merge the Inland Revenue and the Customs and Excise Department following a review of the tax collection system recently announced by Chancellor of the Exchequer Gordon Brown.

According to Brown, the reason for the review is to "build on the success" of the two agencies rather than eliminate the deficiencies in the Inland Revenue department which have been very publicly exposed in the wake of the tax credit chaos and the Mapeley Steps affair.

The new system of child tax credits introduced in April this year has been plagued with problems since its inception with millions of families failing to receive their entitlements, which was largely blamed on the shortcomings of a new computer system. However, the crisis has also highlighted serious deficiencies in the lines of communication between government and the tax authorities, an issue which has also been highlighted in the Mapeley Steps deal, when the Revenue sold its offices to a Bermuda based firm before entering into a lease back deal with them.

Paymaster General Dawn Primarolo, the government minister responsible for the Inland Revenue, faced questions from a parliamentary select committee this week on the recent scandals that have enveloped the tax department, where it emerged that the minister had no knowledge of the sale of revenue property to Mapeley. Chairman of the Commons Treasury Select Committee, John McFall (Lab) commented that Mrs Primarolo had "ministerial responsibility, but not ministerial knowledge."

The review is to be overseen by permanent secretary to the Treasury Gus O'Donnell, though departmental officials have denied it has anything to do with the recent crises.

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