New UK Tax Department Will Need 'Enormous' Amounts of Management, Says O'Donnell

by Robert Lee, Tax-News.com, London

30 April 2004

If a merged Inland Revenue and Customs and Excise are to function properly and efficiently and not repeat previous mistakes, the new tax department that is created will need “enormous amounts of management attention”, the Treasury’s chief civil servant Gus O’Donnell revealed on Wednesday.

Of particular concern is the management of the new super-department’s information and technology systems, and the government will be keen to avoid a repeat of the tax credit debacle when thousands of people were prevented from collecting the credits as a result of a failure of the Inland Revenue's computer system.

Customs and Excise has also had its fair share of embarrassing episodes, including the miscalculation of official export figures by £2 billion last year, according to the Telegraph.

Question marks additionally remain over the enforcement powers of the new department. Currently, customs officials have powers to search premises without permission, but it is unclear whether such powers will be extended to Revenue staff.

Addressing the Commons Treasury sub-committee this week, O’Donnell, who led a government review which ultimately recommended the merger of the Revenue and Cusotms, admitted that the full consequences of the move have yet to be thought out.

However, he argued that the new department should be more efficient and will cost the British taxpayer less to run. He also told MPs that it will be more effective in reducing the UK’s £26 billion in uncollected tax.

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