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HMRC Announces Modernization Program

by Robert Lee, Tax-News.com, London

13 November 2015


UK tax authority HM Revenue and Customs (HMRC) has announced that it is to close 137 offices over the next 12 years and create 13 new "regional centers" by 2021.

The plans form part of a modernization program that, according to the Department, will enable it to give taxpayers the modern services they expect, and at a lower cost. The changes are expected to generate savings of GBP100m (USD152m) a year by 2025. HMRC currently has 170 offices and 58,000 full-time equivalent staff.

The regional centers will vary in size and in terms of the mix of operational, tax professional, and corporate services work they conduct. The smallest will be served by between 1,200 and 1,300 full-time equivalent staff, and the largest, operationally-focused centers will hold more than 6,000. The first center will open in 2016-17, and others will follow between 2017 and 2021.

The offices earmarked for closure will be shut as lease breaks arise or at the end of HMRC's contract with Mapeley in 2021. HMRC said it expects the majority of staff will be able to move from their current offices to a regional center, and is phasing in the moves in order to minimize redundancies. It will however aim to have fewer staff in the future.

HMRC Chief Executive Lin Homer said: "HMRC is committed to modern, regional centers serving every region and nation in the UK, with skilled and varied jobs and development opportunities, while also ensuring jobs are spread throughout the UK and not concentrated in the capital. HMRC has too many expensive, isolated, and outdated offices. This makes it difficult for us to collaborate, modernize our ways of working, and make the changes we need to transform our service to customers and clamp down further on the minority who try to cheat the system."

"The new regional centers will bring our staff together in more modern and cost-effective buildings in areas with lower rents. They will also make a big contribution to the cities where they are based, providing high-quality, skilled jobs, and supporting the Government's commitment for a national recovery that benefits all parts of the UK."

The Institute of Directors welcomed the plans. Stephen Herring, Head of Taxation, commented: "The announcement of another HMRC restructure will be met with predictable concern that fewer people answering calls could result in lower revenue. But that simply need not be the case. The number of employees should not be seen as a proxy for HMRC's effectiveness as a tax collector. The United States' Internal Revenue Service serves a population five times the size of the UK, but has only 60 percent more staff. In closing the tax gap by GBP11bn in the last decade, and halving the amount of corporation tax which goes missing, HMRC has shown the way forward by redeploying staff and focusing on modern ways of collecting tax."

"Automation, digitization and the roll-out of online filing have been huge steps forward in the way businesses and individuals pay their tax. Online filing is considerably cheaper for businesses, requires less oversight and can be more secure – we should welcome the fact that our tax collectors have recognized how to get more bang for their buck by embracing the technology available to them. HMRC is not immune from the need to reduce government spending. It is encouraging to see a focus on adopting new techniques so they can raise revenues without, we hope, hitting service levels."

"Of course, the easiest way to make the process of collecting tax as easy and painless as possible is to make sure taxes are as simple as they can be. The sheer number of taxes, overly complex reliefs and exemptions, codes, clawbacks, and dispensations Britain now has is bewildering. HMRC's job could be made a lot easier if the government radically simplified our hefty tax code."

TAGS: individuals | compliance | tax | business | tax compliance | revenue guidance | law | employees | corporation tax | United Kingdom | tax authority | United States | HM Revenue and Customs (HMRC) | revenue statistics | standards | trade association | HM Revenue and Customs (HMRC) | trade | services

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