By Claire West
Tax campaigners have welcomed the news that the HMRC budget is to be protected from the cuts faced by other government departments, and also the promise of greater transparency for ordinary taxpayers.
Commenting on the Chancellor's statement that the HMRC budget will not suffer the 1% and 2% cuts being imposed on other departments, Robin Williamson, Technical Director of the Low Incomes Tax Reform Group (LITRG), said:
"This could be good news for those who depend upon HMRC as their only source of advice and help with a highly complex tax system.
"The fact that HMRC have been given an extra £77 million to tackle avoidance and evasion shows that if there is a will to find extra money in a worthy cause, there can also be a way. A cause equally worthy of substantial reinvestment would be the restoration of HMRC's customer service to acceptable levels.
"HMRC have made good progress since 2009 and 2010 in improving telephone response times and correspondence handling, but admit that there is some way to go before they reach industry standards. A certain amount of reinvestment has already taken place; more of the same would enable HMRC to enhance the speed, quality and accuracy of their interaction with taxpayers and tax credit claimants.
"Improving customer service generally will reduce low value work, in turn freeing up HMRC resource which can be deployed to tackle deliberate avoidance and evasion. Besides, investing in customer service may indirectly (or even directly) fulfil the remit of tackling evasion and avoidance. After all, if people are better able to engage with HMRC, they are less likely to drop below the radar."
LITRG has also commented on the announcement in the Autumn Statement of an expansion of the range of digital services provided by HMRC, including a personal tax statement for 20 million taxpayers showing how their tax is calculated and spent by government. Earlier this year HMRC consulted on the idea and received a thumbs-up from LITRG.
Robin Williamson said:
"This is a welcome step towards greater transparency for individual taxpayers. We hope it will pave the way for similar personal tax statements for all taxpayers, businesses and private individuals. We hope too that the service will be extended in paper form to those without access to technology, so that they are not left behind. We look forward to consulting with HMRC on the design.
"Hitherto the PAYE system has been notoriously opaque, tripping up millions of unrepresented taxpayers who are without access to specialist advice, and who lack the code-breaking skills necessary to understand the average PAYE calculation. A personal tax statement could usefully improve transparency in the PAYE system as it moves into the brave new world of real-time information from next April."