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HMRC “trying to do too much with too little”, says ICAEW

The report of the Public Accounts Committee (PAC) into HMRC’s performance published on 12 January 2018 makes for sobering reading, according to Frank Haskew, head of the ICAEW Tax Faculty.

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February 2018

The comments from the PAC chair Meg Hillier highlight the risks that HMRC faces from undertaking the largest transformational programme in Europe while at the same time coping with the demands imposed by developments such as Brexit, Haskew says.

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“It was clear from the evidence the chief executive of HMRC gave to the committee that there is serious concern that the new demands on HMRC could be the straw that breaks the camel’s back. HMRC is currently undergoing a huge transformation programme to a very ambitious timetable, but is now also having to deal with Brexit and a myriad of other pressing matters such as Making Tax Digital (MTD) and the fallout from the Paradise papers. The committee is rightly concerned about the impact of all of this on HMRC’s services, which had been improving in recent years but now risk going into reverse.”

Commenting on the PAC report, chair Meg Hillier said: “HMRC's transformation programme would have been less risky had it not attempted to do everything at the same time. What was already a precarious high-wire act is now being battered by the winds of Brexit, with potentially catastrophic consequences.”

According to the PAC report, HMRC is undertaking 15 major transformation programmes. With Brexit it faces additional pressures and is having to consider how to change priorities. It needs to be clear about what it will do differently, or not do, and what the impact will be on customer service.

The report adds that together with the Treasury, HMRC has to make tough decisions on how it allocates limited resources to its operations to increase tax revenues, protect performance levels, prioritise its transformation and estate programmes, and invest in measures to tackle tax evasion, fraud and error.

“HMRC is being put into a very difficult position,” Haskew said. “It is essential that service standards are not compromised so there needs to be realistic assessment of whether HMRC can deliver on all the demands now being placed on it and, if not, what work needs to be deferred or dropped”.

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