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Audit office praises department’s approach to recommendations
Tax officials take a healthy approach to accountability and improving Revenue services, according to a report from the National Audit Office (NAO)
The new document focuses on the effectiveness of tax collection since the government spending review of 2010, and finds HMRC have responded positively to advice for their improvement, having reduced the cost of tax collection while increasing the take from compliance work.
The tax department is praised for having accepted all but one of the NAO’s 137 recommendations, with more than 80% already implemented in full, and for responding positively to counsel from the Public Accounts Committee.
The Revenue engages “strongly with the accountability process” and takes a “robust approach to implementing those recommendations it has accepted”, claims the audit office’s report, which recognises the tax authority’s efforts to tackle marketed tax avoidance, remove a large backlog of PAYE cases, and increase the transparency of large tax disputes.
In spite of having improved performance against targets, HMRC have much more to do to improve their service to the standard expected by regular taxpayers. The department does not believe it will meet its 2014-15 aim of answering 80% of telephone calls – but it has made some progress by replacing its 0845 helpline numbers with cheaper alternatives, in a move expected to save £13m a year.
Tax officials also face significant challenges in its use of technology. The NAO warns that the Revenue runs “significant risks to its technology strategy” it is unable to build sufficient commercial and technical capability in the time left before the end of the department’s contract with third-party supplier Capgemini in 2017.
NAO head Amyas Morse said the Revenue is “among the strongest government departments in terms of managerial competence and its robustness in managing the risks to its essential function of tax collection” but it “faces some significant challenges if it is to harness new technology effectively and exploit the data it collects”.
Morse added, ”The department must continue to adapt and learn from experience, and should ensure it remains receptive to ideas from external stakeholders about how it could improve its performance.”
His office’s report “properly recognises the considerable progress” made by HMRC, claimed the tax authority’s chief executive, Lin Homer.
“In the five years from 2010, we will have collected more than £2.4trn to pay for the UK’s public services,” she said.
“We have used £1bn of government investment to secure more than £100bn in additional compliance revenues… [and] we have spearheaded the global drive against international evasion and are leading players in intergovernmental efforts to reform the international corporate tax framework, and reduce profit shifting by multinationals.”
Homer went on to accept that HMRC are “still not consistently providing the right levels of service, which is why we are accelerating our investment in digitisation to provide the much more modern services that customers [sic] expect”.
