Memorandum submitted by the Chartered
Institute of Taxation
It seems to us that the merger of two large
government departments will take at least two years to implement.
The implementation of the merger will need to be handled with
care and skill. We have taken part in discussions with the new
HMRC, and look forward to taking part in further discussions in
due course. Clearly, it is too early to say how well the merger
is proceeding. However alarm bells have started to ring in two
First, there is evidence that jobs are being
cut before the necessary internal reorganisation has taken place.
For example, there is anecdotal evidence that experience inspectors
of taxes are being offered early retirement. These are the very
people whose experience is needed to deal with the ever-increasingly
complexity of the tax system. The process of integrating the two
departments may initially require additional people, as the normal
work of the merged department has to continue whilst the reorganisation
is being implemented. We are very concerned that a crude cost-cutting
exercise will lead to a significant deterioration of the standard
of service provided by the new department as compared with the
original departments. Even before the merger, members were reporting
that it is difficult to find people in former Revenue offices
who actually have an understanding of how the tax system affects
their taxpayers. Staff appear to have been given only rudimentary
training on how forms should be completed.
Our second area of concern is that there is
an attempt to extend the more draconian powers traditionally exercised
by Customs and Excise to direct taxes. This, coupled with a more
aggressive stance currently being adopted by HMRC staff, as perceived
by members, could lead to the oppression of taxpayers who are
having to cope with increasingly complex systems.
7 October 2005