Select Committee on Treasury Written Evidence

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 areas.

  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

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