House of Commons - Public Accounts

Select Committee on Public Accounts Thirtieth Report

4 HM Revenue & Customs' skills and training

24. Large businesses are often multinational organisations whose operations may involve international commercial transactions, intra-company trade across national boundaries and cross border-financing arrangements. Around half of the growth in global trade is from intra-company trade between related companies within large multinationals. These features and other factors such as controlled foreign companies' legislation and double taxation reliefs contribute to the complexity of the tax assessments for large businesses. In this environment, the Department needs to have the requisite skills and industry knowledge to deal effectively with such issues.[25]

25. Six hundred staff in the Large Business Service work on Corporation Tax. A quarter of these staff are due to retire over the next 10 years. Departmental staff and large businesses consider that those staff with the greatest experience and industry knowledge tended to be those approaching retirement. To address this loss of knowledge and skills, the Department had recently increased the numbers of recently qualified tax inspectors it was deploying to the Large Business Service, whom it will train and develop. It was also recruiting people who have retired from the major accountancy and law firms to undertake more complicated technical work and help with staff development.[26]

26. The Department had found that recruiting people who had experience of working in the large firms had been helpful in bringing a commercial understanding and perspective, and sometimes knowledge and expertise about approaches to avoidance. Eight staff had left the Large Business Service in 2007 to join the major firms. Where this happens, the Department examined the reasons why. The Department considered that maintaining a flow of staff in both directions between the Department and the private sector was healthy. It also seconded staff to learn how businesses work.[27]

27. In its own survey of staff, a third of the Department's tax specialists and client relationship managers did not feel the training they received was sufficient to give them confidence in their role. Large businesses also consider that there has been a widening gap between the skill set of their own tax staff and that of the Large Business Service. The Department's initial training of its specialists in tax administration is held in high regard internally and externally. But it had reduced the additional training it provides to enhance the skills and knowledge of front line specialists. For example, it had halted its international training courses, which covered transfer pricing issues, and cut back on a number of technical update courses.[28]

28. The Department considered that on the job training provided a better approach to training on international tax issues, working alongside permanent staff who had developed expertise and external recruits. The Department was also creating more specialist roles, and provided training packages to support these roles. It had built up a group of international specialists who worked solely on those issues within the Large Business Service. It had also recently created 16 new specialist posts in transfer pricing, which it planned to fill in the first half of 2008. By so doing, the Department expected to fulfil its commitment to shorten the time it takes to complete transfer pricing enquiries. Since 2005-06, it had recruited 14 avoidance consultants and the Department's Anti-Avoidance Group was currently running a further external recruitment exercise.[29]



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