HMRC is facing an unprecedented and unexpected cuts.
Plans to save money at HM Revenue & Customs by moving more of its operations online are leading towards a repeat of a “catastrophic collapse” in customer service, according to parliament’s spending watchdog. The public accounts committee said it was not convinced that the tax authority had a credible plan to prevent a “disastrous decline” in service while facing spending and job cuts, office closures and the implications of Brexit.
MPs believe it is possible that tax officials could experience a similar collapse to 2015/16, when members of the public were left waiting for around 4m hours for telephone calls to be answered following a reduction of 5,600 in staff numbers. They also questioned whether HMRC might be “painting too rosy a picture” of its success in reducing the gap between the amount of tax due and the total collected.
The warnings come days after Philip Hammond pledged in the autumn statement that HMRC will retrieve £2bn lost to the exchequer via tax avoidance but was criticised for failing to pledge extra resources towards its revenue-raising department.
Meg Hillier, the committee chair, said it was disconcerting that concerns were being raised about HMRC customer service so soon after the previous problems. “The lack of a convincing fall-back plan to safeguard service as HMRC undergoes significant change remains a looming threat to its ability to collect tax from individuals simply trying to pay their fair share,” she said.
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