Market leading insight for tax experts
View online issue

ARC: HMRC will be ‘half the size it was a few years ago’

printer Mail

HMRC budget cuts announced in the spending review demonstrate ‘a lack of vision’ and are ‘wholly counterproductive’, according to a union representing senior HMRC officials.

The Association of Revenue and Customs, a section of the senior public servants’ union FDA, said it had given a cautious welcome to the earlier announcement of a £900 million investment in HMRC.

Graham Black, President of the ARC, said: ‘Our fears that this limited investment would be funded by far larger cuts elsewhere have now been confirmed. The net cut to HMRC resources, after taking account of this reinvestment, is 15%.

‘It means that, as we plug some of the holes, other larger holes will appear elsewhere. At least 13,000 jobs will go, and HMRC be will around half the size it was a few years ago.

'We know that each ARC member can generate at least 30 times their salary in additional tax. But the converse is also true: for every £1 saved through these cuts the cost in lost revenues will be at least £30.’

In August, Black claimed that it would be ‘madness to reduce HMRC still further, when it has already suffered 30% cuts in recent years’.

Over the period April 2005 to April 2010, HMRC reduced the number of full-time equivalent staff it employs by 23%, excluding the transfer of 4,641 FTE staff to the UK Border Agency, David Gauke said in a Commons written answer on 11 October.

‘Through the use of new technology and increases in staff productivity HMRC has increased the amount of revenue bought in as a result of its compliance activities from £7.5 billion in 2005/06 to £12 billion in 2008/09,’ the Exchequer Secretary to the Treasury said.