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HMRC's office closures

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On 12 November, HMRC announced a further step in its ten year modernisation programme. A further 137 offices will close, leaving HMRC’s operations centred on 13 regional hubs.

HMRC says that this will ‘bring staff together in more modern and cost-effective buildings in areas with lower rents’ and enable it ‘to give customers the modern services they now expect at a lower cost to the taxpayer.’


I can see the logic in moving to a smaller number of better equipped hubs; I can also see the potential benefits in moving to an increasingly digital world, but some things concern me about the announcement.

Firstly, I am concerned that we will see yet more experienced people leaving HMRC because of the closures. HMRC will need to put even greater emphasis on training and skills to replace the knowledge and experience being lost.

Secondly, I am concerned – and I say this as someone who has actively championed digital tax administration in this country from, literally, the day that process began – that too much is perhaps being expected of digital transformation. Digital tax accounts, digital channels of communication and intelligent use of big data undeniably hold huge potential, but they are only part of the answer. HMRC still has to raise its game on basic customer service, especially call centre performance and post handling and will need to maintain a clear focus on those areas for years to come. It also needs to commit to some clear and specific performance measures that reflect taxpayers’ legitimate expectations of good service when they call or write.

Thirdly, I winced when I read the claim made in the press release that the ten year modernisation programme, now at its half way point, had amongst other achievements ‘already resulted in over 80% of people filing their self-assessment returns online’. Electronic filing is certainly a success story for HMRC, but SA online filing had already reached a very impressive level before the modernisation programme and is not a result of it. HMRC’s 2010/11 Annual Report said that it was even then achieving a very impressive 78%. It achieved 80% the following year.

Challenges ahead

I do not envy HMRC’s leadership. The task they face has become more difficult with every year that has passed since HMRC was formed. They have consistently been asked to do more and more with less and less. I remain firmly of the view that HMRC is under resourced and I do not believe that we will see service standards return to the levels taxpayers expect unless and until that is addressed. Tax administration in the UK can certainly be made more efficient. I accept that a part of that process is going to be more centralisation and an increasing reliance on digital channels, but a key lesson to be borne in mind during this next phase of the modernisation programme is that headcount should only be reduced when new processes and infrastructure – physical or digital – have proved themselves, not in anticipation of gains that may prove rather more elusive than expected.

This next phase of the modernisation programme will need extremely careful management. I would like to think that in five years’ time HMRC could look forward to a period of stability. Experience, however, suggests that might be a forlorn hope. Constant change is, I fear, now an inevitable part of the tax landscape.