The Institute of Directors has said supported HMRC in its plans to produce a better service for taxpayers while making necessary savings.
Stephen Herring, Head of Taxation at the IoD said:
“The announcement of another HMRC restructure will be met with predictable concern that fewer people answering calls could result in lower revenue. But that simply need not be the case. The number of employees should not be seen as a proxy for HMRC’s effectiveness as a tax collector. The United States’ Internal Revenue Service serves a population five times the size of the UK, but has only 60% more staff. In closing the tax gap by £11 billion in the last decade, and halving the amount of corporation tax which goes missing, HMRC has shown the way forward by redeploying staff and focusing on modern ways of collecting tax.
“Automation, digitisation and the roll-out of online filing have been huge steps forward in the way businesses and individuals pay their tax. Online filing is considerably cheaper for businesses, requires less oversight and can be more secure – we should welcome the fact that our tax collectors have recognised how to get more bang for their buck by embracing the technology available to them. HMRC is not immune from the need to reduce government spending. It is encouraging to see a focus on adopting new techniques so they can raise revenues without, we hope, hitting service levels.
“Of course, the easiest way to make the process of collecting tax as easy and painless as possible is to make sure taxes are as simple as they can be. The sheer number of taxes, overly complex reliefs and exemptions, codes, clawbacks and dispensations Britain now has is bewildering. HMRC’s job could be made a lot easier if the government radically simplified our hefty tax code.”