While the Comprehensive Spending Review threatens HM Revenue and Customs (HMRC) with cuts and job losses, it actually makes more sense to invest in the department that brings money in, the Association of Revenue and Customs (ARC) said today. ARC is the union representing senior managers and professionals in HMRC, and it today launched a campaign designed to highlight how more Government revenue can be generated.
Graham Black, ARC President, said:
“It is madness to reduce HMRC still further, when it has already suffered 30% cuts in recent years. With more staff, we can bring in more of the tax that is legally due, and deal with the tax cheats who are putting the burden onto everyone else.
“The Government is like a drowning man who decides to throw off his life jacket, because it weighs too much. Who in his right mind would recommend that?
“The amount of money spent on dealing with the tax gap has almost halved since 2006-07 from £3.6bn to £1.9bn, and at the same time the revenues collected by HMRC have fallen by £25bn.
“Every pound spent on dealing with tax cheats will bring in at least 30 times that amount – and that is an investment opportunity any logical person would take.
“And with the additional income, the Government’s options increase: they can reduce the deficit more quickly, or protect key services. Now is the time for a truly bold decision, one that is right for the country, and one that makes both economic and moral sense.”
ARC is holding a meeting for MPs at Westminster on 8 September 2010 to outline the case in more detail.
Notes for editors
1. The Association of Revenue and Customs (ARC) is a union representing senior staff in HM Revenue and Customs, including tax inspectors, accountants, lawyers, managers and other leading professionals. It is also a section of the FDA.
2. The FDA is the trade union and professional body representing 18,000 of the UK’s senior civil and public servants. Our members include policy advisors, senior managers, tax inspectors, economists, statisticians, accountants, special advisers, government lawyers, diplomats, crown prosecutors and NHS managers.
3. The FDA (formerly the First Division Association) should be referred to simply as “The FDA” and can be described as “the senior public servants’ union”.
4. For further information contact:
- Graham Black, ARC President, tel: 020 7401 5559 or 07766 497976.
- Debbie Stamper, ARC officer, tel: 020 7401 5555.
- Graham Flew, ARC officer, tel: 020 7401 5555.
Defeating the deficit – the facts
- Each year the tax gap in the UK is over £50bn. This is the difference between the amount that is due under the law and the amount that is paid voluntarily by taxpayers. At a time when everyone in the UK is being asked to take drastic action to reduce the deficit it cannot be right that almost one third of this deficit is caused by individuals and companies who cheat the tax system.
- This is waste on a massive scale.
- The Association of Revenue and Customs (ARC) represents senior managers and professionals who work in HM Revenue and Customs. These are the senior tax inspectors, lawyers, investigators, accountants, policy-makers and managers who combat this waste through tackling the biggest individual and corporate cheats. And we are incredibly successful in this work. In 2008-09 our members made a major contribution towards the recovery of over £12bn.
- The work undertaken by ARC members is highly cost effective. The amounts recovered range from 30 times salary cost to over 180 times salary cost. Even at the lower end of that scale, an ARC member earning £50,000 a year would expect to bring in over £1.5m to the exchequer. Put another way, each ARC member can generate enough money to pay the salaries of 50 nurses working in the NHS, or pay all the teachers in a medium-sized school.
- Beyond the immediate cash generated from this work, it also has the benefit of deterring others from trying to cheat the system – and it has been estimated that this effectively doubles the overall impact, and doubles the benefit to the country.
- HMRC has already made substantial efficiency savings, with overall staff numbers falling from around 100,000 to less than 70,000 over the past few years – an enormous cut. The amount spent on dealing with the tax gap has almost halved since 2006-07 (£1.9bn compared to £3.6bn) and it can be no coincidence that total revenues collected by HMRC have fallen by £25bn over the last two years. Yet the Government wants to inflict further cuts of between 25 and 40% on HMRC. This is bound to reduce key activities, with further major losses of income.
- The Canadian Government is held up as a model of how to cut the fiscal deficit – yet even the Canadians recognised that they needed more resource in tax collection, not less. And as Henry Paulson, Treasury Secretary in George W Bush’s administration, said to the US Senate Finance Committee, “When people fail to pay their taxes, it serves as a de facto increase on everyone else.” Aside from the financial benefit to the country, catching the tax cheats helps ensure that the burdens are carried equally and fairly.
- Far from cutting spending on its revenue generating department, the Government needs to increase its resources. For every £1 spent on increasing HMRC’s policing activity, we can generate at least £30 more and protect a further £30.
- It’s common sense. It can help defeat the deficit.