ARC – the Association of Revenue and Customs – yesterday gave evidence to the Treasury Select Committee’s inquiry into the administration and effectiveness of HM Revenue and Customs (HMRC) and closing the tax gap.
ARC President Graham Black told the select committee: “We are not tackling avoidance as much as we could do and there is a significant capacity to get more there… We’re actually cutting the staff looking at large businesses, multinationals and that’s where the very largest amount of avoidance takes place. That’s where we get the biggest bang for our buck – we get the most return from compliance activity when we’re looking at large businesses and multinational transactions. It seems very odd that when we’re reinvesting to get more money in… we are reducing resources in this area”.
Black also stated that the complexity of the tax regime means it is important for HMRC to be able to support and deal with local accountants, to help those trying to pay the right tax. He added: “We need more professional staff to do this, not less”.
These arguments have previously been made in the ARC Defeat the Deficit campaign, which stressed the need for investment in tax professionals to increase tax collection, rather than cuts being made to HMRC’s budget.
The select committee’s inquiry is looking at the implications of HMRC’s Comprehensive Spending Review settlement and whether the department is able to deliver the Government’s aims on tax compliance.
Watch Graham Black giving evidence at the following link: Treasury Select Committee – Administration and effectiveness of HM Revenue and Customs: closing the tax gap