International Women’s Day and the gender pay gap

Aside

On International Women’s Day, ARC asks the Government to address the increasing gender pay gap.

7 March 2014
(For immediate release) 

ARC is not surprised that recent research suggests senior female civil servants are paid an average of 5% less than men at the same grade, while the government’s own evidence to the SSRB suggested that this was even greater at 5.4%. ARC President Gareth Hills said:  

 

“In HMRC, women in senior grades can be paid up to 8% less than their male counterparts for the same work. In addition it is significantly more likely that men’s salaries are in the top quartile of the pay range and much less likely to be in the bottom quartile”.

 

“The problem is exacerbated by HMRC’s decision to withdraw arrangements where employees advanced through the pay scales. This in turn is aggravated by successive years of pay freezes – started by the last Government and perpetuated by this one. What we see is that long term pay policy in HMRC has had a disproportionately negative impact on women, leaving them paid significantly less than men, often by thousands of pounds”.

 

“The pay system in HMRC and across the civil service is distorted and dysfunctional. Where that results in challengeable equal pay issues in the workplace ARC and the FDA pursue cases through the courts. The union continues to press this Government – and the next – to hold a full review of civil service pay.”

 

Notes for editors

 

1.The FDA is the trade union for the UK’s senior public servants and professionals. FDA membership includes more than 19,000 senior civil servants, government policy advisors, diplomats, tax professionals, economists, solicitors, prosecutors and other professionals work across government and the NHS.

 

2. Members in HMRC are represented by the Association of Revenue and Customs (ARC), a section of the FDA.  

 

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:

          Gareth Hills, ARC President, tel: 020 7401 5555 or 07870 592356 .

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Aside

ARC members to strike over imposed quotas and new terms and conditions

5 February 2014 
(for immediate release)
 
 
The Association of Revenue and Customs (ARC) has informed HMRC that members will be taking industrial action on 14 February 2014. 

ARC, the union representing senior managers and professionals in HMRC, recently balloted members on taking action over a new performance management system demanding fixed quotas – meaning 10% of staff fall in the bottom rating regardless of their performance – and new terms and conditions resulting in those who are promoted receiving a poorer deal. 

The ballot received turnout of 48%, with nearly 60% voting for strike action and 78% voting for action short of strike such as work to rule. 

ARC President Gareth Hills said: 

“ARC members have been asked to strike not for money, but in pursuit of some basic principles: reducing bureaucracy so we can do our jobs, a fair performance appraisal, rewarding, not penalising, promotions; and a fair deal for professionals. 

“Our members are not faceless bureaucrats, but real people striving every day to serve the Government and the public. The work they do builds schools, hospitals, libraries and playgrounds. It’s work that funds the social fabric of the UK and delivers for the nation. They deserve a fair performance system, one which allows them to do their job free from the tangle of bureaucracy.” 

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. ARC represents members in HMRC at grade 7 and above, and also trainees in grade 7 entry schemes. It is also a section of the FDA. 

2. The FDA is the trade union and professional body representing 19,000 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: 
• Gareth Hills, ARC President, tel: 020 7401 5555 or 07870 592356. 
• Kay Hender, Communications Officer, tel: 020 7401 5589 or 07980 700747. 

Evidence to House of   Lords Select Committee

Aside

Evidence to House of   Lords Select Committee on Economic Affairs:

Reforming Corporate   Taxation

INTRODUCTION 

 

The Association of Revenue and Customs (ARC) is   both an independent trade union and the HMRC section of the FDA, the trade   union for senior managers and professionals in public service. ARC represents   around 2,600 members in HMRC, at grade 7 and above, as well as trainees in   grade 7 entry schemes. Our members are senior officials, lawyers and tax professionals,   collectively taking responsibility for the collection of UK taxes, and   tackling corporate tax evasion and avoidance, at the highest and most complex   level.

 

ARC is pleased to take up the Committee’s request   to provide evidence on corporate tax. As the Committee suggests, we are   focussing on whether a new approach is needed to taxing corporations in a   global economy. Most of the suggested questions relate to areas where we   would not claim any particular expertise (e.g. Q1 and who bears the burden of   corporation tax) or are matters of policy where we, as a non-political union,   do not make any public comments.

 

EXECUTIVE   SUMMARY

 

The complex nature of cross border transactions,   along with the complicated structures of multinational groups, and the   current rules, makes ensuring the correct tax treatment of those transactions   among the most difficult work of HMRC’s professionals. As the union   representing those professionals ARC has views on a number of the questions   raised by the Committee.

 

On   question 7regards   reforming the basis of the international allocation of multinational profits   – ARC believes the current taxation system is extremely problematic and may   be driving aggressive tax planning in cross border transactions. However   there is little scope in unilateral action. It is work at the international   level that should provide a focus for concerted action. ARC therefore urge   the Prime Minister to use his Presidency of the G8 not only to drive forward   the debate regards tax evasion and avoidance but to mark a tipping point in   co-ordinated and strenuous policy reform and cross border co-operation to   increase the collection of corporation taxes owed.

 

On   question 11How   successful is the HMRC in dealing with large international business? –   ARC point out that HMRC is remarkably efficient in tackling non-compliance   and is pleased that the Government has recognised, both in word and in deed,   that further investment in front line compliance activity provides a return   on invest of more than 20 to 1. ARC’s fully costed Budget submission showed   that further investment of £312m into HMRC would deliver additional revenues   to UK plc of £8billion – see  http://www.fda.org.uk/nmsruntime/saveasdialog.aspx?lID=5551&sID=7617

Whilst the autumn statement gave HMRC some   additional expertise, that will be nowhere near enough to match that   available to corporates. There are just over 1,100 staff in the Large   Business Service dealing with the tax affairs of the UK’s largest 770   businesses. Further investment is needed to recruit specialists, improve   staff engagement, reduce pay disparities with the private sector and plan for   the demographic challenge given that 35% of staff are already aged over 50.

 

On   question 12Has the   use of aggressive tax avoidance schemes increased or decreased over the last   decade?our   members do not report any reduction in the scale of avoidance, either   notified or discovered. Meanwhile the DOTAS scheme has been of value, with   numerous changes to the law and successful enquiries although it should be   noted that recent figures show that this process only accounted for 46% of   all avoidance HMRC detected. ARC is not sure of the basis on which promoters   would be “named and shamed” however we welcome a public debate on this   proposal.

 

On question 13Is there a need for greater transparency   by multinational companies in declaring taxes paid in different countries?   – ARC believes that any additional transparency is welcome but we are not   convinced that it will be easy to achieve. We suggest it would be better to   focus on the root causes ie promote the wider use of automatic information   exchange and having sufficient trained staff (across all participating   countries) to review information and able to challenge when necessary.

 

RESPONSES   TO SPECIFIC QUESTIONS

 

Q7. Is there a need to reform the basis of the international allocation of multinational profits between countries? If so, should this be based on the existing conventions, as recently suggested by the OECD, or is there a need for more fundamental reform? What other feasible alternatives are there, consistent with international law?

 

  1. Like many others ARC firmly believes that the current corporate taxation system is extremely problematic and may actually be driving aggressive tax planning in cross-border transactions. The UK may be losing its ability to match tax revenues with the economic substance of trading and investment activity. New forms of technology, the capacity of businesses to incorporate in a choice of jurisdictions and the growing use of offshore intermediaries threatens to erode the UK corporate tax base.

 

  1. ARC doubts if there is any real scope for unilateral action in tackling tax avoidance via international companies. Along with other fiscal authorities, commentators have pointed out that the current rules are based on political and economic conditions nearly 100 years ago.

 

  1. International companies who operate within these rules are able to plan their incidence and rate of tax in advantageous ways, often in ways unavailable to domestic businesses. As the OECD summarises, the result is tax base erosion and profit shifting (BEPS)[1].

 

  1. However, alternatives to the current system will not be easy to introduce, especially given the number of international treaties and fiscs that exist[2] Furthermore, moving to any fundamentally new system is, in our view, not likely to guarantee any automatic increase in tax yields. Based on our members’ experience of the ingenuity of tax planners it may serve to offer new, or even unintended, opportunities for tax avoidance.

 

  1. We consider that the work already underway in the OECD provides a single point of focus for a collective approach that builds on the existing infrastructure of treaties, exchanges of information, mutual assistance, double taxation, etc. In mid-April the OECD reported to the G20 Finance Ministers on the progress of its work on the BEPS project, with the aim of producing an Action Plan by the summer.

 

  1. As well as a Tax Gap, there is a policy gap. Bringing international tax rules into the 21st century will not be easy but we support this work. Issues such as limits to interest deductions, worldwide debt caps, excess leverage, the treatment of intangibles, potential re-badging of activities, and e-commerce are all in scope.

 

  1. But ARC also believes that the UK can do more to assist in this work. Already the UK chairs a committee set up by the OECD looking at “transfer pricing”[3].The Chancellor and Prime Minister have repeated their commitments to tackling “aggressive” tax avoidance. After the February meeting of the G20 the Chancellor declared there was scope to go further. He said that this year, the UK hosts the meeting of G8 leaders and that the UK was determined to use the Presidency to drive a serious debate on tax evasion and tax avoidance.[4]

 

  1. ARC would urge the Prime Minister to press for more automatic data exchange, increasing the UK’s technical support in areas such as the OECD technical committees, more practical tax support and building capacity in developing nations[5]. But at the end of the day it will require cross-border co-operation to prevent the use of aggressive international tax planning.

Q11. How successful is the HMRC in dealing with large international business?

 

  1. By any standards HMRC is remarkably efficient in tackling non-compliance across all areas of risk. ARC members are engaged in tackling the biggest tax risks, whether as tax professionals, policy makers, lawyers, accountants or managers.

Their work brings in the lion’s share of the nearly £13bn tax gap closure delivered by HMRC in 10/11; £16.6bn in 11/12. At the top end of this work the yield can exceed 180 times the costs of the staff employed that recoup these sums.

 

10. As part of CSR 2010 ARC welcomed the decision to re-invest £917mn of the cuts HMRC will make into front line compliance activity. David Gauke (Exchequer Secretary to the Treasury) recently confirmed this investment was working: “HMRC

results have shown that it can deliver the additional yield. As the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) noted, in 2011-12, it delivered £16.6 billion against its targeted increased yield of £15 billion, and is on course to deliver an additional £17 billion this year.”[6] In 2012/13 this was £21 billion.

 

11. Indeed, Ministers have already accepted the logic of this argument and made further reinvestments in HMRC. We also welcomed the decision to spare HMRC further cuts in the 2012 Autumn Statement[7].  But the Government should reconsider the scale of the proposed reductions in HMRC staffing, retain experienced staff, and increase recruitment of both trainees and skilled tax professionals. Tackling the difficult work on international taxation relies on a properly trained, skilled, developed and properly rewarded, cadre of senior professional staff.

 

12. ARC members work incredibly hard and are seen as world class[8], but they cannot deal with everything[9]. ARC’s best estimate is that Transfer Pricing expert resource available in HMRC is barely four times that of a single multinational corporate – and HMRC deals with hundreds of such multi-nationals. In addition, when dealing with HMRC enquires these companies can, and do, boost their resources with additional specialist skills from the legal profession and the Big 4 accountancy firms.

 

13. HMRC’s ability to bring in additional resources is severely constrained by lack of resources. Mike Truman, in Taxation, recently noted that “Treating the department just like any other when it comes to staffing ignores the fact that these are the people who bring in the money to pay for everything else.”[10] 

 

14. Whilst the autumn statement gave HMRC some additional expertise, that will be nowhere near enough to match that available to corporates. There are just over 1,100 staff in the Large Business Service dealing with the tax affairs of the UK’s largest 770 businesses. Our members report that the relationships developed with these businesses (e.g. via dedicated Customer Relationship Managers) help promote voluntary tax compliance. The numbers dealing with the 11,000 large businesses are proportionately even less, and much less than one tax professional per large corporate.  We consider that a significant increase in HMRC resources dedicated to the tax affairs of large corporate would generate yield of around 50 times salary costs through tax gap closure and improved voluntary compliance.

 

15. There are signs that HMRC is finding it harder to recruit specialists and staff engagement is still low.  Regrettably, HMRC is still near the bottom of the Civil Service Engagement table. And low engagement and morale is not just an issue for junior staff. A recent FDA survey of SCS members showed 24% would like to leave their jobs as soon as possible. Even using the Government’s own figures 20% would like to leave within 12 months – 5% as soon as possible and 15% within 12 months. HMRC and the unions are working to improve on that, but it will take some time to address the legacy of trust and engagement issues.

 

16. Accountancy firms and large corporates seek out senior expertise. As pay, pensions and conditions continue to be eroded in HMRC there is a real fear that we will lose this precious resource over the next few years. Quite apart from the recent pay freeze and current 1% pay cap, the Hay Group reported last December to Cabinet Office on pay comparisons, as part of the review of Market Facing pay. This shows serious disparities at the level of ARC grades. A qualified international specialist who left to work in the private sector could expect an initial remuneration package of double that paid by HMRC.

 

17. ARC urges the Government to act now to address these pay disparities and with-draw changes to terms and conditions that are currently being proposed. If allowed to continue we believe HMRC risks a rerun of the damaging loss of resources seen in the 1980s when the Inland Revenue was losing 10% of its trained and experienced senior tax professionals each year. This exodus of talent was a direct consequence of huge disparities between the remuneration packages on offer from the ‘Big 4’ accountancy firms compared with those on offer in Inland Revenue. 

 

18. The current disparities between public and private sector remuneration are at least as large as those that existed in the 1980s.  The haemorrhaging of talent was only stemmed when significant pay increases were agreed for senior tax professionals working in Inland Revenue.  But severe damage had already been done and these losses are still being felt today.

19. HMRC has recognised the dangers and is engaged in very substantial recruitment at graduate level. But things will get worse before they get better. Given current systemic shortages and the demographic profile, where 13% of HMRC staff are below 30 and 35% above 50[11], a repeat of the 1980s exodus would have a disastrous impact on HMRC’s ability to tackle tax avoidance.  History sends us a warning.

 

 

Q12. Has the use of aggressive tax avoidance schemes increased or decreased over the last decade? Why? How successful has the DOTAS scheme been? Should promoters of tax avoidance scheme be named and shamed?

 

20. Our members do not report any reduction in the scale of avoidance, either notified or discovered. Nor have they noticed any reduction in the number of tax professionals engaged in tax advice and planning [12]. Instead, they report a shift away from “off the shelf” products to more personalised and bespoke schemes, such as ones that make use of techniques associated with transfer pricing.

 

21. This is substantiated by last November’s Report from the NAO. They noted that “Over 100 new avoidance schemes have been disclosed under DOTAS in each of the last four years, many of them involving variations on themes as promoters respond to changes in tax law. There is no evidence that the use of such schemes is reducing.”[13]

 

22. The DOTAS scheme has been of value, with numerous changes to the law and successful enquiries. But recent figures show that this process only accounted for 46% of all avoidance HMRC detected, even so HMRC calculates that the DOTAS disclosures have yielded c£12.5bn.[14] ARC members will be involved in the risk assessing and review work that helps detect the balance of the cases. Any increase in the numbers of HMRC tax professionals will produce very significant yields.

 

23. ARC is not sure of the basis on which promoters would be “named and shamed”. We do not think this is the same as managing deliberate defaulters as avoidance is not defined in the same terms as evasion of tax. Clearly, if there are legal challenges on any specific avoidance case that is taken before Tribunal or Courts then those hearings are a matter of public record. 

 

24. However, we are very conscious of the need for taxpayer confidentiality in such areas and do not see how this can be maintained if naming and shaming were introduced. But we would welcome a public debate on this proposal and any associated measures needed to give effect to it. We are aware of some evidence that suggests the current consensus amongst politicians and the media of deploring and denouncing aggressive tax avoidance is showing results in shifting taxpayers’ behaviour due to fears of reputational damage.

 

 

Q13. Is there a need for greater transparency by multinational companies in declaring taxes paid in different countries?

 

25. ARC believes that any additional transparency is welcome, such as more public information on key business data like the group structure. But we are not convinced that it will be easy to achieve (e.g. agreeing a definition that would apply across all countries and in identical transactions) or easy to monitor (how would any lack of transparency be visible). Indeed, the veil of alleged “transparency” could be used to conceal avoidance. Furthermore, the idea may founder on the practical issues that would have to be considered, such as the way in which tax authorities will be able to monitor adherence to any rules on transparency, the consequences of failures, in which country any lack of adherence occurred, possible sanctions and consequent appeals.

 

26. We suggest it would be better to focus on the root causes (as in Q7), promote the wider use of automatic information exchange, having sufficient trained staff (across all participating countries) to review information and able to challenge when necessary. Tax authorities still need tax professionals to do the detailed work needed to establish the facts, apply the law and challenge avoidance.


[2] “a radical new set of rules would create winners and losers, both of which must agree to any new deal. Countries want to protect their own interests. Tax is at the heart of national sovereignty – and is thus fiercely defended.” Vanessa Houlder, Financial Times, 3 May 2013.

 

[5] For example, HMRC reports a 40% increase in tax revenue collection in Ethiopia since 2010 when it began technical assistance, http://www.guardian.co.uk/politics/2013/may/07/hmrc-help-ethiopia-tanzania-taxes

[7]“It was decided that we would exempt HMRC from cuts imposed on other Departments in the 2012 autumn statement”. http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm130205/halltext/130205h0001.htm#13020531000001, p20

 

[8] See, for example, comments from John Dixon, Head of Tax Policy, Ernst and Young. “I think, with respect, you are underestimating the skills and quality of HMRC representatives”. Q145, http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubacc/uc870-i/uc87001.htm

 

[9] “While I completely understand the point about charging for them, one of the difficulties that that does not deal with is the actual use of experienced HMRC officers who may be diverted from enforcing the tax law to the more complex question of giving a clearance. They have not got so many free high-quality inspectors.” Bill Dodwell, Head of Tax Policy, Deloittes, evidence, 21 January 2013, to the House of Lords Sub-Committee on the Finance Bill, 2013, p86.

 

[11] Over half HMRC’s staff are over 45 and 18% aged over 55, with around 30% of Grade 6 and above over 55, http://www.hmrc.gov.uk/about/eqact2010-workforce.pdf

 

[12] See the recent report from the Public Accounts Committee on the scale of the Big 4; 8,897 employees and a turnover of £1.853bn. Tax avoidance: the role of large accountancy firms, 15 April 2013,

http://www.publications.parliament.uk/pa/cm201213/cmselect/cmpubacc/870/870.pdf

 

[13] Tax avoidance: tackling marketed avoidance schemes, 21 November 2012, conclusion 7

http://www.nao.org.uk/wp-content/uploads/2012/11/1213730es.pdf. See also The Disclosure of Tax Avoidance Schemes Regime, Oxford University Centre for Business Taxation, 3 December 2012, http://www.sbs.ox.ac.uk/centres/tax/Documents/reports/DOTAS_3_12_12.pdf

 

At the centenary of Suffragette Emily Davison’s death,

Aside

At the centenary of Suffragette Emily Davison’s death, pay inequality still exists for female workers says ARC

3 June 2013 
(For immediate release) 
  
One hundred years on from the incident leading to the death of Suffragette Emily Davison, there remain significantly lower pay differentials for women in the workplace says the Association of Revenue and Customs (ARC), the union representing senior staff in HM Revenue and Customs (HMRC). 

In response to the Government’s recent announcement – by the Minister for Women and Equalities, Jo Swinson – that it is carrying out a further consultation around equal pay audits, ARC President Gareth Hills said: 

“In HMRC, women in senior grades can be paid up to 8% less than their male counterparts for the same work, dependent on grade, location and working pattern. In addition it is significantly more likely that men’s salaries are in the top quartile of the pay range and much less likely to be in the bottom quartile. 

“The problem persists because HMRC’s decision to withdraw previous pay progression arrangements where employees advanced through the pay scales has been exacerbated, by successive years of pay freezes and the continuing 1% pay cap. That has had a disproportionate impact on women, leaving them disproportionately underpaid, often by thousands of pounds. 

“It’s both infuriating and disheartening; on the one hand HMRC has made some welcome progress in seeking to improve representation of women at senior grades, but only in the past few weeks it has decided to impose reduced terms and conditions on staff when they are promoted.” 
 

Notes for editors
 
1. The FDA is the trade union for the UK’s senior public servants and professionals. FDA membership includes more than 19,000 senior civil servants, government policy advisors, diplomats, tax professionals, economists, solicitors, prosecutors and other professionals work across government and the NHS.
 
2.  Members in HMRC are represented by the Association of Revenue and Customs (ARC), a section of the FDA.  
 
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:

• Gareth Hills, ARC President, tel: 020 7401 5555 or 07870 592356 .

 

Aside

Tax gap is closing but further £8 billion could be recouped by HMRC, providing an alternative to cuts or tax increases, says ARC Budget submission

13 March 2013
(For immediate release)                                                                     

The UK’s current tax gap – the shortfall resulting from fraud, error, non-payment and artificial avoidance schemes – is estimated by HM Treasury to be at least £32 billion per annum, which means that every adult pays an additional £1,000 per year in taxes.

Progress toward closing the tax gap was helped by the Coalition decision taken at the 2010 Comprehensive Spending Review to invest £917million in compliance, and a further £150million in Budget 2012.

In its fully costed submission to next week’s Budget, the Association for Revenue and Customs – the trade union representing tax officials – says a further investment of £312 million in HMRC will deliver additional revenues to UK plc of more than £8 billion, a return on investment of more than 26 to 1.

ARC President Gareth Hills said:

“Recouping lost taxes – from companies to individuals, from VAT to corporation tax – makes sense at a time of public outrage over tax avoidance, especially by large multinationals. To do so would also help address the current £100billion deficit providing an alternative to public sector spending cuts or tax increases.

“By investing in key personnel in HMRC, the Government will be guaranteed a significant return. Now is the time for it to act, the time for it to be bold, and the time for it to back a cast-iron winner.”

HMRC’s own figures show that almost £13billion is lost to indirect taxes (such as £9.6billion of VAT) and £18.7billion is lost for direct taxes, including:

 

£5.2bn

Incorrect tax returns from individuals and partnerships

£4.1bn

Company tax gap, £1.4bn in the UK’s largest companies.

£3.2bn

People not reporting their income or gains (ghosts’ and ‘moonlighters’)

£2.9bn

Incorrect PAYE returns from employers

£2.1bn

General avoidance (and real figure is probably higher)

 

 

In addition to its specific proposal (see Notes for editors), ARC feels strongly that the Government should reconsider the scale of the proposed reductions in HMRC staffing, as it is set to lose an additional 13,000 staff over this Spending Review period. ARC also urges the Government to urgently address the significant pay disparity with the private sector (where tax experts can earn up to 64% more) to ensure that HMRC retains the skills necessary to reduce the tax gap and tackle complex avoidance schemes.

 

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. ARC represents members in HMRC at grade 7 and above, and also trainees in grade 7 entry schemes. It is also a section of the FDA.

2. The FDA is the trade union and professional body representing 19,000 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. Details on ARC’s costed programme to reduce the tax gap are below:

 

ARC COSTED PROGRAMME TO REDUCE THE UK TAX GAP

 

Cost

 

Projected yield over 4 years to 2016/17

  1. Tackling avoidance and technical tax gaps
  1. 100 additional senior tax professionals to be deployed as customer relationship managers for 1000 corporate groups.

£25m

£485m

  1. 50 additional senior tax professionals to be deployed as corporation tax specialists to challenge large business tax returns. 

£12.5m

£510m

  1. 200 additional senior tax professionals and 200 HO/SO tax professionals to challenge avoidance by large employers.

£82m

£1500m

  1. 50 additional tax professionals to challenge avoidance of indirect taxes by large businesses.

£12.5m

£500m

  1. Support for front-line compliance staff through increased travel budget and additional support staff.

£34m

£130m

  1. 20 senior tax professionals to tackle technical tax gap.

£5m

£500m

  1. Additional legal resources, 150 trained lawyers and 50 legal assistants, to accelerate litigation of the Tribunal backlog and accelerate yield.

£45.5m

£2000m

Total

£216.5m

£5,625m

 

  1. Investment in customer and agent support
  1. Business expansion unit of 6 senior tax professional staff.

£1.5m

£35m

  1. 250 SO/HO customer and agent support staff.

£40m

£1,000m

Total

£41.5m

£1,035m

 
  1. Building future capacity
  1. Recruit an additional 200 graduates each year to train as senior tax professionals. (Yields will quickly build to over £1billion per annum as these trainees complete their training and develop into experienced tax professionals).

£40m

£300m

  1. Recruit 50 chartered tax advisers and train to become senior tax professionals.

£12.5m. 

£1000m

  1. Internally recruit 50 SO/HO tax professionals and train to be senior tax professionals. 

£2m. 

£300m

Total

£54.5m

£1,600m

 

Overall Total

£312.5m

£8,260m  

 

5.ARC’s full Budget submission can be read here.

6. For further information contact:

  • Gareth Hills, ARC President, tel: 020 7401 5555 or 07870 592356.
  • Kay Hender, FDA Communications Officer, tel: 020 7401 5589 or 07980 700747.

 

 

Aside

Tackling tax avoidance: Public Accounts Committee needs to recognise the need for more HMRC resource and proper reward for staff, says ARC

19 February 2013
(For immediate use)

 

 

Today’s Public Accounts Committee (PAC) report – Tax Avoidance: Tackling Marketed Avoidance Schemes – makes much of naming and shaming promoters of avoidance schemes and adopting the Australian model of advance rulings on schemes, but says little about the need for more resource and adequate reward for HMRC staff says the Association of Revenue and Customs (ARC), the union representing senior staff in HMRC.

ARC President, Gareth Hills said: “We welcome PAC’s comments on having an advance rulings system. Indeed, in ARC’s response of April 2012 to the limited GAAR the Government intends introducing, we said that a more general GAAR – with a properly resourced clearance system – would allow avoidance to be identified and tackled whilst leaving responsible tax planning untouched.”

Hills also welcomed PAC’s comments on ‘naming and shaming’, but said that would require legislative change: “In an era of austerity, ARC has argued consistently that securing the right amount of tax is more vital than ever. The Government needs to give HMRC the tools to allow it to crack down on avoidance and evasion. And it needs to adequately reward those working hard to bring in money to help build a better Britain.”

But Hills is disappointed that the PAC report is silent on the need for further investment in HMRC, over and above the £77m announced in last year’s Autumn Statement: “ARC published its interim investment proposals in December last year to help reduce the deficit and close the tax gap, and showed how an even relatively small scale investment of £120m would recoup currently lost tax of £3.7bn

“The scale of the overall budget deficit of £126billion, and the tax gap of £32 billion, are such that the Government needs to put significant investment into HMRC. By investing in key personnel in HMRC the Government will be guaranteed a significant return – one it could use to draw down the deficit, to avoid further austerity measures, or to fund economic recovery and growth. Now is the time for it to abandon caution, the time for it to be bold, and the time for it to back a cast-iron winner.”

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. ARC represents members in HMRC at grade 7 and above, and also trainees in grade 7 entry schemes. It is also a section of the FDA.

2. The FDA is the trade union and professional body representing 19,000 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. ARC’s April 2012 GAAR response can be read at: ARC response to the Aaronson GAAR study.

5. ARC’s interim investment proposals can be read at: Reducing the UK Tax Gap – Proposals from ARC

6. For further information contact:

  • Gareth Hills, ARC President, tel: 020 7401 5555 or 07870 592356.
  • Kay Hender, FDA Communications Officer, tel: 020 7401 5589 or 07980 700747.