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Graham Black, president of the ARC, argues that staff cuts mean taxpayers and agents are not getting the help they should from HMRC.

Having read TaxationWeb’s editorial and article last week about the impact of declining staff numbers in HMRC, I thought it would be helpful if I gave a perspective from members of ARC, the Association of Revenue and Customs, which represents senior professionals in the Department.

The previous editorial was wholly correct when it highlighted the risks involved in cutting numbers yet further. While every organisation will have its ups and downs, HMRC will have had over 10 years of nothing but cuts, reducing numbers by almost half, and I challenge any organisation to cope with that without facing major problems. I know that dealing with avoidance and evasion are key areas, and I have argued elsewhere how odd it is to cut senior professionals dealing with top level avoidance while increasing numbers looking at evasion in small and medium sized business. (Lee and I can have a separate debate about what avoidance looks like).

But I know also that ARC members are just as concerned about how the cuts impact on HMRC’s ability to help agents and taxpayers get things right. A huge part of the tax gap comes from areas of uncertain legal interpretation – inevitable with the complexity of current law. We no longer have the resources for agents to have top level, professional contacts in HMRC with whom they can build a relationship and discuss issues. A large part of the tax gap comes from genuine mistakes, where again HMRC staff should be able to help.

I know HMRC still has customer service high on its agenda, but doing more and more, with less and less, can only have one final outcome. I want HMRC to have the trained and professional staff capable of dealing with all tax risks, from criminal attacks and evasion, through avoidance to technical grey areas and mistakes. This would enable HMRC to avoid some of the problems faced in recent years, it would help agents who are trying to give the best advice and support to clients, and it would help taxpayers. It is unhelpful to look at just one area and respond to that – the tax system requires an integrated approach, and for that it needs proper resourcing.

That is not to say that efficiencies cannot be made, or processes improved – of course they can. Oddly enough huge improvements have been made, and continue to be made (for example, more compliance yield comes in each year, despite the cuts). But those improvements get lost, as the pressures elsewhere cause well publicised problems, that in turn put more pressure on HMRC staff trying their best to get things right.

Short term savings for the Treasury mean long term losses to the Exchequer and increased cost and uncertainty to the taxpayer. Anyone think this sounds like a good idea?

Graham Black is president of the Association of Revenue and Customs