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The National Audit Office (NAO) has reported that HMRC is aiming to cut back running costs by £1.6Bn over the next four years. In addition to this massive reduction in costs, they also have to improve customer service and increase tax revenues.

The actions needed to achieve this include; decreasing their number of staff by approximately 10,000 and reducing the number of branches. In addition, they hope to save money by improving productivity and reducing absences as a result of sickness. NAO have stated however, that as these measures have not yet been tested there was still a need to “build greater confidence in the planned reductions.”

Amyas Morse, head of the National Audit Office has outlined what a massive challenge HMRC is facing and stated that even though progress is undoubtedly being made, there is still work to be done to establish a plan that will work. He has suggested that “To achieve value for money, it needs to better define the service it is aiming for; improve its understanding of costs; and develop its implementation plan.”

HMRC has responded to the report saying that’s its “key objectives” are to “make it as easy as possible for honest people to pay the right amount of tax easily whilst cracking down on those who break the rules” They are hoping to increase tax revenue by £7bn by 2014- 2015 by reinvesting £917m in resources needed to challenge tax evasion and avoidance.

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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