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Overstretched HMRC need a larger budget

Overstretched HMRC need a larger budget

PKF, a firm of online accountants and business advisers, believe that the chancellor should increase funding to HMRC if he really wants to cut the public debt which is currently £167bn.

They say that if the revenue hires extra staff and we introduce a national tax amnesty for tax evasion, an additional £20bn could be raked in over the next 3 years.

They claim that there is a tax gap of £40bn between the revenues estimated collections and what is actually collected.

On Monday, the coalition announced that by freezing non-frontline recruitment in the civil service they could make savings of £190m. PKF has urged the government to make sure that HMRC is not affected by these cuts.

Philip Fisher from PKF said that it would be better to give the Revenue the resources necessary to work effectively and that cutting back on staff would simply be a false economy.

This is a view shared by John Kimmer who has just been appointed as technical officer for the ATT. He said that HMRC is already struggling to cope with the UK’s complex tax system.

Kimmer started working for HMRC in 1960 and having watched systems evolve, he believes the current systems are actually making life harder, rather than better, for the revenue to collect successfully.

Kimmer also stated his believe that the easiest way to raise more tax would be through an increase to the VAT rate as this requires the least amount of work to collect.

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Image: Stretching by Davide Tambuchi [Sirio 174]

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