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HMRC may lack resources to follow through on the new Budget

While George Osborne’s new Budget will have some new regulations in it to crack down on tax avoidance, some wonder if HMRC has the resources to follow through.

When the chancellor reveals the Budget this week, there’s going to be some rather strong wording in there about rubbing out the most egregious tax dodgers out there. It’s integral for Osborne to follow through on all his rhetoric; he may shout all he likes about how tax avoiders are the Devil, but unless he puts his money where his mouth is there’s likely to be a reckoning come this General Election.

Truth be told, the Government has been passing a dizzying collection of laws to stamp out both avoidance and tax evasion, attempting to target multinationals and self-employed Brits like contractors equally in an aim to bring in an additional £7.6 billion in the next year – an aim that’s been seen as wishful thinking or even a pipe dream by many industry experts.

Part of the problem, according to some MPs, is whether Her Majesty’s Revenue & Customs will even have enough resources at its disposal to enforce these new incoming anti-avoidance regulations that will flow so trippingly off the tongue of the Chancellor of the Exchequer this week. The Government has been throwing cash at HMRC to fund its compliance activities for the past five years, but the tax authority has seen itself shrink by something like 40 per cent over the last ten years. A survey taken of staff in December of last year – just a few months ago, really – found that more than one fifth of staff wanted to get out and go to greener pastures in the next 12 years, with the biggest problem among the accountants and adjusters in the employ of the taxman being dissatisfaction over pay rates.

So what’s going to happen to HMRC once Osborne goes public with these new regulations that he expects the taxman to enforce, even though its staff is exhausted and disillusioned and without the resources to effectively go after avoiders? Well you’ve certainly got me. In all honesty HMRC needs more support if it’s expected to solve all the Government’s problems, not just given an insurmountable task and then have the piss taken out of it when it can’t handle it.

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