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Pressure put on tax office

Jobs and service ‘at risk’ as HMRC to close 137 offices

Tax returnHM Revenue and Customs is to consolidate its offices across the UK into 13 regional centres, cutting thousands of jobs.

Up to 2,000 will go in Scotland’s 18 centres, including Dundee and Cumbernauld.

The new regional centres will include operational, tax professional and corporate services and will range in size from 1,200 to 1,700 full-time equivalent employees in the smaller locations to between 5,700 to 6,300 at the larger units.

The decision prompted warnings that the tax service would be adversely affected, while others welcomed the improved efficiency it would bring.

First Minister Nicola Sturgeon called for early talks with Westminster to discuss the plan.

Jim Meakin, RSM’s UK head of tax said: “Is this change designed to provide a better service to HMRC’s customers or simply save costs? If it is the former then it is to be welcomed. If it is the latter then there is a risk service standards will slip which will not be good news for anyone who has to contact HMRC when it comes to agreeing tax codes or liabilities.

“The prospect of waiting even longer for HMRC to answer the phone will be of most concern. If, however, the move to a hub will help guarantee swifter response times and even perhaps someone who will answer the telephone when it rings and who is trained to deal with my query, then the location of the HMRC hub becomes somewhat irrelevant in this digital age.”

Frank Haskew, head of tax faculty at accountants body ICAEW, said: “This restructuring will place yet more pressure on an organisation that is not delivering the level of service taxpayers have a right to expect. Service standards are deteriorating with taxpayers having to spend longer and longer on the phone trying to get through or waiting for their letters to be answered.

“The UK tax system is already struggling to cope with the demands being placed on it. Our tax code is overly complex and places a significant regulatory and compliance burden particularly on small businesses whose focus should be on contributing to economic growth.”

“HMRC should have access to the resources it needs to provide an efficient and effective tax system as this underpins strong tax compliance.

“We shouldn’t underestimate the disruption that this restructuring will have on HMRC and the distraction it will cause to its leadership as they seek to implement it. Given the challenge of improving service standards and closing the tax gap, we are concerned that this is the wrong time to be reorganising, closing offices and cutting staff.”

Martin Bell, tax partner with BDO, said: “While any job losses are regrettable, this change reflects the ever increasing use of technology by HMRC in response to the digital revolution and is a natural consequence of the proposed demise of the traditional tax return.

“HMRC has already invested significant sums in technology with the likes of the tax investigation Connect software but this is a much more fundamental change.

“There have always been question marks over HMRC’s implementation of new IT systems but it is clear that employing large numbers of staff to pore over written documentation is a thing of the past.

“Whether taxpayers feel HMRC can afford to lose more staff at a time when there are huge delays in answering calls and responding to basic requests for help is another matter.”

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