HMRC just misses its tax evasion targets

Online accountants may be surprised to learn that despite HMRC’s efforts to clamp down on tax evasion, it still fell short of its five-year target.

The Revenue should have amassed £4.56 billion by improving staff productivity in the fight against tax evasion, but the total that went into the government’s coffers was only £4.32 billion.

HMRC introduced new systems and improved their techniques for targeting tax evaders. It cost the government department £387 million to set up the programme, which has seen the number of Revenue employees decrease by 3,374 over the last five years.

The National Audit Office says the scheme has been a success but is not yet operating to its full potential. Amyas Morse, the head of NAO, said HMRC has managed to increase its tax yield and introduced techniques that will strengthen future compliance work.

However, the department could still do better if it better understood the impact its individual projects have and made sure employees know how to exploit the new systems to their best advantage.

The NAO said budgetary limits were a factor in the financial target shortfall plus staff productivity improvements only reached 36% instead of the forecasted 42%.

Tina Riches, a technical director at the Chartered Institute of Taxation, said HMRC staff appear to be performing well and these figures should not be seen as disappointing. She went on to say that the Revenue is now able to target 1,000 firms in one go simply by trawling the Internet, but these are mainly in the SME sector, it still struggles to work out how to deal with larger corporations.

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