Concerns for the taxpayer from growing challenges facing HMRC
HMRC is undertaking 15 major transformation programmes. With Brexit it faces additional pressures and is having to consider how to change priorities. It needs to be clear about what it will do differently, or not do, and what the impact will be on customer service.
Together with the Treasury, HMRC has to make tough decisions on how it allocates limited resources to its operations to increase tax revenues, protect performance levels, prioritise its transformation and estate programmes, and invest in measures to tackle tax evasion, fraud and error.
We are particularly concerned about the impacts on the ordinary taxpayer from the growing challenges facing HMRC, and whether HMRC is doing enough to support vulnerable Tax Credits recipients, especially as they transfer to Universal Credit.
There is a lack of incentive for HMRC to reduce Tax Credits fraud and error in the transition period to Universal Credit.
We remain concerned about the estate rationalisation and the lack of flexibility available as a result of decisions made.
Comment from Committee Chair, Meg Hillier MP:
"HMRC's transformation programme would have been less risky had it not attempted to do everything at the same time.
What was already a precarious high-wire act is now being battered by the winds of Brexit, with potentially catastrophic consequences.
Action arising from allegations in the so-called Paradise Papers could also significantly increase the authority’s workload.
HMRC accepts something has to give and it now faces difficult decisions on how best to use its limited resources—decisions that must give full consideration to the needs of all taxpayers.
In particular we are concerned about the effect on people simply trying to pay their fair share. HMRC’s customer service has improved on the appalling levels of recent years but its claims about call-answering times don’t stack up. Any new deterioration would be wholly unacceptable.
There are concerns too about the impact of changes in the welfare system, which could increase the financial risks faced by vulnerable Tax Credits claimants. At the same time, the level of Tax Credits fraud and error has gone up and is only going to get worse.
These are serious, pressing challenges for HMRC, requiring swift and coordinated action in Government. As a matter of urgency the authority must set out a coherent plan and demonstrate it is fit for the future."