Happy 10th Birthday to HMRC – Time for a Review?
MUCH HAS HAPPENED in the world of tax since HMRC was formed back in 2005.
The Carter Review in 2006 was the catalyst for a massive shift from paper-based compliance to digital. The transition to digital is about to enter a new phase with the advent of digital tax accounts and the potential that this holds for further transforming tax administration is huge.
HMRC conducted a comprehensive review of its powers and as a result the powers and penalties regime was overhauled.
Local offices and enquiry centres have closed and there has been a move away from face-to-face contact towards centralised processing and contact centres.
The tax system has become more complex. Press and politicians – and arguably the general public – now take a far greater interest in tax issues than they did in 2005.
Dogged by criticism
For most of its short life HMRC has been dogged by criticism of its service delivery, while seeing sustained and significant cuts to its budget and a 40% reduction in headcount. Further reductions are planned.
The end of HMRC’s first ten years seems like the ideal time to take stock and ask how well it has achieved the aspirations of the O’Donnell Review which created it, and to ask whether new aspirations should emerge to reflect the vastly different world in which HMRC now operates.