From George to Lin – HMRC Objectives for 2012/13Saturday, April 14th, 2012
In a friendly letter to HMRC’s new Chief Executive Lin Homer, the Chancellor George Osborne outlines the remit for her department in 2012/13. These are:
Improving Tax Collection
Chief objective (‘priority’) for Ms Homer is the requirement to maximise revenue in 12/13 in the sum of at least £17 billion. This will be, primarily, by tackling tax avoidance and evasion.
Delivering Cost Reductions
As part of overall deficit reduction plans, HMRC have committed to real term efficiency savings of 25% by 2014/15. The letter mentions ‘headcount reductions in processing and customer contact’ plus the movement of over 3,000 staff to compliance activities. In accordance with his Budget 2012 announcement, Mr Osborne’s letter talks about the introduction of ‘local, market-facing pay’. This is in reference to the move from National pay rates to regional pay levels in the public sector.
Improving Services for Individual and Business Customers
Mr Osborne writes of his ‘ambition’ for a simpler and more transparent tax system. One of the major objectives for 2011/12 was the stabilisation of the National Insurance and PAYE Service (NPS), which has made ‘excellent’ progress. The objective for 2012/13 is to clear the backlog of old PAYE cases so that PAYE is ‘fully up-to-date’ by April 2013. There is also the objective to pursue the Digital by Default / One Click programme, which, amongst other areas, aims to encourage the use of online registration for new businesses as the default option.
Real Time Information
Mr Osborne asks Ms Homer that her department provide regular updates during the pilot period, which commenced 11 April 2012. Plus, she is to use the pilot to explore what further benefits can be gained from the exchange of date in real time in terms of reducing error, increased compliance, ‘policy flexibility and / or reduced burdens for employers’.
There is also the obligation for her department to continue its engagement with the DWP to ensure that the administration of Tax Credits and Tax Credit debt is transferred successfully to the new Universal Credit.
Tax Policy and the Policy Partnership
The letter outlines the Government’s view that HMRC is vital to the implementation and administration of the tax reforms that have been announced previously, including at Budget 2012. As such, continued collaboration with ‘policy partners’ at HM Treasury and the Office for Tax Simplification is required.
The letter outlines an ambitious objective package for Ms Homer – improved efficiency, greater revenues but with less staff. In fairness, the Chancellor does acknowledge this. He closes by advising that he will be visiting HMRC to thank staff personally for their work in 2011/12.