How to save £100 million by giving away £36 billion

Today’s blog is dedicated to the HMRC staff at Regent Hill, Brighton, whose office is about to close. I spent the most enjoyable years of my career there and wish everyone there well for the future. It is not their fault that successive governments have attempted to hide fiscal failures by taking the service out of the Civil Service and not considering the devastating consequences for staff and local economies.

In eleven years with HMRC I worked at seven base offices, three are already closed and three more will follow. Eventually all work will be pushed into 13 offices and 4 specialist units, all well away from the areas that desperately need jobs and advice. It is hard to believe HMRC’s claim that rents are cheaper in city centres than in smaller towns. Estimates are that it will save £100 million per annum by 2025. The current tax gap is £36 billion.

From my work in tax compliance and collection I can state categorically that centralisation impedes both the core functions of HMRC. Taxpayers, or customers as the government prefers to call them without understanding the terminology, detest spending hours waiting for a call centre advisor to read them a script from the internet and many give up. Evasion and error are endemic.

As I progressed through the ranks I discovered that the upper echelons of HMRC were infested with individuals who valued their personal careers above the aims of the department. Consequently, they repeatedly made bad decisions but made them look good on paper. Amongst those decisions was the absurd implementation of LEAN techniques. One of my later roles was to teach those techniques to local managers. The course included a structured approach to problem solving, using the 5 Whys. Essentially this involves repeatedly asking why until you reach the root cause of a problem. Let’s apply it to the current problem.

Q. Why is HMRC closing local offices?
A. Because the government is heavily in debt.

Q. Why is the government heavily in debt?
A. One reason is that is it not collecting all the tax that is due.

Q. Why is it not collecting all the tax that is due?
A. It has closed local offices, lost all the experienced staff and left the public without support or supervision whilst simultaneously rewriting tax law to make it more complicated.

The cause of the problem has been identified. Unfortunately nobody is prepared to implement the solution because it will involve an admission of error.


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