Closing the tax gap requires political will, says ARC

Thursday 19 December 2013 

Media coverage of today’s publication of the Public Accounts Committee’s (PAC’s) report into HM Revenue and Customs suggests that HMRC ‘loses it nerve’ when dealing with the tax affairs of large corporations.

Gareth Hills, President of ARC – the union representing senior managers and professionals in HMRC – said: “This is an overly simplistic response and aspects of the PAC report itself are flawed. If Parliament wants HMRC to really tackle the tax gap one way would be provide it with more resources.

“While corporates may be using existing legislation or structuring their arrangements in a way which allows them to use international law to their advantage, HMRC has to operate within that existing legislative framework. Any successful legal challenges may require legislative changes and, crucially, the political will to drive through such change. Additionally, it is difficult to see how any changes to the international tax rules could be made unilaterally by the UK.

“The report suggests that the ‘true’ tax gap is higher than the figure published by HMRC but gives no alternative. Recommendation 5 suggests that HMRC is ‘seeking to make the UK more attractive to business’, and criticises the department for not considering adequately the impact that changes to the tax regime will have on the behaviour of large businesses. However, those are policy decisions for politicians, not civil servants working in HMRC.” 
Notes for editors

1. The Association of Revenue and Customs (ARC) is a union representing senior staff in HM Revenue and Customs, including tax inspectors, accountants, lawyers, managers and other leading professionals. ARC represents members in HMRC at grade 7 and above, and also trainees in grade 7 entry schemes. It is also a section of the FDA.

2. The FDA is the trade union and professional body representing 19,000 of the UK's senior civil and public servants. Our members include policy advisors, senior managers, tax inspectors, economists, statisticians, accountants, special advisers, government lawyers, diplomats, crown prosecutors and NHS managers.

3. The FDA (formerly the First Division Association) should be referred to simply as "The FDA" and can be described as "the senior public servants' union".

4. For further information contact:
• Gareth Hills, ARC President, tel: 020 7401 5555 or 07870 592356.
• Kay Hender, Communications Officer, tel: 020 7401 5589 or 07980 700747.