16 January 2009
(For immediate release)
More tax inspectors not fewer to safeguard public finances says ARC President
Terry Cook, President of ARC - the union which represents senior staff in HM Revenue and Customs (HMRC) - has responded to Digby Jones' attack on civil service numbers by calling on the government to invest in more, not fewer, tax professionals in the public service.
"Digby Jones thinks that the Civil Service could manage with half as many people," said Cook, "But even now ARC members in HMRC are struggling to contain the tide of tax avoidance and evasion.
"As the respected social commentator Polly Toynbee describes it, HMRC is 'beleaguered by powerful tax consultancies dedicated to undermining tax in any way they can'.And following the credit crunch, businesses are looking to reduce their overheads as much as possible. Tax is one of those costs, so we can expect to see even more pressure on my members.
"In 2007 HMRC estimated that the potential corporation tax alone at risk was Â£8.5 billion. A TUC report in 2008 put the figure for tax lost annually from tax avoidance at Â£25 billion. As at the end of February 2007 HMRC had received 900 disclosures of tax avoidance schemes as a result of legislation introduced in the middle of 2004.
"These are very difficult times, with the Government facing a Â£23 billion shortfall in tax receipts according to the pre-budget report. Recent opinion polls indicate that people are growing increasingly concerned about the public finances and fear that the burden of repaying the nation's ballooning debt will inevitably fall on them. It is vital for the public to have confidence that tax rules are properly enforced, so that powerful large corporations and the wealthiest individuals are paying their fair share of the tax burden. But as a partner in a City law firm wrote last year 'an under-resourced HMRC is one that is unable to challenge effectively questionable tax positions taken by those with the means and the power to avoid their responsibilities.'
"Tax professionals in HMRC are already as productive and efficient as Digby Jones could hope for. Senior staff in local offices typically bring in additional yield of at least 20 times the costs of employing them. HMRC's autumn 2008 report shows that for staff dealing with large business, the equivalent figure is 60 times. For ARC members who tackle the most serious fraud and the most aggressive tax avoidance the figure is many times higher still. And there is no evidence at all that we are close to a point where the cost of employing more staff might begin to exceed the benefit, yet below inflation pay rises last year have seriously damaged ARC members' commitment and morale.
"Now is the time for the government to invest in HMRC staff so that the whole country can reap the benefits."
Notes for Editors
1. The FDA is the trade union and professional body representing 18,000 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.
2. Members in HMRC are represented by the Association of Revenue and Customs (ARC), a section of the FDA.
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:
Terry Cook, ARC President, tel: 020 7401 5555 or 07909 884307
Kay Hender, Communications Assistant, tel: 020 7401 5589