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HMRC cost cutting could be a false economy

Following the announcement last week that HM Revenue and Customs plans to close its 13 enquiry centres across Yorkshire and the North East as part of a five month pilot, business adviser Grant Thornton has warned that the loss of service is likely to lead to a fall in accurately filed returns which could result in a drop in the amount of tax collected.

The government body could close all 281 centres across the UK, putting 1,300 jobs at risk, in a bid to make a saving of £13m. The new service will be piloted in Yorkshire and the North East from June and is due to be rolled out across the UK from early 2014 following a nationwide consultation.

Andy Maxfield, senior manager in Grant Thornton’s Yorkshire Tax Investigations team, said: “While closing the enquiry centres appears to be an easy way for HMRC to save administration costs, we can see a number of potential problems with its plans which could not only reduce support for customers, but also fail to provide cost efficiencies.

“Despite the promise of a more specialised phone service for customers and face-to-face meetings with mobile advisers if needed, the new service poses a number of questions. How will un-represented taxpayers now obtain advice, will a roving ‘tax van’ be sufficient? How will HMRC deal with pinch points of service demand, such as immediately before tax returns are due to be filed, particularly in view of having 1,300 less staff? What about blind and disabled taxpayers and those for whom English is a second language, will the provision adequately cater for them?

“In our experience, there is a lot to be said for sitting down with a person and explaining a problem, particulary in relation to a complex area such as tax - it’s simply not as easy to find answers over the internet or on the phone. While HMRC have indicated that they are keen to arrange meetings to sort out situations where the process has gone wrong, this seems to send the message that they are less willing to help get it right in the first place.”

This was posted in Bdaily's Members' News section by Grant Thornton .