The National Audit Office (NAO) have questioned HMRC claims that a five-year productivity drive has raised £860 million in taxes and saved a further £400 million in resources . . .

The extent to which HM Revenue and Customs (HMRC) PaceSetter programme, which aims to improve business operations, has improved staff engagement and productivity is unclear. Amyas Morse, head of the National Audit Office, said:

“PaceSetter is travelling in the right direction but not fast enough. After five years HMRC ‘s approach to process improvement should be better measured, more sophisticated and more ambitious in its transformation of the department.”

NAO’s report on the PaceSetter programme produced further findings that contradict HMRC claims. The National Audit Office’s assessment revealed costs of at least £115 million in consultancy, staffing, travel costs and equipment, which is more than double the cost of HMRC’s stated £55 million. The NAO have said that HMRC must use the PaceSetter programme more strategically in order to streamline business operations with a clear understanding of processes and customer needs. HMRC has also recently come under scrutiny by the NAO for their Litigation and Settlement Strategy and handling of tax disputes. NAO examined twenty-seven settlements to evaluate HMRC’s performance in resolving disputes. In three of these cases auditors found ‘limited’ or ‘no’ separation’ between the negotiation and approval of large tax settlements.

A spokesman for HMRC, said:

“We completely accept that there should be separate scrutiny of the [high value tax settlements] process as this will provide greater transparency for taxpayers, Parliament and the department’s own staff.”

Since the National Audit Office 2010/2011 report, HMRC have decided to re-launch the department’s Litigation and Settlements Strategy. The NAO see this as a ‘sensible approach’ which should be done ‘as soon as possible’ to ensure a common understanding with HMRC staff of whether to ‘settle or litigate on individual tax issues’. Kevin Kinsella Jnr, of KinsellaTax, said:

“Given the disparities between what the NAO and HMRC say, there should be greater outside supervision of HMRC.”

If you have received a letter from HMRC opening a Tax Investigation into your affairs then why waste any more time? Call us now on 0800 471 4546 to speak to one of our dedicated Tax Enquiry experts. KinsellaTax staff consists of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers, fully experienced in HMRC investigations.

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