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HMRC business plan: On track for 2012-15

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23rd Apr 2012
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HMRC expects to collect an additional £20bn in tax from compliance work by 2015, its new chief executive said in the department’s business plan for 2012-15.

Lin Homer, who took over in in January following the retirement of Dame Leslie Strathie, did not signal any change in strategy.

Homer said the business plan, which includes targets for savings and service quality improvements, also gives updates on IT projects and tax agreements with Liechtenstein and Switzerland. These initiatives are building on “solid foundations” laid down by Strathie during a tough period for the department.

Tax agreements with Liechtenstein and Switzerland meant that those who “break or bend” tax rules will have fewer places to hide, Homer said. She said that as part of HMRC’s commitment to being more open it will appoint a new “assurance commissioner” to oversee large tax settlements.

The change follows growing criticism over the way HMRC settles large tax disputes with companies, after it admitted making a mistake in a tax dispute with Goldman Sachs. Critics have accused HMRC of making “sweetheart” deals with big business and for being opaque in the way it settles tax disputes.

HMRC’s business plan for the next three years includes:

  • Using  £917m from a government spending review to help it collect an additional £7bn a year in revenues by 2014-15
  • Reducing its costs by 25% by 2014-15
  • Completing key IT projects such as  a “real time” pay-as-you-earn tax system

HMRC’s efforts to reduce tax evasion were broadly praised by the National Audit Office in March, although the public spending watchdog said there was room for improvement.

In a study on HMRC’s Compliance and Enforcement Programme the NAO how it was affected since 2006 by the backdrop of staff cuts and technology transformation. In its first five years, the programme cost £387m and yielded more than £4bn. HMRC’s target for the period was £4.56bn. For 2011-15, the department is forecasting an additional yield of £8.87bn.

However, the NAO called HMRC’s forecasts “over-optimistic” and added that HMRC is unlikely to achieve this target because some of the programme’s 40 projects fell behind schedule or were cut back to keep within annual budget limits.

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Chris M
By mr. mischief
23rd Apr 2012 21:33

Which country please?
Can you confirm which country we are talking about here? It sounds almost word for word like the business plan Cloud Cuckoo Land published last week, won't they complain of plagiarism?

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