HMRC aiming to reduce running costs by a further £1.6 billion in next four years

News Article - 29 July 2011
Category: Business

HM Revenue and Customs (HMRC) has revealed it aims to reduce its running costs by a further £1.6 billion over the next four years.

However, the National Audit Office (NAO) has released a report regarding the targeted savings, claiming it will be a "big challenge" to reduce costs whilst increasing tax revenues and improving levels of customer service.

The NAO revealed HMRC has reported savings totalling £1.4 billion since 2005, further highlighting the extent of the challenge on their hands to raise a similar figure in just four years.

The make-up of HMRC is also due for restructure, with 10,000 job cuts expected along with a reduction in the number of offices it operates nationwide.

Amyas Morse, head of the National Audit Office, is concerned HMRC has a "limited understanding" of the impact of its cost-cutting measures upon business performance.

Morse said: "Reducing running costs by £1.6bn over four years is a big challenge for HMRC. It is making progress but there is no contingency in its plans.

"To achieve value for money, it needs to better define the service it is aiming for; improve its understanding of costs; and develop its implementation plan."

However, the HMRC responded positively to these latest comments, insisting it was "very clear" on its primary objectives leading up to 2015.

A spokesman for HMRC said they would do their best to "make it as easy as possible for honest people to pay the right amount of tax easily whilst cracking down on those who break the rules."

He added: "Focusing on the different needs of our customers enables us to deliver savings efficiently and effectively.

"In addition, we are communicating a clear vision to HMRC's people which sets out our operational priorities and targets to be achieved by 2015."

Following the news of even slower economic growth in the UK during Q2 2011 - down to 0.2 per cent - the importance of HMRC improving its efficiency for small businesses will be ever greater, enabling industries to expand their workforce and provide further stability.

Article keywords: HMRC, national audit office, savings, running costs

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