Zarah ChoudharyHM Revenue and Customs (HMRC) is set to recruit 5,000 additional tax inspectors as part of a compliance drive aimed at narrowing the tax gap and raising an additional £6.5bn in revenue by 2029/30, according to the HMRC Customer Service & Accounts report published yesterday.
Following the recommendations of the FDA, the government has announced that 5,000 additional HMRC staff will be recruited to close the “tax gap” and recover more money for the public purse.
Before Parliament entered recess, Exchequer Secretary to the Treasury James Murray stated that the Government “will take a comprehensive approach to tackling the tax gap and making sure more of the tax revenues that are owed are correctly paid.”
He added: “The Government will invest in HMRC’s compliance work, hiring around 5,000 additional staff to recover more tax revenues. HMRC has already started the process of recruiting additional staff into compliance roles.”
The minister also stated that the Government “will also invest in HMRC’s technology infrastructure, helping to make HMRC more efficient and improve taxpayers’ experience of interacting with HMRC.”
This announcement followed the Funding the Nation report from the FDA’s HMRC section – the Association of Revenue and Customs – which demonstrated how a new government could return £11.3 billion by investing in compliance, customer services, and improving technology.
The HMRC Customer Service & Accounts report noted that small businesses now account for 60% of the tax gap, compared with 37% in 2017/18, highlighting the department’s increased focus on this sector.
HMRC is also conducting parallel investigations, examining both businesses and their directors simultaneously.
Additionally, tax inspectors are now more likely to review multiple years of accounts during investigations, a measure aimed at uncovering compliance issues across a broader timeframe.
The report also acknowledged HMRC’s ongoing struggles in addressing serious tax evasion, including electronic sales suppression in retail and directors avoiding tax debts through company wind-ups.
Matt Barrow, FDA national officer for HMRC said: “This announcement is a clear example of how our campaigning has tangible outcomes.
“Our campaign started by listening to our members – what barriers they face and how those barriers could be removed.
“The brilliant engagement from our members formed the basis of our report’s recommendations, which were endorsed by a number of the UK’s leading tax experts and were subsequently included in Labour’s election manifesto.
“Now our recommendations can be found in official government policy – helping to support HMRC to optimise tax revenue and support the delivery of public spending priorities.”
Tom Langrish, president at ARC, added: “This investment is welcome and necessary.
“It will not only improve our members’ daily work life but will also deliver for the public by ensuring that all tax that is owed is paid”.
