The report of the Public Accounts Committee (PAC) into HMRC’s performance published today (12 January 2018) makes for sobering reading according to the ICAEW. The ICAEW responded to comments from the Chair Meg Hillier that highlights the risks that HMRC faces from undertaking the largest transformational programme in Europe while at the same time coping with the demands imposed by developments such as Brexit.

Frank Haskew, Head of ICAEW Tax Faculty, commented “It was clear from the evidence the Chief Executive of HMRC gave to the Committee that there is serious concern that the new demands on HMRC could be the straw that breaks the camel’s back. HMRC is currently undergoing a huge transformation programme to a very ambitious timetable, but is now also having to deal with Brexit and a myriad of other pressing matters such as Making Tax Digital (MTD) and the fallout from the Paradise papers. The Committee is rightly concerned about the impact of all of this on HMRC’s services, which had been improving in recent years but now risk going into reverse.”

He continued. “HMRC is being put into a very difficult position. It looks clear from the CEO’s comments to the Committee that the timetable for the transformation programme is too ambitious even without the extra demands now faced. It is essential that service standards are not compromised so there needs to be realistic assessment of whether HMRC can deliver on all the demands now being placed on it and, if not, what work need to be deferred or dropped”.

He concluded “HMRC’s CEO has showed great candour about the problems facing HMRC and that something has to give. This is to be applauded. Government and HMRC now need to engage with taxpayers and stakeholders about what can realistically be achieved given the need to maintain standards.”