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Grant Thornton warns 25m data debacle repeat inevitable due to HMRC cuts

Grant Thornton says more mistakes like the loss of 25m child benefit records are inevitable if the Government presses ahead with plans to slash funding and staff numbers at HM Revenue & Customs.

It says HMRC is being forced to cut staff levels by at least 25 per cent as part of the Government’s efficiency drive whilst since 2001/02 the number of individual taxpayers has increased nearly 10 per cent and corporate taxpayers by 66 per cent.

Grant Thornton says HMRC is having to implement a range of new tax initiatives, some of which are revenue raising, which are requiring yet more to be delivered from a shrinking workforce.

Grant Thornton national tax office head Francesca Lagerberg says the Government is right to challenge HMRC costs but the current cuts are untimely given the increasing workload of the department and “relentless” generation of new tax policy.

She says HMRC will be under even more pressure to deliver from next April when the changes to capital gains tax, residence, domicile, capital allowances and the sharing of income between related parties are introduced.

She says: “The Government is under serious pressure to reduce its borrowing and in light of the recent cost estimates for the UK economy of fighting climate change, placed at anywhere between £1.6 – £12bn per year, it is unlikely that HMRC will receive the additional support it so craves. This is despite it being at the centre of Government revenue collection and future green tax policy.”

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