Most people agree that HMRC was and still is in need of reform. Dealing with its customer services, one is sometimes made to feel like they are doing you a favour by allowing you to pay tax.
But a new academic paper published today suggests HMRC’s shift towards a greater focus on customer service has made it easier for companies to avoid paying their dues. The research by Warwick Business School and the University of Birmingham found that reforms have led to the departure of a ‘glut’ of tax inspectors, who have now moved into the private sector to use their expertise to help businesses navigate their way through the system.
‘Where professionals cross the line from being a regulator to becoming a "regulatee", this could create problems,’ said Professor Graeme Currie, one of the report’s authors. ‘These gamekeepers-turned-poachers could compound the impact of a policy shift because they are best placed to capitalise on any changes to the agency’s focus. As former insiders they are "canny customers".’
The academics claim this exodus is the result of changes to the way HMRC manages its tax inspectors. While it was once a very technically-focused roll, the report says so called ‘hybrid manager’ tax inspectors have been ‘shifted away from a focus on tax compliance, to a greater customer focus.’
It’s worth noting that the study is based on just 43 interviews with senior tax inspectors, so it’s hard to get a sense of the scale of the problem. Nonetheless at a time when everybody seems to be up in arms about the tax affairs of Google, Facebook et al, HMRC won’t be overjoyed with the report’s findings.
A HMRC spokesperson responds: 'We dispute the findings from this very small and unrepresentative survey. Not only are HMRC's staff committed to protecting public finances against tax evasion and tax avoidance, but Civil Service rules prevent potential improper use of privileged information gained through public sector employment. In addition, action that the Government has taken has considerably reduced the opportunities for companies and individuals to avoid tax.
'Civil Service restrictions can ban an employees' involvement in dealings between a new employer and the Government, or a mandatory waiting period before taking up employment, which significantly limits the scope for former HMRC officials to advise on tax avoidance. The rules do not prevent an employee from using any professional skills or qualifications they may have acquired while employed by HMRC.'