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Demerger

April 1, 2014

Today, some interesting rumours reach me of proposals to de-merge HMRC and restore the historic brands of HM Inland Revenue and HM Customs and Excise.  I hear that the proposals, which are to go out to consultation in the next few months, will also include a clever exit from the once-controversial Mapeley contract and a move out of leased and into properties owned by the taxpayer, saving millions in rent and services payment and creating several thousand jobs in providing building and other services direct by newly-appointed staff who will also be available to perform “back office” functions at times of need.

The de-merger will also herald the de-industrialisation of tax, as both restored departments return to a local office structure.  The main change that taxpayers will see is that they will once more be able to speak to someone, face to face or over the phone, who actually knows what they are talking about, will give their name, extension number and email address, and will then take responsibility for working an issue through to its conclusion.

I hear that the de-merger will come with a hefty staffing and budget increase, to be paid for by the expected rise in collection and compliance yield and narrowing of the tax gap.  There is also likely to be a new task force bringing long-standing disputes to a conclusion via rapid litigation, following which the task force will direct its expertise into prosecution of all tax offences resulting from the new alignment of prosecution thresholds for tax, customs, excise and benefit cases.

Whether the coalition can bring this off in time before the election is, of course, in considerable doubt, but I hear that the timetable is

May 2014 consultation

July 2014 consultation ends.  Enabling legislation passed

September 2014 contracts signed for new local office accommodation

December 2014 first District Inspectors appointed and begin appointment of supporting staff

February 2015 New offices occupied and shadow operations begin while skeleton staff winds down the last of HMRC operations

1st April 2015: New IR and New C&E begin operations.

2 comments

  1. Are you sure it was rumours and not a lovely, lovely dream? My only thought is that the timeframe looks a little overgenerous by current HMRC standards for so fundamental a reform.
    We’ll need to watch also that the Mapely contract isn’t replaced by another offshore vehicle – I understand that the creative end of the profession are exploring the peculiar benefits of San Serriffe these days.


    • Why yes, and my informants also tell me it isn’t so much a demerger as a conscious de-coupling.



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