2005-2007: HMRC is a steadily deteriorating service

2005: The new HMRC is formed and cuts staff to achieve major efficiency gains

In 2005 a new department was formed by merging the Inland Revenue and HM Customs and Excise Customs. The product: Her Majesty’s Revenue and Customs [HMRC]. In order to achieve ‘major efficiency gains’, HMRC launched a programme of office rationalisation—The Workforce Change Review Programme in 2006-07. By 31 March 2007, HMRC‘s staffing levels had been reduced by a net 10,144 full time equivalent posts – 81% of the 12,500 net target, while 1,501 posts had been relocated out of London and the South East of England – 77% of the target to move 1,950 posts by 1 April 2008 (OECD report. p49).

Staffing levels were reduced but arguably HMRC did not improve efficiency in real terms during the following seventeen years. Some problems listed by the BBC in 2007, included:

HRMC lost sensitive account information belonging to customers of investment bank UBS Laing and Cruickshank in 2005. This data was on a computer disk sent by the bank, which contained address and account details of UBS’s Personal Equity Plan (Pep) investors. Customer information on the data disc included addresses, dates of birth, national insurance numbers, UBS account numbers and the value of their PEPs. 

More than 15,000 Standard Life customers were put at risk of fraud in 2007 after a courier lost an HMRC computer disk containing personal information. The data was on a computer disk sent from the HMRC National Insurance contributions office in Newcastle to the insurer’s headquarters in Edinburgh. But the disk containing names, national insurance numbers, dates of birth and pension data never arrived.

A laptop holding sensitive information was stolen from the boot of a car belonging to an HRMC worker, putting hundreds of people at risk of fraud. A staff member had been using the PC for a routine audit of tax information from several investment firms. Inquiries by the BBC suggested the computer held data on around 400 customers with high value individual savings accounts (ISAs), at each of five different companies – including Standard Life and Liontrust.

An investigation by the BBC’s Watchdog programme uncovered cases where mistakes by HMRC caused personal details to be sent to the wrong people. In one instance, the HMRC put together a dossier on Eric Tizzard with details including his National Insurance number, date of birth, and every address he has ever worked and lived at. But then they sent it all to the wrong person.

Documents found in Nottingham contained sensitive information stamped by HRMC. One gave details of the training of a customs officer, including details of interviews with passengers suspected of smuggling cigarettes via an airport. The documents, found by a BBC reporter, included a VAT return of a man in Norwich, which showed how much he paid for the November 2005 to May 2006 period and his name and address.

In 2007, the HMRC lost computer disks containing confidential details of 25 million child benefit recipients. HM Revenue and Customs chairman Paul Gray (left). who resigned after the lost benefits discs scandal. got a ‘£137,591 pay off’ and received £7,000 a month until the following month when his £2million civil service pension started.

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2009-10: HMRC is warned that its decision to close 130 offices will incur job losses, undermine tax collection and hit advice and support to taxpayers. The Financial Times quoted the Public and Commercial Services Union’s estimate that the amount of uncollected tax written off nearly doubled.

 

 

 

 

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