In a bid to reduce fraud and error, HMRC have employed over 3,000 new staff in it’s compliance department since the end of the 21/22 year, an increase of 12% in just one year.
A report by the Public Accounts Committee from earlier this year found that the Compliance department had its lowest amount of tax recovery in over a decade, meaning that £9 billion less was collected than should have been over the past two years, although some of this was down to fraudulent COVID scheme claims.
To try to turn this trend around thousands of new staff have been hired by HMRC to work on making sure that tax is applied and collected correctly. As well as the additional compliance staff, over 500 new tax inspectors have been employed to join the Fraud Investigation Service which targets tax evasion and deliberate errors.
It is thought that high on the agenda will be a focus on money laundering through cash businesses, as well as more work on inheritance tax after it was reported that £2.3million in fines were handed out in connection with incorrect valuations. With reduced staff numbers HMRC have had to focus on targeted investigations, but with a larger staff they can once again return to a greater number of random inspections. This means you are more likely to have an investigation than before, but if your affairs are in order you have nothing to worry about.
Despite being criticised for their ‘diabolical service‘ and delay in replying to tax payer queries , none of these new staff roles will be assisting directly to clear the back log so most businesses are unlikely to see any improvement with their dealings with HMRC unfortunately.