Spending Review 2010 HMRC
Published / Last Updated on 20/10/2010
HMRC, which has not had the best of press coverage lately, will be subject to a slightly below average spending cut of 15% in real terms. It will benefit from:
- A £900m investment aimed at addressing the tax gap and tackling 'tax avoidance and evasion'. The hope is that the additional expenditure will bring in an extra £7bn in annual tax revenues by 2014/15.
- A £100m investment 'to improve the operation of Pay As You Earn (PAYE) for both employers and individuals'.
- Measures 'to deliver £8 billion of tax credit fraud and error savings by 2014/15'. This is linked to the PAYE system development, which will aim to make real-time calculations of tax credits. An improvement to the tax credit calculation system is vital, given two changes announced in the June Budget: the income disregard will drop to £10,000 in 2011/12 and then £5,000 in 2013/14, while the maximum period for backdating claims will be cut from three months to one month from 2012/13.
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