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SPENDING REVIEW 2013: HMRC budget cut 5% 26 June 2013

Chancellor of the Exchequer George Osborne today announced HM Revenue & Customs’ (HMRC) resource budget will be cut by 5%.

Setting out his Spending Review for 2015-2016, Osborne also pledged extra resources to tackle tax evasion, raising a predicted £1bn-plus.

Osborne said the proposals would move the British economy from “rescue to recovery”. The HMRC budget in 2010 was set at £3.2bn for 2014-2015, due to be reduced to £3.1bn in 2015-2016.

The HMRC settlement includes a further increase to its target for additional revenues, including tacking avoidance and evasion, to a total of £24.5bn in 2015-2016 – £1bn more than in 2010-2011.

It also includes a contribution to deficit reduction though the collection of an additional £95m in tax credit debt on a payment by results funding basis.

Osborne announced the coalition government will ensure that claimants receive the correct tax benefits to which they are entitled, and to reducing the number of tax credit errors, fraud and debt.

HMRC will collect an additional £95m of tax credit debt until 2015, including £80m of expenditure (AME) savings, by paying debt collection agencies to collect additional tax credit debt, although payments to agencies will depend on results.

He also proposed that HMRC will deliver more than £130 million of efficiency savings in 2015-16 through improved productivity and further digital transformation, reducing inefficient manual processing and dealing with error.



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