PLANS to close dozens of local tax offices must be abandoned after a spending watchdog uncovered the spiralling costs, the House of Commons heard yesterday.
Shadow chancellor John McDonnell hit out at efforts to centralise HM Revenue and Customs centres after the National Audit Office (NAO) found the “unrealistic” scheme will cost almost £600 million more than planned.
HMRC aimed to save almost £500m by closing 170 offices, including all but five per cent of its Scottish sites, and replacing them with larger regional centres.
But the NAO said 10-year running costs for the new set-up will be 22 per cent higher than estimated. The overall cost is now estimated at £3.2 billion, and it is predicted that the scheme will save less than half of the target sum.
However, HMRC said it expects its annual estate running costs to be £83m lower than the current level by 2025-26.
In an urgent question in the Commons yesterday, McDonnell branded the situation “an emerging disaster” and asked ministers to “call a halt to the planned office closures”. He said: “We have warned consistently on this side that the Government’s proposals will have a detrimental impact on HMRC’s ability to provide advice, and also to tackle tax evasion.”
SNP economy spokesman Stewart Hosie asked Treasury Minister Jane Ellison: “Given how clear and stark the warnings actually are, would it not simply make more sense to pause this, rip it up and start again?”
Ellison replied: “The reasons driving this programme and the reasons we want to transform HMRC into the most modern digital tax authority in the world all still stand.”
The minister conceded that the costs of the moves are likely to be “higher than was first forecast” but said the Government is committed to the modernisation programme.
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