SNP MP warns that tax office cuts will lead to an increase in the gap between the rich and poor
TAX office closures will lead to a surge in the gap between rich and the poor and an increase in tax avoidance as well as people not being paid the minimum wage, the UK Government has been warned.
Under controversial HMRC plans 18 Scottish offices, including major centres in Dundee, Cumbernauld and East Kilbride, would be shut, with all staff based at new regional centres in Glasgow and Edinburgh by 2021.
SNP Glasgow South West MP Chris Stephens warned that the cull of offices would make it harder to detect tax evasion, something he said could let the wealthy get away with paying less taxation.
Stephens, the SNP’s trade union and workers’ rights spokesman at Westminster, also claimed reducing the number of HMRC bases would make it harder to police “rogue” employers who do not pay the statutory national minimum wage.
The MP spoke out as the Public and Commercial Services Union (PCS) published a report that warned most HRMC workers believe the UK Government’s plans will “negatively affect its staff and its ability to collect tax and enforce tax compliance”.
Stephens, who is also the chair of Westminster’s PCS group of MPs, said: “This report lays out in very alarming detail the dangers of closing HMRC offices, and the effects this will have in tax collection.
“With the tax gap getting wider, and the reductions of tax collection staff, the end result will be less tax being collected. Closing HMRC offices will result in the loss of local knowledge, will see many towns and cities with high unemployment losing the largest employer.
“It makes little economic sense to cut the number of offices and staff from the Government department which responsible for revenue raising. These cuts can only assist rogue employers not paying the minimum wage, and the tax avoiders and evaders who directly responsible for much of the austerity being inflicted on our society.”
A HM Revenue and Customs (HMRC) spokesperson denied the claim that cuts of tax offices would encourage avoidance, claiming existing services would be protected.
Adding: “In November 2015 we announced that we are bringing our people together into 13 regional centres across the UK, including Glasgow and Edinburgh, with additional supporting sites in Gartcosh and East Kilbride. We are taking the next step in creating a tax authority fit for the future, delivering better, more modern services to customers and making it harder for the dishonest minority to cheat the system. Scotland currently has 12 per cent of HMRC’s workforce and this won’t change as a result of the announcement.
“HMRC continues to crack down on employers who ignore the law, ensuring that their employees receive the wages they are entitled to. Last year we delivered unprecedented pay arrears in excess of £10 million for more than 58,000 workers.
“We are cutting down on tax avoidance and evasion with modern technology, use of data and collaboration – HMRC’s new regional centres will help us to achieve this, not hinder it. HMRC does not need to physically be in a location to see and stop wrongdoing in the tax system.”