Tax office workers strike over cuts

Over 50,000 Revenue and Customs workers are going on strike in protest at "massive cuts" they claim undermined efforts to clamp down on tax avoidance schemes.

Members of the Public and Commercial Services union (PCS) will take action across the UK, warning that the walkout will close offices and leave telephone calls unanswered.

The union said 30,000 jobs have been axed since 2005 and a further 10,000 are set to go, "undermining" efforts to investigate schemes such as the one used by comedian Jimmy Carr, which sparked a political row last week.

The PCS said an estimated £120 billion was lost every year because of tax evasion and avoidance, claiming that HMRC did not have enough resources to tackle the problem.

The strike is also in opposition to "creeping privatisation" in the department, which is currently trialling the use of private firms to handle tax credit inquiries.

The strike will be followed by other forms of action such as a ban on overtime.

PCS general secretary Mark Serwotka said: "It is sickening to see millionaires in the cabinet wringing their hands about the immorality of tax avoidance when it is their lack of political will to act that means we lose tens of billions of pounds every year.

"The case for investment in our public services as an alternative to austerity could not be more obvious than it is in HMRC. Yet the government wants to cut 10,000 more jobs from the department, letting the wealthy tax dodgers off the hook and punishing the rest of us for a recession we did not cause."

An HM Revenue & Customs spokesman said: "HMRC is disappointed with the decision to strike and will do everything it can to maintain services to the public. We are seeking dialogue with the PCS to address their concerns and will work to minimise any disruption to our customers.

"In our 2010 spending review the Government made £917m available to us to tackle avoidance, evasion and fraud. This is being used to increase our tax take from compliance work by £7bn a year in 2014/15 which we are on target to do. Last year alone we increased the yield from our compliance work to £13.9bn."

Taxman criticized for Goldman tax deal

The country's public spending watchdog has criticized the tax authorities for a series of settlements that may have allowed companies including investment bank Goldman Sachsand mobile phone operator Vodafone to avoid paying millions of pounds in taxes.

A National Audit Office (NAO) report released on Thursday highlighted procedural errors in five large tax settlements, echoing earlier criticism of the deal from a parliamentary committee which accused tax authority HMRC of being "too cosy" with large companies.

Amid a government policy of austerity, public discontent is rising at rich individuals and big corporations incurring tax rates well below those of average taxpayers' or the headline corporation tax rate.

On Wednesday, British activists against tax avoidance won court backing to challenge the Goldman settlement, which cut its 2010 British tax bill by an estimated 10 million pounds.

Activists protested outside Vodafone's main Oxford Street store in London in 2010 when its tax dealbecame public.

While the NAO said the settlements were reasonable, insofar as HMRC may have received less if it litigated and lost, the watchdog found procedural errors in how the tax collector cut the deals.

HMRC did not always seek legal advice before agreeing settlements, refer settlements for independent review, as was standard procedure, while staff did not keep notes of all meetings at which settlement terms were agreed.

"The findings from the review of these five settlements confirm our concerns over the governance arrangements operated in these cases," the NAO said.

Member of Parliament Margaret Hodge, head of the Public Accounts Committee, which probed the deals last year said the report showed how HMRC needed to clean up its relations with big business.

"This report confirms my Committee's concerns about the uncontrolled way that HMRC has been doing secret deals with large companies ....These deals have sent a message that it's one rule for big business and another rule for everyone else," she said.

The tax authority has "acknowledged that its governance processes need strengthening and is introducing new arrangements," the NAO added.

Previously, HMRC denied systemic failures in the management of tax disputes.

The NAO report did not name the companies involved in the cases which it assessed but sources close to the process said one involved Goldman and another involved Vodafone.

©Reuters 2012