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Job cuts hamper tax collections 30 May 2012

The influential public accounts committee praised an HM Revenue and Customs (HMRC) crackdown which has brought in an extra £4.32bn in five years - 11 times what it cost. But it also stated that the decision to axe 3,300 posts at the same time appeared to have undermined its effectiveness to the extent of a staggering £1.1bn of unpaid tax that could have been collected if jobs were not cut at that rate.

The MPs welcomed HMRC's move to reinvest £917m of the savings in boosting staff numbers to step up its enforcement operations but said lessons had to be learned from the previous experience and benefits better calculated.

Mark Serwotka, general secretary of the Public and Commercial Services Union said:
"The effort to ensure people pay the taxes they owe will continue to be seriously undermined by job cuts.

The criticisms by the influential Commons public accounts committee came as the Government launched a crackdown on off-payroll salaries. A review identified more than 2,400 cases of public sector staff being employed indirectly - some potentially avoiding full income tax for a decade or more.

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