Treasury minister James Murray has told MPs there could be potential for HM Revenue and Customs to get a further staffing boost if there's evidence it will improve tax collection rates.
Murray, who is exchequer secretary to the Treasury and chair of HMRC's board, suggested there may be scope for going beyond existing plans for a 5,000-strong increase in compliance staff and 1,800 additional debt staff planned for the current parliament.
His comments came at a Treasury Select Committee session this week, when he was asked about HMRC's work to reduce the so-called "tax gap", which stood at just under £40bn in 2022-23 and represented 4.8% of tax estimated to be owed.
Committee member Yuan Yang asked Murray whether HMRC had previously been under-resourced in terms of staff working on closing the tax gap and how far the department is from its "optimal size".
Murray said that given the new government had been able to increase staffing at HMRC with a view to shaving £6.5bn from the tax gap over the course of the parliament, it seemed the last government had not been providing sufficient resources.
"There was definitely extra capacity there to bring in additional tax revenue, and we can do that through these extra staff," he said.
Murray said considering the optimal size of HMRC, which had a full-time-equivalent headcount of 60,968 as of July last year, was an "interesting" question.
"You obviously have diminishing returns to investment in terms of extra staff at some point. But one of the questions which I'm very keen to understand is where that point kicks in," he said.
"We've set ourselves a very ambitious target of 5,000 extra compliance staff and 1,800 extra debt staff at the moment. But I'm very keen to keep that under good review and see whether there are opportunities to consider 'Is that the optimal number? What else could be done?'
"In terms of bringing extra staff on board, there's sometimes a question about the rate rather than the absolute number because the more people you bring onboard, that then takes existing staff away to train them. With any organisation, there's a rate question as well as a destination question."
Supporting documents for the Autumn Budget say two-thirds of the 1,800 "extra" debt-management staff mentioned by Murray were already working for HMRC as of last year. Just 600 are set to be new hires, according an explanation of the £262m funding settlement covering their work set out in HM Treasury's Red Book for the Budget.
The Red Book said the funding would allow 1,200 officials currently working on debt management to stay on over the coming five years rather than leaving or being redeployed as was previously scheduled. Other Budget materials described the 1,800 staff as being "retained or recruited".