HM Revenue and Customs permanent secretary Jim Harra has said the department will recruit an extra 2,000 staff during this financial year – in a move seemingly at odds with the government’s proposals to slash the civil service’s headcount by 20%.
The plan, set out in HMRC’s annual report and accounts last week, is aimed at filling existing vacancies and increasing the ranks of debt-management staff under a three-year programme.
During the height of the coronavirus pandemic, HMRC paused the majority of its debt-collection activities. As a result, its debt balance – defined as tax and tax credit debt owed to the department that is not subject to appeal – rocketed to £72bn in August 2020.
The debt balance had fallen to £41.6bn bythe end of March this year, but Harra warned in his introduction to HMRC’s annual report that the figure is expected to remain above pre-pandemic levels for “some years”.
“We remain focused on tackling the balance this year, and will be recruiting an extra 2,000 staff, but I want to be upfront about the fact that today’s increasingly challenging economic outlook will mean more customers struggling to meet their tax obligations,” he said.
“We are clearing record levels of debt, but the amount of new debt being created is significantly higher than before the pandemic.
“In this context, we expect the debt balance to remain above pre-pandemic levels for some years. We’ll continue to do everything we can to help customers with short-term financial difficulties, but we’ll carry on taking action where customers don’t engage with us or refuse to pay.”
The HMRC annual report and accounts said the debt balance was £18.2bn at the end of the 2017-18 financial year, £19.1bn at the end of March 2019, and £22.4bn at the end of 2019-20.
It said the March 2022 debt balance figure comprised £39.2bn of tax debt, equating to 5.4% of tax revenue, and £2.4bn of tax credits debt.
The report said the 2,000 staff being hired in the current year would mean HMRC had people available to support customers in need of help and would contribute to some of the 500 additional debt-management staff the department has received funding for over the next three years.
According to the report, the HMRC departmental group – which includes Revenue and Customs Digital Technology Services Ltd and the Valuation Office Agency – had 67,085 full-time equivalent employees at the end of the last financial year.
Of those, 62,709 were at the core department, 736 were at RCDTS, and 3,640 were at the VOA.
It said a total of 10,844 FTE staff were were recruited during 2021-22, and 4,496 FTE staff left the group over the same period.