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HMRC cost-cutting measures could backfire

HM Revenue and Customs has this week announced plans to save an estimated £1.25 million per annum by ending the practice of sending copy tax correspondence and tax notices to individuals and their financial advisors. However, there are now serious concerns that this particular cost-cutting measure could backfire dramatically if, as expected, individuals fail to pass on correspondence from the revenue to their tax advisor.

When you consider that in the year to April 2009 an enormous £42 billion of tax went uncollected, compared to the £38 billion uncollected in the previous 12 months, perhaps there is greater scope for efficiency and an increase in income if further focus was placed upon this particular area. Starving advisors of vital information regarding their clients would seem to be a very short-sighted and potentially dangerous strategy to implement, especially in the current environment of mistrust and disdain towards HM Revenue and Customs.

Each time we hear problems regarding taxation, tax codes and the collection of tax this further strengthens the UK coalition government's plans to overhaul the UK tax system which has grown too large and too cumbersome. However, an overhaul of the system will cost potentially millions of pounds and take many years to complete.

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