Treasury to scrap valuation quango amid efficiency drive
The Valuation Office Agency will be folded into HM Revenue & Customs (HMRC), the tax minister has said, in the latest sign of the government’s efforts to trim away fat from the operations of the state.
The arms length body responsible for valuing properties to determine tax rates, which spans £60bn worth of valuation each year, will deliver a 5 to 10 per cent reduction in its current operating costs, the Treasury said.
It follows a number of similar government announcements to reduce the number of quangos, including proposals to scrap the Payments System Regulator, the axing of NHS England and the swingeing workforce cuts being made to the Cabinet Office, accused of duplication.
Exchequer secretary James Murray said: “We are determined to reduce the hassle of the tax system for British businesses and taxpayers.
“Ending the inefficiency and duplication of a standalone VOA will help us drive change faster and improve value for money.”
Murray added: “This Government is determined to make public services more productive, helping to deliver our Plan for Change and put more money in peoples’ pockets”.
Efficiency, efficiency, efficiency
Echoing announcements from Rachel Reeves’ Spring Statement in March, the government has restated its intention to simplify, modernise and more robustly enforce the tax system.
With razor-thin headroom for government spending, the Chancellor is hoping to recoup an extra £1bn in tax revenue each year.
The move is one of a package of 41 measures unveiled in Parliament today as part of the government’s Tax Update.
Murray has also announced changes to the VAT Capital Good Scheme – which allows businesses to recoup taxes on expensive items based on how much they are used – with the qualifying threshold hiked up from £250,000 to £600,000, and computer equipment exempted from the scheme.
Though the winding down of the VOA is being badged up as an efficiency drive aimed at improving the experience of doing taxes, HMRC itself has come under fire for its “poor service”.
A Federation of Small Business (FSB) report last week found that small firms are spending an average of £4,500 on tax compliance – a collective sum of £25bn.
Darwin Friend, head of research of the TaxPayers’ Alliance, said of the news: “Abolition of the Valuation Office Agency does give the appearance of a government that is at least in principle serious about tackling the quangocracy.
“However, what is likely to happen is that the functions of this body and its quangocrats will simply be absorbed into HMRC – another quango. Given that HMRC can barely deliver its own responsibilities, taxpayers will be deeply sceptical that they will see an improvement in services.
“Unless Labour addresses the terrible taxation system that necessitates this absurd system of council tax and business rate valuations, they’ll be trying to light the bonfire with a wet match.”