HC Deb 30 July 1981 vol 9 cc1155-6
11. Mr. Chapman

asked the Chancellor of the Exchequer what is his estimate of the total administrative costs in the current financial year of the Inland Revenue and Her Majesty's Customs and Excise Department, respectively; and how those figures compare with the financial year 1976–77.

Mr. Peter Rees

The total administrative costs of the Inland Revenue and the Customs and Excise for 1981–82 are estimated at £792 million and £339 million, respectively. These compare with £452 million and £191 million for 1976–77.

Mr. Chapman

Have the cost-yield ratios of collecting taxes changed significantly in any way in the last five years? To be more specific, is the average cost of collecting taxes by the Inland Revenue still under 2 per cent.? Is the average cost for collection by the Customs and Excise still under 1½ per cent.?

Mr. Rees

The Inland Revenue cost of collection remains in the range of 1.9 per cent. to 2 per cent. I am happy to tell my hon. Friend that the cost for the Customs and Excise has fallen from 1.76 per cent. to 1.3 per cent., which demonstrates that both Departments are using their resources more effectively.

Mr. Grieve

Will my hon. and learned Friend consider the fact that administrative costs might be reduced by the adoption of the American practice of self-assessment?

Mr. Rees

That is an interesting development which, naturally, this Government have considered and will continue to consider. It is not a simple matter, as my hon. and learned Friend will recognise. It would demand a considerable recasting of the tax system. It might also demand rather more prompt payment of tax by taxpayers. If the American system were adopted, it might also involve stiffer penalties.