MEMORANDUM – CONFIDENTIAL

From: M Holdfast
To: Senior Management Team
Subject: New employment opportunities.

Team members will be aware that the new coalition government is continuing the staff reduction policies of the previous administration. The eventual target remains the same: for HMRC to have a total staffing level of three full-time equivalents and a work experience student (with own laptop).

However, discussions prior to the Budget also maintained the previous policy of creating job opportunities for the staff whose jobs will be axed/reallocated/rightsized, and I should like to draw your attention to some of them.

7,500 programming jobs with tax software firms as a result of the decision to change the rate of CGT part way through the year.

This is an example of the way in which a small change from the more obvious alternative of altering the rate from next April has resulted in significantly higher levels of private sector employment.

This change will also create around 100 further employment or self-employment opportunities for technical staff to handle the consequent IR35 obligations.

5,000 jobs reprogramming tills for the new VAT rate in January. This is a continuation of the very successful 2009/10 programme.

Unfortunately we have not, this time, been able to put in place a requirement to switch the rate back again within the year, but we are still hopeful of persuading ministers to make a further increase in the near future.

100 posts in private firms to enable MPs to make best use of their new tax relief on travelling expenses. This would particularly suit PAYE audit staff willing to view their skill-set in a ‘flexible’ way.

I do, however, regret to inform the team that the current administration seems determined to destroy the good work done over the past two years in the field of pensions.

This is an area where we created a significant demand for private sector employment by successfully drafting near-impenetrable legislation restricting higher rate relief on contributions.

We have managed to maintain this demand during the transitional period, and have created sufficient uncertainty about the future to ensure this will continue for a while, but estimates of the envisaged long-term employment gains from this project are being revised downwards.

Rest assured that policy advisers will continue to propose and defend tax policies that are good for Britain, by creating private sector employment opportunities for experienced HMRC staff.

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