Taxman loses out – as best staff are sent abroad in £25m aid scheme

THe taxman is being undermined by a foreign aid programme which sends expert collectors overseas to help poor countries.

Under a £25million scheme, British tax experts are sent to countries in Africa and Asia to help them collect money.

But an official report has warned it may be damaging efforts in Britain because HMRC officials are not doing their day jobs and it is difficult to find substitutes. Aid money cannot be used to train replacements at HMRC, adding an additional cost to the scheme.

Funds from the £13billion aid budget are going towards improving tax regimes in ten countries including ethiopia and Pakistan. Officials defend the scheme, saying that if the countries collect more tax they will be less dependent on aid.

But last night critics slammed HMRC for sending staff overseas when it faces trouble at home. The taxman is under fire for long telephone waiting times, problems with a childcare website and spiralling overpayments of tax credits.

Tory MP Andrew Percy said: ‘It does seem mad to spend taxpayers’ money on sending tax officials abroad when HMRC is in such a mess.’

The project, known as the Tax Capacity Building Unit and Tax expert Unit, is a ten-year programme costing £24.7million. A report seen by the Mail says the Government is committed to ‘skills sharing’ and cites the need for ‘ robust’ tax systems in developing countries.

But it warns that recruiting staff and sending them overseas is damaging the taxman’s work in the UK. The report says: ‘There are still some concerns around impact to HMRC performance caused by experts’ release from core roles.’

The money spent on the programme counts toward the UK target of spending 0.7 per cent of national income on foreign aid, except the cost of training staff to fill gaps, which cost £1,148,056 last year.

Despite millions already having been spent, the report concludes it is ‘too early’ to judge the impact of the programme. An HMRC spokesman said: ‘ HMRC always prioritises its core work at home and work ... in developing countries doesn’t undermine domestic efforts.’

A report previously revealed that an estimated £1.57billion in tax credits was overpaid in the 2015-16 tax year, up 15 per cent on the previous year, after a rise in benefit fraud and HMRC errors.

The National Audit Office warned that the problem is set to worsen as the department becomes more overstretched.