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Good morning, I鈥檓 Ruth Owen, HMRC鈥檚 Director General of Personal Tax.

You鈥檝e heard already from Lin [Lin Homer, HMRC Chief Executive and Permanent Secretary] about our performance and achievements over the last year.

Lin also touched on 鈥楤uilding our Future鈥�, our ambitious programme of work that we鈥檙e undertaking to transform our services over the coming years.

I鈥檇 like to talk to you now about what Building our Future means for our customers and for the UK.

This includes setting out the vision for our long-term future, where we鈥檙e going as an organisation through to 2020 and beyond; and what the future HMRC will look like.

So, not too much of a challenge for me.

You鈥檝e heard already today about our achievements over the last year, and the vital work HMRC does across our broad spectrum of activity. We鈥檝e done some amazing things, including bringing in over 拢505 billion in revenues over the past year (our best ever performance) to fund UK public services.

We recognise the vital purpose we have as an organisation, to enable the country to operate effectively.

We want to help the honest majority pay their tax correctly and on time.

There is a strong tradition of public duty in tax collection. We have a history going back over 1,000 years from Ethelred the Unready through to the recent past of the Inland Revenue and Her Majesty鈥檚 Customs and Excise.

We are very proud of the job we do, to collect the tax for the UK.

Despite this proud history, there鈥檚 still more to do. In particular, we know that our customer service levels aren鈥檛 yet where they need to be, although we continue to improve year-on-year.

Building our Future: our mission

The challenges that HMRC faces today are the same as almost every other organisation, to achieve better outcomes at lower cost.

We have four big priorities:

Firstly, bringing in the money. The UK deficit is 拢1.2 trillion, and as we鈥檝e seen recently, barely a week goes by when tax and public spending aren鈥檛 headline news.

The government has allowed us to reinvest around 拢1bn of efficiency savings to tackle evasion, avoidance, criminal attack and debt.

It鈥檚 a huge vote of confidence in us, but it comes with some stretching targets: we are on track to deliver an additional 拢18 billion in compliance revenues in 2014 to 2015 for the government鈥檚 investment of 拢1 billion.

Our second priority is improving customer services. Our customer service levels are much improved, but they鈥檙e still not yet where we need them to be.

The way we do things isn鈥檛, for example, always efficient or as straightforward for customers, who sometimes have to battle their way round our organisation to get the help they need.

People鈥檚 tax affairs are far more complex than they were even ten years ago and we need to make them feel easier to get it right first time, and not to have to waste their time on tax.

And rightly the public expects the same high levels of service from us as it does from banks, retailers and other service organisations.

Our third priority is making sustainable savings. As one of the biggest civil service departments, we have to play our part in reducing the deficit by delivering efficiencies.

We鈥檝e achieved impressive results while making major efficiencies and budget reductions. By the end of 2015 to 2016, we鈥檒l have made 拢1.4 billion in savings over five years.

Our savings have been driven by our smaller workforce, shrinking estate and our investment in innovative IT, which has allowed us to do more electronically.

These cost pressures aren鈥檛 going to go away. This is why we鈥檙e continuing to get smaller, cheaper and better.

Our final priority is including and involving our people.

We need to make HMRC a great place to work. In return we need our people to be flexible, and ready to learn new skills and do new things.

Building our Future for our customers

Like any good organisation, we need to continually adapt and evolve to meet the demands of the times we鈥檙e in.

Put simply, the needs and expectations of our customers continue to change, and it鈥檚 vital that we as an organisation do the same!

Customers want:

• straightforward
• personalised
• convenient
• effective

All in one place; not needing to talk to multiple lines of business.

Our aim is to design a service around the customer, to enable them to get it right first time.

In 2010 to 2011 we answered only 48 per cent of customer calls. Last year, it was 79 per cent. Meanwhile, our post handling has improved from just over 50 per cent of mail cleared within 15 working days to 83 per cent today.

That means 21 per cent of calls don鈥檛 get through first time. And we know that people still struggle to get through to us during our peak times, especially the run-ups to the Self Assessment and tax credits deadlines, when millions of people need to get in touch with us.

Equally, our processes, letters and forms aren鈥檛 always as straightforward as they should be, which makes it more complicated and confusing for our customers.

That鈥檚 why we need to make the tax and payments system feel simpler and more straightforward for people while delivering the same high levels of service that the public enjoy in their everyday lives as consumers and citizens.

In future, everything that we do will start with what we know about our customers, and how we can make it straightforward for them to register, file and pay the right tax at the right time.

Digital technology is the key that unlocks all of this.

The public increasingly wants things to be delivered through digital channels. They already shop, bank and book holidays online, so it鈥檚 only logical to deal with us in the same way.

We鈥檒l provide online services that can be accessed from PCs, laptops, tablets and smart phones that are so straightforward and convenient that everyone who has a choice will want to use them.

Everyone and every business will have a personal online tax account, where they鈥檒l be able to file, pay and make any changes to circumstances online; across all of their taxes, in a single place. Getting our online services right means we can automate simple tasks, which will make it easier for the honest majority to get their taxes right and harder for them to make mistakes, reducing the burden on us and our customers.

We know individuals and businesses don鈥檛 differentiate between separate parts of HMRC when they contact us, and neither should they. They simply want to deal with all of their tax affairs in a single place.

We鈥檙e therefore moving to a 鈥榦nce and done鈥� approach; resolving issues in one go, so customers aren鈥檛 passed from one part of our organisation to another and, where we can, we resolve issues at first contact.

And by making best use of the data we hold, we will be able to present a service that feels personal to our customers.

When they deal with us it鈥檒l be as though they鈥檙e picking up a conversation where they left off; rather than starting all over again, or having to repeat themselves or tell us information we already know.

In many ways, we鈥檙e offering all customers a digital version of the personalised, tailored approach that our Customer Relationship Managers currently offer to large businesses and wealthy individuals.

Millions of our customers are represented by tax agents, including some of you here today. We want to give all agents access to a digital portal to do more for their clients online too. And we plan to give a higher level of access to those agents who meet certain quality standards.

We鈥檒l still offer services through other channels to those who really need them, including over the phone and through face-to-face visits. We鈥檒l also make it easier for friends, family and charities to do things for the people they represent.

We have, for example, just replaced our network of enquiry centres with a new service offering tailored support to customers who need extra help to get their taxes and entitlements right.

Our enquiry centres offered a fantastic service, but only to those who could reach them. They were spread unevenly across the UK and were difficult for many of our customers to get to. As a result, the numbers of people using them continued to fall.

Our new service addresses this by ensuring that those customers who do need enhanced support can now receive specialist, more-in-depth help, over the phone. And if they do need further help, then face-to-face appointments can be arranged at a location that is convenient for them, at their home if necessary.

All of this means new skills and more interesting jobs for our people

Building our Future: data-led compliance

We know that the overwhelming majority of the UK鈥檚 business and individuals are fundamentally honest. We want to make things as straightforward as possible for them; delivering services in a way that reduces opportunities for error and encourages accuracy.

This is a big shift from our previous approach, which has been much more about responding to error and omission after it has happened, and trying to put it right.

At the same time, we will continue to make it hard for the dishonest minority to cheat the system.

By joining up and analysing the data we hold, we will be able to tailor the services we offer according to our customers鈥� circumstances, past history and preferences.

That means we鈥檒l have a better view of the risk of each customer鈥檚 behaviour and tailor our compliance activity accordingly.

With the support of groundbreaking IT, we will increasingly follow the promote, prevent, respond approach for our enforcement and compliance activities.

We will:

• promote good compliance. That means reaching out to customers through online help videos, social media, and web forums. We鈥檒l also design compliance into all of our systems and processes
• prevent non-compliance by designing-out error and helping people get things right from the start, or prompting them in real-time if we think they鈥檝e missed something, based on what we know about them or their business. Our aim is for as many customers as possible to self-serve and to keep their tax accounts up-to-date themselves; getting their tax affairs in good order without a lot of back-and-forth with HMRC
• respond to deliberate non-compliance. We鈥檒l use data and analytics to better identify risks so our compliance teams will be able to intervene where they will have the maximum impact

Our compliance teams鈥� work will be increasingly about handling more complex and challenging cases, so we will need to have new digital and analytical skills.

Our work will be supported by the type of groundbreaking IT that we have already developed. This includes systems such as Connect and Adept, which enable us to sift through billions of pieces of customer data at the push of a button.

Building our future digitally

We know HMRC is a digital pioneer. We鈥檙e already responsible for more than two-thirds of all government online transactions and the number of people using our services is increasing all the time.

It鈥檚 not new: Customs and Excise introduced the world鈥檚 first real-time customs entry and inventory system in 1971. Today, 99 per cent of customs clearances are done electronically, and nine out of ten in under five seconds.

In 2005 to 2006, just one in five people filed their Self Assessment online. We鈥檒l soon be in a position where 9 out of 10 people use the internet to complete their return.

We now have 拢200 million to invest in new online services.

And our aim is for everyone to have access to a personal online tax account where they can see all of their taxes in a single place.

And we want more than a million businesses and individuals to be using our new digital services by next summer, rising to eight million by the end of 2015.

The first phase of our journey to achieving this is about putting all our forms and publications online, reducing the number of phone, face-to-face and post enquiries.

In 2013 to 2014, we sent out 200 million letters with a staggering 250 million forms or pieces of guidance. Over the next 12 months we aim to reduce our inbound post by 30 per cent (that鈥檚 around 6 million fewer letters and forms).

And we鈥檝e also rationalised 1700 paper forms down to 500, and will convert these all to online forms soon.

We鈥檙e also introducing a digital scanning service, which means we鈥檒l be able to deal with customer correspondence from our computer screens within 48 hours of it being sent in, without the need for sorting, cataloguing and physically moving it around the country.

We know that individuals and businesses increasingly want things to be delivered through the immediacy and convenience of a digital channel.

We鈥檒l reflect this change by providing web services that can be accessed from PCs, laptops, tablets and smart phones, and which are so straightforward and convenient that everyone who has a choice will want to use them.

To give you a flavour of some of our exemplar digital services that are already in live pilots these include:

• PAYE Online: ultimately enabling 41 million PAYE customers to report online changes to their circumstances affecting their tax code
• Digital Self Assessment: enabling Self Assessment customers to receive email alerts from us instead of letters. They鈥檒l also be able to log-in to a secure, personalised portal with easy access to online guidance
• Your Tax Account for business: making it simpler for 4.9 million small businesses to manage their tax affairs in a single place, including a personalised home page showing their liabilities and payments across Income Tax, Corporation Tax, VAT and PAYE for Employers -* Agent Online Self Serve: giving agents a new, single and more secure process to register with HMRC and deal with us across a range of taxes on behalf of their clients. We will launch this later this year.

With impeccable timing for the purposes of today, the tax credits renewals deadline is now just two weeks away.

This year, as well as being able to renew by post and by phone, most claimants are now able to renew online, at 188体育, or via the HMRC App. So far, more than a quarter of a million have done so.

This is a great example of how moving towards a customer service model that embraces the digital future will address the customer service issues we鈥檝e had in the past.

Hopefully it鈥檒l also mean that we will no longer see some of the top ten excuses given by claimants for missing the deadline, including the somewhat familiar 鈥榤y dog ate the paperwork.鈥�

Under the future HMRC, customers will be able to serve themselves online, in their own time, when convenient to them. The benefits of this will be:

• customers will not have to sit on the phone to wait to speak to us
• customers will have the opportunity to self-serve, at a time and place that鈥檚 more convenient to them
• for HMRC, we will not need so many people deployed on the phones at peak times (for example, like the 2000 this year)

Digital will change the way we work and we need to ensure that we have the skills we need to build our digital future.

We鈥檝e already started recruiting for our new digital delivery centre in Newcastle, which will bring together people with the skills to design, test and build our new digital services.

We need people who really understand social digital channels, are fluent in the use of social media and who are able to interact with customers through digital channels.

What鈥檚 very clear is that digital and data services are at the heart of everything we are doing; for online customer services, to personalise our relationship with customers and stakeholders, for compliance and for our people.

Building our Future together

I鈥檝e outlined to you today where we鈥檙e going as an organisation, but equally important what this means for our customers and the people who serve them.

We鈥檙e going to bring our IT and infrastructure up-to-date with most of our teams working more closely together in a smaller number of large, modern, regional centres, where our employees will have more opportunities to build their careers.

We will be investing in our people, with new skills to provide the level of service and rigour we aspire to as a modern tax administration.

And as we become more efficient, we will continue to reduce in size. It鈥檚 a process that鈥檚 already well advanced: when HMRC was created in 2005, we had 96,000 full-time equivalent members of staff in 593 offices. We now have fewer than 60,000 FTEs in 190 offices, and by April 2016, we expect to have reduced our workforce further, to 52,000 FTEs.

Conclusion

That鈥檚 our vision for our long-term future of HMRC, an organisation that is absolutely critical to the UK. We鈥檒l give you, our customers, a modern, efficient service, delivered in a modern and flexible way that is convenient for you.

Ultimately, the changes that we鈥檙e making mean we will be able to deliver even more for our customers, for the taxpayer, and for the UK.

I hope you are as optimistic about the proposals as we are, and we hope you and your members and colleagues will soon start to see and reap the benefits I鈥檝e outlined.

It鈥檚 a big challenge, but one we know we can deliver. We鈥檙e looking forward to continuing to work with you throughout the process, to see what is working and, equally importantly, identify opportunities for further improvement.

Your continued feedback, as ever, will be crucial in ensuring this is a seamless change in the way we do business.

Thank you for listening.