Under the restructure, HMRC is looking to replace 170 local offices with 13 regional centres, in a move which is expected to result in around 5,000 job losses.
Originally set out in 2001, the restructure was announced as part of wider cost-cutting exercise designed to provide better services at a lower cost, as HMRC currently has more space than it needs, with much of it in a poor condition.
However, National Audit Office (NAO), an independent parliamentary body, has revealed the UK tax office is reviewing the proposals amid fears there could be major disruption to services as a result of the restructure, with HMRC struggling to find suitable premises.
According to the FT, the total cost of the estate over the next decade has risen by an estimated £600m ($731m, €694m) — or a fifth — since 2015, due to buildings’ higher than expected running costs.
“During the transition to regional centres, HMRC must ensure that its service to taxpayers and its ability to collect tax revenue are not impaired,” the NAO said in a statement.
“It will therefore need to recruit to its new centres and train new staff, while managing redundancies and the moves of existing employees and operations into new buildings.
“It has concluded that its original plans were over-optimistic about the availability of suitable properties and carried too high a risk of disruption to its business, as they involved moving or replacing too many staff too quickly, while delivering other major change programmes in parallel.”
Meg Hillier, who chairs the public accounts committee, another independent parliamentary body, said: “The government’s early over-optimism is once again going to increase costs to taxpayers, by £594m over 10 years, and impact their own staffs’ livelihoods.”
Meanwhile, in response to criticisms, a HMRC spokesman told British news channel Sky: “Our 13 new regional centres are an essential part of our work to modernise HMRC and provide an even better service for our customers, while delivering annual savings to the taxpayer of over £80m from 2025/26.
“It also means modern offices for our staff, with the latest technology, better collaboration between teams, local training and wider career opportunities.”