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MPs are starting to pile pressure on HMRC by launching an inquiry into its effectiveness only weeks after it was scrutinised for a PAYE blunder that resulted in millions of people paying the incorrect tax.
 
The move also comes only a week after staff were told that 13,000 jobs would be axed due to a 25% budget cut over the next four years in the wake of the coalition government's Comprehensive Spending Review. The job losses come on top of the 25,000 posts lost since the department was set up in 2005.
 
Labour MP George Mudie, chairman of the new Treasury sub-committee in charge of the probe, said: "HMRC was criticised heavily over the end-of-year reconciliations. Like most government departments, it will have to make sizeable cuts in administration. We will examine how HRMC is doing its job, whether it can do it better and what the future holds following the Spending Review settlement."
 
The sub-committee will focus on the agency's performance and “whether it is delivering its key aims” as well as the implications of working under a reduced budget. MPs will also explore whether the department's will be able to deliver on the government's aims of combating tax avoidance and evasion - a priority to which it has assigned £900m over the next four years.
 
Other areas of interest include whether reforms to the PAYE system are necessary and what the organisation's future priorities should be. Lesley Strathie, the revenue's chief executive, is expected to be among those called to give evidence in person.
 
The investigation will build on the findings of a previous inquiry, which was published earlier this year and suggested that morale inside the government agency was so low that plans to tackle aggressive tax avoidance were under threat. HMRC personnel were said at the time to be the most unhappy in Whitehall.