Revenue to sell off its offices

The Inland Revenue is considering selling its 450 tax offices and leasing them back in a deal to reduce administration costs. Civil service unions said it could threaten the ability of the Revenue to meet its targets on tax collection.

A spokesman for PTC, the largest civil service union, said: "They haven't made a final decision over this but if they go ahead, the whole move towards self-assessment could be threatened." It would also threaten government plans to increase the tax take through investment in anti-fraud measures. He said the sale would result in the closure of many of the 450 tax offices because that would be the only way in which the new private owner could make a profit quickly.

A decision on the plan is likely to be made before the election. The Contributions Agency is already planning a similar sale of its property and there are fears that up to half its offices may be closed.

However, the Revenue is not proceeding with plans to privatise the assessment of tax liabilities by tax inspectors because of the issues of confidentiality involved, after a day of ministerial confusion over the issue.

On the BBC Today programme, the Secretary of State for Health, Stephen Dorrell, denied that the Government intended to privatise the Inland Revenue, although he confirmed that some of the department's work was now being handled by private contractors.

The Treasury Financial Secretary, Michael Jack, confirmed that there were plans to consider private sector involvement in the management of the Revenue offices, but said the Government has been "misinterpreted" and inaccurate reports would be upsetting for many people.