HM Revenue & Customs' £32bn shortfall is the fault of the department as well as the recession as its complex tax system and cost-cutting do little for the efficiency of tax collection, says PKF. John Cassidy, tax investigations partner, said: 'HMRC looks to save money by outsourcing tax administration to the taxpayer through self-assessment. But the increasingly complex tax rules mean that fewer taxpayers get their tax returns right, especially when they are focusing 100% on keeping their business afloat'. PKF has slammed the merger of the Inland Revenue and HM Customs & Excise by saying HMRC has compromised its staff morale - a recent survey revealed only 35% of staff feel valued - in return for 'constant reorganisations' to make it look more efficient to ministers. Cassidy added: 'It seems that large parts of HMRC have lost sight of the key task of getting money in.' The 'bribe and save' scheme of the New Disclosure Opportunity came under fire as PKF said it is a 'cheap' way for the taxman to be 'backed up by the threat of the new higher tax penalties if you don't play ball'. The tax investigations policy has also changed, with HMRC focusing more time and money on high risk cases which could pose a problem by sending out the wrong message. Cassidy noted: 'When cash is tight, some businesses not previously identified as high risk may decide to be "economical with the truth" to keep their tax bills down.' 'All these short term cost cutting measures have stored up problems that are now emerging as the economy falters Simpler tax legislation and proper investment in tax collection systems - particularly in making full use of the huge amount of intelligence held on potential investigation cases - seems like a good place to start,' said Cassidy.