Non-ministerial department of the UK Government
Law enforcement agency
HM Revenue and Customs
Welsh
:
Cyllid a Thollau Ei Fawrhydi
|
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|
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Formed
| 18 April 2005
; 19 years ago
(
2005-04-18
)
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Preceding agencies
| |
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Employees
| 63,223
[1]
FTE
|
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Annual budget
| £
4 billion (2018?2019)
[2]
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|
Operations jurisdiction
| United Kingdom
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Constituting instrument
| |
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Specialist jurisdictions
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Headquarters
| 100 Parliament Street, London, SW1A 2BQ
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Elected officer responsible
| |
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Agency executives
| - Sir Jim Harra
, Chief Executive
- Angela MacDonald, Deputy Chief Executive
|
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Child agency
| |
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|
gov.uk/hmrc
|
His Majesty's Revenue and Customs
(commonly
HM Revenue and Customs
, or
HMRC
)
[4]
[5]
is a
non-ministerial
department
of the
UK Government
responsible for the
collection
of
taxes
, the payment of some forms of
state support
, the administration of other regulatory
regimes
including the
national minimum wage
and the issuance of national insurance numbers. HMRC was formed by the merger of the
Inland Revenue
and
HM Customs and Excise
, which took effect on 18 April 2005.
[6]
The department's logo is the
Tudor Crown
enclosed within a circle.
Departmental responsibilities
[
edit
]
The department is responsible for the administration and collection of
direct taxes
including
Income Tax
,
Corporation Tax
,
Capital Gains Tax
(CGT) and
Inheritance Tax
(IHT),
indirect taxes
including
Value Added Tax
(VAT),
excise duties
and
Stamp Duty Land Tax
(SDLT), and environmental taxes such as
Air Passenger Duty
and the
Climate Change Levy
. Other aspects of the department's responsibilities include
National Insurance
Contributions (NIC), the distribution of
Child Benefit
and some other forms of state support including the
Child Trust Fund
, payments of
Tax Credits
, enforcement of the National
Minimum Wage
,
[7]
administering anti-
money laundering
registrations for
Money Service Businesses
[8]
and collection and publication of the trade-in-goods statistics.
[9]
Responsibility for the protection of the UK's borders passed to the
UK Border Agency
within the
Home Office
on 1 April 2008 and then to
UK Border Force
and the
National Crime Agency
in 2013..
Powers of officers
[
edit
]
HMRC is a law enforcement agency which has a strong cadre of criminal investigators responsible for investigating Serious Organised Fiscal Crime. This includes all of the previous HMCE criminal work (other than drug trafficking but used to include this up until 2008) such as tobacco, alcohol, and oils smuggling. They have aligned their previous Customs and Excise powers to tackle previous Inland Revenue criminal offences. They are responsible for seizing (or preventing the loss of) billions of stolen pounds of
HMG
's revenue. Their skills and resources include the full range of intrusive and covert surveillance and they are a senior partner in the Organised Crime Partnership Board.
HMRC criminal investigation officers have wide-ranging powers of arrest, entry, search and detention. HMRC have the power to apply for orders requiring information to be produced; apply for and execute search warrants; make arrests; search suspects and premises following arrest; and recover criminal assets through the Proceeds of Crime Act 2002.
[10]
The main power, under
section 138
of the Customs and Excise Management Act 1979 (as amended by
section 114
of the
Police and Criminal Evidence Act 1984
) is to arrest anyone who has committed, or whom the officer has reasonable grounds to suspect has committed, any offence under the Customs and Excise Acts
[11]
as well as related fraud offences.
On 30 June 2006, under the authority of the new
Labour
home secretary
,
John Reid
, extensive new powers were given to HMRC. Under chairman Sir David Varney, a new Criminal Taxes Unit of senior tax investigators was created to target suspected fraudsters and criminal gangs. To disrupt and clamp down on criminal activity. This HMRC/CTU would pursue suspects in the same way the
US
Internal Revenue Service
caught out
Al Capone
on
tax evasion
. These new powers included the ability to impose penalties without needing to prove the guilt of suspected criminals; extra powers to use sophisticated surveillance techniques, and for the first time, to have the same ability as customs officers to monitor suspects and arrest them.
[12]
On 19 July 2006, the executive chairman of HMRC, Sir David Varney resigned.
[13]
HMRC is also listed under parts of the British government which contribute to intelligence collection, analysis and assessment. Their prosecution cases may be co-ordinated with the
police
or the
Crown Prosecution Service
.
History
[
edit
]
The merger of the Inland Revenue and HM Customs & Excise was announced by then
chancellor of the Exchequer
Gordon Brown
in the
budget
on 17 March 2004. The name for the new department and its first executive chairman,
David Varney
, were announced on 9 May 2004. Varney joined the nascent department in September 2004, and staff started moving from
Somerset House
and New Kings Beam House into HMRC's new headquarters building at
100 Parliament Street
in
Whitehall
on 21 November 2004.
The planned new department was announced formally in the
Queen's Speech
of 2004 and a
bill
, the Commissioners for Revenue and Customs Bill, was introduced into the
House of Commons
on 24 September 2004, and received
royal assent
as the
Commissioners for Revenue and Customs Act 2005
on 7 April 2005. The Act also creates a
Revenue and Customs Prosecutions Office
(RCPO) responsible for the
prosecution
of all Revenue and Customs cases.
The old Inland Revenue and Customs & Excise departments had very different historical bases, internal cultures and legal powers. The merger was described by the
Financial Times
on 9 July 2004, as "mating the C&E terrier with the IR retriever".
[14]
For an interim period officers of HMRC are empowered to use existing Inland Revenue powers in relation to matters within the remit of the old Inland Revenue (such as
income tax
,
stamp duty
and
tax credits
) and existing Customs powers in relation to matters within the remit of the old Customs & Excise (such as
value added tax
and
excise duties
). However, a major review of the powers required by HMRC was announced at the time of the 2004
pre-budget report
on 9 December 2004, covering the suitability of existing powers, new powers that might be required, and consolidating the existing compliance regimes for surcharges, interest, penalties and appeal, which may lead to a single, consolidated enforcement regime for all UK taxes, and a consultation document was published after the 2005 budget on 24 March 2005. Legislation to introduce new information and inspection powers was included in the Finance Act 2008 (Schedule 36). The new consolidated penalty regime was introduced via the Finance Act 2007 (Schedule 24).
As part of the
spending review
on 12 July 2004, Gordon Brown estimated that 12,500 jobs would be lost as result of the merger by March 2008, around 14% of the combined headcount of Customs (then around 23,000) and Inland Revenue (then around 68,000). In addition, 2,500 staff would be redeployed to "front-line" activities. Estimates suggested this may save around £300 million in staff costs, out of a total annual budget of £4 billion.
The total number of job losses included policy functions within the former Inland Revenue and Customs which moved into the
Treasury
, so that the Treasury became responsible for "strategy and tax policy development" and HMRC took responsibility for "policy maintenance". In addition, certain investigatory functions moved to the new
Serious Organised Crime Agency
, as well as prosecutions moving to the new Revenue and Customs Prosecution Office.
A further programme of job cuts and office closures was announced on 16 November 2006.
[15]
[16]
Whilst some of the offices closed were in bigger cities where other offices already exist, many were in local, rural areas, where there is no other HMRC presence. Initial proposals indicated that up to 200 offices would close and a further 12,500 jobs lost from 2008 to 2011.
[17]
[18]
In May 2009,
staff morale
in HMRC was the lowest of 11 government departments surveyed.
[19]
In 2013, HMRC began to introduce an update to the
PAYE
system, which meant it would receive information on tax and employee earnings from employers each month, rather than at the end of a tax year. A trial of the new system began in April 2012, and all employers switched by October 2013.
[20]
[
needs update
]
In 2012,
Revenue Scotland
was formed and on 1 April 2015 it took HMRC responsibility to collect
devolved taxes in Scotland
.
[21]
In 2015
Welsh Revenue Authority
was formed and on 1 April 2018 it took HMRC responsibility to collect devolved taxes in Wales.
On 12 November 2015, HMRC proposed to replace local offices with 13 regional centres by 2027.
[22]
[23]
Governance structure
[
edit
]
The board is composed of members of the executive committee and
non-executive directors
. Its main role is to develop and approve HMRC’s overall strategy, approve final business plans and advise the chief executive on key appointments. It also performs an assurance role and advises on best practice.
The
Treasury minister
responsible for HMRC is the
financial secretary to the Treasury
, Nigel Huddleston MP
Chairman
[
edit
]
The chairman of HMRC was an executive role until 2008. Mike Clasper served as a non-executive chairman. From August 2012, the post was abolished with a 'lead non-executive director' chairing board meetings instead.
Chief Executive
[
edit
]
The chief executive is also the first
permanent secretary
for HMRC and the accounting officer.
Executive chair and permanent secretary
Non-executive board members
[
edit
]
Non-executive board members as of November 2019
[28]
:
- Mervyn Walker (lead non-executive director)
- Michael Hearty
- Simon Ricketts
- Alice Maynard
- Juliette Scott
- Paul Morton
- Patricia Gallan
Personnel
[
edit
]
Source:
[29]
See
civil service grading schemes
for details.
Performance
[
edit
]
HMRC collected £660 billion for the
Treasury
in 2018/19.
[31]
It estimated that total theoretical tax liabilities in that year were £629 billion, but £31 billion was not collected due to the "
tax gap
", made up of money lost to
tax evasion
,
tax avoidance
, error and unpaid tax debts. This equates to a collection rate of 95.3% (up from 92.7% in 2005-6).
[31]
At the end of March 2009, HMRC was managing 20 million 'open' cases (where the department’s systems identify discrepancies in taxpayer records or are unable to match a return to a record) which could affect around 4.5 million individuals who may have overpaid in total some £1.6 billion of tax and a further 1.5 million individuals who may have underpaid in total some £400 million of tax.
[32]
HMRC guidance notes that flexible arrangements can be made, where necessary, to assist individuals and businesses who have unpaid tax debts. Such "Time to Pay arrangements", for example an agreed monthly payment schedule, are based on the debtor's specific financial circumstances and the guidance notes that no "standard" Time to Pay arrangement exists. Interest is payable on a Time to Pay arrangement.
[33]
In 2007?08 HMRC overpaid tax credits to the value of £1 billion; at the end of March 2009, HMRC had £4.4 billion of overpayments to be recovered.
[34]
Controversies
[
edit
]
Child benefit records misplacement
[
edit
]
On 20 November 2007, the
Chancellor of the Exchequer
,
Alistair Darling
, announced that two
discs
that held the personal details of all families in the United Kingdom claiming
child benefit
had gone missing.
[35]
This is thought to affect approximately 25 million individuals and 7.5 million families in the UK. The missing discs include personal details such as name, date of birth,
National Insurance
number, and bank details.
The then chancellor stated that there was no indication that the details had fallen into criminal hands; however, he urged people to monitor their bank accounts.
[35]
IT problems
[
edit
]
EDS
ran the Inland Revenue's tax and National Insurance system
from 1994 to 2004.
[36]
In 2003, the launch of a new tax credit system led to over-payments of £2 billion to over two million people. EDS later paid £71.25 million in compensation for the disaster.
[37]
In 2004, the contract was awarded to
Capgemini
.
[38]
This contract, also with
Fujitsu
and
BT
, was one of the biggest ever IT outsourcing contracts, at a value of £2.6 billion.
[39]
In February 2010, HMRC encountered problems following the implementation of their taxes modernisation program called Modernising Pay-as-you-Earn Processes for Customers (MPPC). The IT system was launched in June 2009 and its first real test came in a period known as annual coding. Annual coding issues certain codes to tax payers on a yearly basis. The annual coding process sent out incorrect tax coding notices to some taxpayers and their employers meaning that they would pay too much tax the following year.
[40]
Underpayments to ethnic minority claimants
[
edit
]
In August 2010, seven HMRC staff were sacked for deliberately underpaying benefits to ethnic-minority claimants.
[41]
Dave Hartnett, permanent secretary for tax at HMRC, said the department operates a zero-tolerance policy on racial discrimination.
Goldman Sachs deal and surveillance of Osita Mba
[
edit
]
The
whistleblower
Osita Mba revealed to
The Guardian
that HMRC entered a deal with
Goldman Sachs
which allowed Goldman Sachs to escape paying £10 million interest on unpaid tax.
[
citation needed
]
Following this HMRC used powers under the
Regulation of Investigatory Powers Act
(RIPA) "to examine the belongings, emails, internet search records and phone calls of their own solicitor, Osita Mba, and the phone records of his then wife" to find if he had spoken to the investigations editor of
The Guardian
,
David Leigh
.
[42]
MPs
in the House of Commons public accounts committee praised Osita Mba and called for scrutiny into HMRC's use of RIPA powers in a report. The report said: "We are deeply disappointed by HMRC's handling of whistleblowers. We consider that HMRC's use of powers reserved for tackling serious criminals against Mr Osita Mba was indefensible. HMRC told us that it had changed how it deals with whistleblowers and that it now provides information to its audit and risk committee who can use this to challenge how HMRC handles whistleblowers."
[43]
Call waiting times
[
edit
]
In September 2015, a report from
Citizens Advice
highlighted frustration amongst callers to HMRC over long holding times. The report claimed that "thousands" of callers were waiting on average 47 minutes to have their call answered, often at considerable expense to the caller.
[44]
HMRC alleged that the "unscientific and out-of-date survey of tweets" did "not represent the real picture" but said that 3000 extra staff had been taken on to respond to calls. A June 2015 report from the
National Audit Office
indicated that the total number of calls answered by HMRC fell from 79% in 2013?14, to 72.5% in 2014?15, however a subsequent report in May 2016 suggested that performance improved following the recruitment drive.
[45]
Revenue and Customs Digital Technology Services
[
edit
]
Revenue and Customs Digital Technology Services (RCDTS) is a subsidiary of HMRC established in 2015 to provide technical and digital services. The company works exclusively for HMRC and its employees are not
civil servants
.
[46]
On 17 January 2022, HMRC announced its intention to wind up the company.
[47]
See also
[
edit
]
References
[
edit
]
- ^
Workforce Management Information - HM Revenue & Customs
,
archived
from the original on 18 March 2024
, retrieved
18 March
2024
- ^
HMRC Annual Report and Accounts 2018?2019
, HM Revenue and Customs, 18 July 2019,
archived
from the original on 12 January 2023
, retrieved
8 May
2020
- ^
"The Rt Hon Victoria Atkins MP"
.
- ^
Kelly, Liam (11 September 2022).
"From cash to customs: how our national symbols will change under King Charles"
.
The Times
. London.
Archived
from the original on 12 January 2023
. Retrieved
12 September
2022
.
- ^
"Her Majesty's Revenue and Customs"
.
Commissioners for Revenue and Customs Act 2005
. legislation.gov.uk.
Archived
from the original on 23 December 2012
. Retrieved
5 August
2012
.
- ^
"HM Revenue and Customs: About Us"
. Hmrc.gov.uk. 18 April 2005.
Archived
from the original on 29 June 2009
. Retrieved
21 June
2009
.
- ^
BERR Summary: ONS ? UK Company Statistics Reconciliation Project
(PDF)
. Department for Business, Enterprise and Regulatory Reform. January 2009. Archived from
the original
(PDF)
on 26 February 2012.
- ^
"Introduction to the Money Laundering Regulations"
. HMRC.
Archived
from the original on 30 January 2012
. Retrieved
29 January
2012
.
- ^
"HM Revenue & Customs uktradeinfo ? Home"
. Uktradeinfo.com. Archived from
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on 10 February 2012
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2012
.
- ^
"HMRC's criminal investigation powers and safeguards"
.
Gov.uk
.
Archived
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. Retrieved
20 July
2021
.
- ^
"Section 138, Customs and Excise Management Act 1979 (c. 2)"
. Legislation.gov.uk.
Archived
from the original on 12 January 2023
. Retrieved
20 July
2021
.
- ^
Criminal taxes hit squad aims to give fraudsters the Al Capone treatment.
The Guardian
. Philip Inman. 30 June 2006.
- ^
Revenue Chief who oversaw tax credit debacle steps down.
The Guardian
. Larry Elliot. 20 July 2006.
- ^
The joys of crossing a terrier with a retriever
Archived
12 May 2006 at the
Wayback Machine
(
Financial Times
, 9 July 2004, subscription required)
- ^
"HM Revenue & Customs:Transforming HMRC ? The Regional Review Programme"
. Hmrc.gov.uk. Archived from
the original
on 3 July 2009
. Retrieved
21 June
2009
.
- ^
"HM Revenue & Customs announces consultation programme on the way forward"
.
gnn.gov.uk
. 16 November 2006. Archived from
the original
on 28 July 2007.
- ^
Seager, Ashley (17 November 2006).
"Union fury over tax office cuts"
.
The Guardian
. London.
Archived
from the original on 24 November 2007
. Retrieved
21 June
2009
.
- ^
Reed, Kevin (16 November 2006).
"HMRC senior staff concerned over further job cuts"
. Accountancy Age.
Archived
from the original on 24 November 2007
. Retrieved
21 June
2009
.
- ^
"Morale among HMRC workers falls to new low"
.
Accountancy Age
. 9 July 2009.
Archived
from the original on 10 July 2009
. Retrieved
9 July
2009
.
- ^
"Tax system overhaul as real-time operation is tested"
.
BBC News
. 11 April 2012.
Archived
from the original on 15 June 2020
. Retrieved
31 March
2013
.
- ^
Power, Rachael (2 January 2015).
"Revenue Scotland ready to replace HMRC for devolved taxes"
.
Archived
from the original on 25 January 2016
. Retrieved
20 September
2016
.
- ^
"HMRC reveals tax office shake-up"
.
BBC News
. 12 November 2015.
Archived
from the original on 29 December 2019
. Retrieved
12 November
2015
.
- ^
"List of proposed HMRC office closures"
.
BBC News
. 12 November 2015.
Archived
from the original on 18 July 2020
. Retrieved
13 November
2015
.
- ^
"HMRC chief executive to quit post"
. BBC News. 11 January 2016.
Archived
from the original on 27 August 2020
. Retrieved
25 February
2016
.
- ^
O'Carroll, Lisa (18 July 2019).
"Revenue chief who received death threats over Brexit steps down"
.
The Guardian
.
ISSN
0261-3077
.
Archived
from the original on 6 July 2020
. Retrieved
3 February
2020
.
- ^
"Jim Harra confirmed as new HMRC chief executive"
.
Tax Journal
.
Archived
from the original on 12 January 2023
. Retrieved
3 February
2020
.
- ^
"Troup, Edward - permanent secretary, HM Revenue and Customs ? ACOBA recommendation"
.
GOV.UK
. 21 February 2019.
Archived
from the original on 22 September 2019
. Retrieved
22 September
2019
.
- ^
"Our governance"
.
GOV.UK
.
Archived
from the original on 6 July 2020
. Retrieved
3 February
2020
.
- ^
"Explanatory note on HMRC salaries and organisation charts"
(PDF)
.
Government of the United Kingdom
. Archived from
the original
(PDF)
on 16 October 2013
. Retrieved
1 February
2017
.
- ^
"Powers and safeguards"
. HM Revenue & Customs. Archived from
the original
on 14 June 2020
. Retrieved
1 February
2017
.
- ^
a
b
c
"Measuring tax gaps 2020 edition"
(PDF)
.
- ^
"HM Revenue and Customs 2008?09 Accounts: The Comptroller and Auditor General's Standard Report ? National Audit Office (NAO)"
.
National Audit Office
. Archived from
the original
on 7 June 2011
. Retrieved
1 August
2009
.
- ^
This article incorporates text published under the British
Open Government Licence
: HMRC,
How to pay a debt to HMRC with a Time to Pay arrangement
, updated 4 November 2021, accessed 31 December 2022
- ^
"HM Revenue and Customs 2008?09 Accounts: The Comptroller and Auditor General's Standard Report"
. Nao.org.uk. 20 July 2009. Archived from
the original
on 27 September 2011
. Retrieved
27 February
2012
.
- ^
a
b
"Darling admits 25m records lost"
.
BBC News
. 20 November 2007.
Archived
from the original on 5 September 2017
. Retrieved
20 November
2007
.
- ^
"Inland Revenue dumps IT provider"
.
BBC News
. 11 December 2003.
Archived
from the original on 10 August 2017
. Retrieved
4 May
2010
.
- ^
"EDS pays for tax failure"
.
theregister.co.uk
.
Archived
from the original on 10 August 2017
. Retrieved
10 August
2017
.
- ^
Rebecca Thomas.
"Taxation | Solutions"
.
Uk.capgemini.com
. Archived from
the original
on 20 November 2010
. Retrieved
27 February
2012
.
- ^
"HMRC renews Aspire deal to save £110m"
.
Computerweekly.com
. 30 October 2009.
Archived
from the original on 13 June 2011
. Retrieved
27 February
2012
.
- ^
"HMRC benefits as new PAYE system issues wrong tax codes"
.
Computerweekly.com
.
Archived
from the original on 4 March 2016
. Retrieved
9 November
2015
.
- ^
"HMRC staff sacked over race abuse"
.
BBC News
. 18 August 2010.
Archived
from the original on 15 June 2020
. Retrieved
18 August
2010
.
- ^
Rajeev Syal.
"HMRC's use of powers against whistleblower 'indefensible', say MPs"
.
The Guardian
.
Archived
from the original on 15 June 2020
. Retrieved
14 December
2016
.
- ^
"Effectiveness of tax reliefs, improving tax collection: reports published"
.
UK Parliament
.
Archived
from the original on 28 October 2016
. Retrieved
28 March
2015
.
- ^
"HMRC defends call waiting times of 47 minutes"
.
BBC News
. 9 September 2015.
Archived
from the original on 20 June 2020
. Retrieved
20 June
2018
.
- ^
"The quality of service for personal taxpayers"
(PDF)
.
National Audit Office
.
Archived
(PDF)
from the original on 14 July 2020
. Retrieved
26 August
2017
.
- ^
HMRC,
Revenue and Customs Digital Technology Services: gender pay gap report and data 2021
Archived
31 January 2022 at the
Wayback Machine
, published 27 January 2022, accessed 31 January 2022
- ^
Public and Commercial Services Union
,
https://www.pcs.org.uk/news-events/news/hmrc-announces-rcdts-close
Archived
12 January 2023 at the
Wayback Machine
HMRC announces RCDTS to close], published 17 January 2022, accessed 31 January 2022
External links
[
edit
]
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