Revenue and Customs
   HOME

TheInfoList



OR:

His Majesty's Revenue and Customs (commonly HM Revenue and Customs, or HMRC, and formerly Her Majesty's Revenue and Customs) is a department of the
UK government His Majesty's Government, abbreviated to HM Government or otherwise UK Government, is the central government, central executive authority of the United Kingdom of Great Britain and Northern Ireland.
responsible for the collection of
taxes A tax is a mandatory financial charge or levy imposed on an individual or legal entity by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities. Tax co ...
, the payment of some forms of state support, the administration of other regulatory
regimes In politics, a regime (also spelled régime) is a system of government that determines access to public office, and the extent of power held by officials. The two broad categories of regimes are democratic and autocratic. A key similarity across ...
including the national minimum wage and the issuance of
national insurance National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their famil ...
numbers. HMRC was formed by the merger of the
Inland Revenue The Inland Revenue was, until April 2005, a department of the British Government responsible for the collection of direct taxation, including income tax, national insurance contributions, capital gains tax, inheritance tax, corporation ta ...
and
HM Customs and Excise HM Customs and Excise (properly known as Her Majesty's Customs and Excise at the time of its dissolution) was a department of the British Government formed in 1909 by the merger of HM Customs and HM Excise; its primary responsibility was the ...
, which took effect on 18 April 2005. The department's logo is the
Tudor Crown The Tudor Crown was a crown created in the early 16th century for either Henry VII of England, Henry VII or Henry VIII, the first House of Tudor, Tudor monarchs of Kingdom of England, England, and destroyed in 1649 during the English Civil War. ...
enclosed within a circle.


Departmental responsibilities

The department is responsible for the administration and collection of
direct tax Although the actual definitions vary between jurisdictions, in general, a direct tax is a tax imposed upon a person or property as distinct from a tax imposed upon a transaction, which is described as an indirect tax. There is a distinction betwee ...
es including
Income Tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...
,
Corporation Tax A corporate tax, also called corporation tax or company tax or corporate income tax, is a type of direct tax levied on the income or capital of corporations and other similar legal entities. The tax is usually imposed at the national level, but i ...
,
Capital Gains Tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. In South Africa, capital g ...
(CGT) and
Inheritance Tax International tax law distinguishes between an estate tax and an inheritance tax. An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and pro ...
(IHT),
indirect tax An indirect tax (such as a sales tax, per unit tax, value-added tax (VAT), excise tax, consumption tax, or tariff) is a tax that is levied upon goods and services before they reach the customer who ultimately pays the indirect tax as a part of ...
es including
Value Added Tax A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared wi ...
(VAT),
excise duties file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...
and
Stamp Duty Land Tax Stamp duty in the United Kingdom is a form of tax charged on legal instruments (written documents), and historically required a physical stamp to be attached to or impressed upon the document in question. The more modern versions of the tax no ...
(SDLT), and environmental taxes such as
Air Passenger Duty Air Passenger Duty (APD) is an excise duty which is charged on the carriage of passengers flying from a United Kingdom or Isle of Man airport on an aircraft that has an authorised take-off weight of more than 5.7 tonnes or more than twenty seat ...
and the
Climate Change Levy The Climate Change Levy (CCL) is a tax on energy delivered to non-domestic users in the United Kingdom. Scope and purpose Introduced on 1 April 2001 under the Finance Act 2000, it was forecast to cut annual emissions by 2.5 million tonnes ...
. Other aspects of the department's responsibilities include
National Insurance National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their famil ...
Contributions (NIC), the distribution of
Child Benefit Child benefit or children's allowance is a social security payment which is distributed to the parents or guardians of children, teenagers and in some cases, young adult (psychology), young adults. Countries operate different versions of the benefi ...
and some other forms of state support including the Child Trust Fund, payments of
Tax Credits A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or a form of state "disc ...
, enforcement of the National
Minimum Wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. List of countries by minimum wage, Most countries had introduced minimum wage legislation b ...
, administering anti-
money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...
registrations for Money Service Businesses and collection and publication of the trade-in-goods statistics. Responsibility for the protection of the UK's borders passed to the
UK Border Agency The UK Border Agency (UKBA) was the border control agency of the Government of the United Kingdom and part of the Home Office that was superseded by UK Visas and Immigration, Border Force and Immigration Enforcement in April 2013. It was forme ...
within the
Home Office The Home Office (HO), also known (especially in official papers and when referred to in Parliament) as the Home Department, is the United Kingdom's interior ministry. It is responsible for public safety and policing, border security, immigr ...
on 1 April 2008 and then to UK Border Force and the
National Crime Agency The National Crime Agency (NCA) is a Law enforcement agency#natlea, national law enforcement agency in the United Kingdom. It is the UK's lead agency against organised crime; Human trafficking, human, Arms trafficking, weapon and Illegal drug t ...
in 2013; however, HMRC officers are also regularly deployed at the border to assist on operations. HMRC is also a law enforcement agency, responsible for investigating and tackling tax fraud, excise (tobacco & alcohol) fraud, smuggling, money laundering and a number of other types of offences against the Treasury. The criminal investigation department is at the head of its Customer Compliance Group, known as Fraud Investigation Service (FIS).


Powers of officers

HMRC has a strong cadre of criminal investigators responsible for investigating Serious Organised Fiscal Crime. This includes all of the previous Customs 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. Fraud Investigation Service 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's criminal investigation department is Fraud Investigation Service (FIS). Officers deployed in their criminal investigation teams have the same powers as police officers, and 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. They also have extensive surveillance powers that authorised criminal investigation officers are trained to utilise. The main power, unde
section 138
of the Customs and Excise Management Act 1979 (as amended b
section 114
of the
Police and Criminal Evidence Act 1984 The Police and Criminal Evidence Act 1984 (c. 60) (PACE) is an act of Parliament which instituted a legislative framework for the powers of police officers in England and Wales to combat crime, and provided codes of practice for the exercise of t ...
) 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 as well as related fraud offences. On 30 June 2006, under the authority of the new Labour
home secretary The secretary of state for the Home Department, more commonly known as the home secretary, is a senior minister of the Crown in the Government of the United Kingdom and the head of the Home Office. The position is a Great Office of State, maki ...
, 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 The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administerin ...
caught out
Al Capone Alphonse Gabriel Capone ( ; ; January 17, 1899 – January 25, 1947), sometimes known by the nickname "Scarface", was an American organized crime, gangster and businessman who attained notoriety during the Prohibition era as the co-foun ...
on
tax evasion Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to red ...
. 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. On 19 July 2006, the executive chairman of HMRC, Sir David Varney resigned. 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 The police are Law enforcement organization, a constituted body of Law enforcement officer, people empowered by a State (polity), state with the aim of Law enforcement, enforcing the law and protecting the Public order policing, public order ...
or the
Crown Prosecution Service The Crown Prosecution Service (CPS) is the principal public agency for conducting criminal prosecutions in England and Wales. It is headed by the Director of Public Prosecutions. The main responsibilities of the CPS are to provide legal adv ...
.


History

The merger of the Inland Revenue and HM Customs & Excise was announced by then
chancellor of the Exchequer The chancellor of the exchequer, often abbreviated to chancellor, is a senior minister of the Crown within the Government of the United Kingdom, and the head of HM Treasury, His Majesty's Treasury. As one of the four Great Offices of State, t ...
Gordon Brown James Gordon Brown (born 20 February 1951) is a British politician who served as Prime Minister of the United Kingdom and Leader of the Labour Party (UK), Leader of the Labour Party from 2007 to 2010. Previously, he was Chancellor of the Ex ...
in the
budget A budget is a calculation plan, usually but not always financial plan, financial, for a defined accounting period, period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including tim ...
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 Somerset House is a large neoclassical architecture, neoclassical building complex situated on the south side of the Strand, London, Strand in central London, overlooking the River Thames, just east of Waterloo Bridge. The Georgian era quadran ...
and New Kings Beam House into HMRC's new headquarters building at 100 Parliament Street in
Whitehall Whitehall is a road and area in the City of Westminster, Central London, England. The road forms the first part of the A roads in Zone 3 of the Great Britain numbering scheme, A3212 road from Trafalgar Square to Chelsea, London, Chelsea. It ...
on 21 November 2004. The planned new department was announced formally in the
Queen's Speech A speech from the throne, or throne speech, is an event in certain monarchies in which the reigning sovereign, or their representative, reads a prepared speech to members of the nation's legislature when a session is opened. The address sets fo ...
of 2004 and a bill, the Commissioners for Revenue and Customs Bill, was introduced into the
House of Commons The House of Commons is the name for the elected lower house of the Bicameralism, bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of ...
on 24 September 2004, and received
royal assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in othe ...
as the
Commissioners for Revenue and Customs Act 2005 The Commissioners for Revenue and Customs Act 2005 (c 11) is an Act of the Parliament of the United Kingdom which combined the Inland Revenue and HM Customs and Excise into a single government department, HM Revenue and Customs. The Act also ...
on 7 April 2005. The Act also creates a Revenue and Customs Prosecutions Office (RCPO) responsible for the
prosecution A prosecutor is a legal representative of the prosecution in states with either the adversarial system, which is adopted in common law, or inquisitorial system, which is adopted in Civil law (legal system), civil law. The prosecution is the ...
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 The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and also published digitally that focuses on business and economic Current affairs (news format), current affairs. Based in London, the paper is owned by a Jap ...
'' on 9 July 2004, as "mating the C&E terrier with the IR retriever". 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 An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...
,
stamp duty Stamp duty is a tax that is levied on single property purchases or documents (including, historically, the majority of legal documents such as cheques, receipts, military commissions, marriage licences and land transactions). Historically, a ...
and
tax credits A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit they have accrued from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or a form of state "disc ...
) and existing Customs powers in relation to matters within the remit of the old Customs & Excise (such as
value added tax A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared wi ...
and
excise duties file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...
). 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 A spending review, or occasionally a comprehensive spending review, is a governmental process in the United Kingdom carried out by HM Treasury to set firm expenditure limits and, through public service agreements, define the key improvements that ...
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 A treasury is either *A government department related to finance and taxation, a finance ministry; in a business context, corporate treasury. *A place or location where treasure, such as currency or precious items are kept. These can be ...
, 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 The Serious Organised Crime Agency (SOCA) was a non-departmental public body of the Government of the United Kingdom which existed from 1 April 2006 until 7 October 2013. SOCA was a national law enforcement agency with Home Office sponsorship, e ...
, 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. 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. In May 2009, staff morale in HMRC was the lowest of 11 government departments surveyed. In 2013, HMRC began to introduce an update to the
PAYE A pay-as-you-earn tax (PAYE), or pay-as-you-go (PAYG) is a withholding of taxes on income payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined ...
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. In 2012, Revenue Scotland was formed and on 1 April 2015 it took HMRC responsibility to collect devolved taxes in Scotland. 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.


Governance structure

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 James Murray


Chairman

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. * Sir David Varney April 2005 – August 2006 * Paul Gray (acting) September 2006 – February 2007 and (confirmed) February 2007 – November 2007 * Dave Hartnett CB (acting) 2007 – 31 July 2008 * Mike Clasper CBE 1 August 2008 – 1 August 2012


Chief Executive

The chief executive is also the first
permanent secretary A permanent secretary is the most senior Civil Service (United Kingdom), civil servant of a department or Ministry (government department), ministry charged with running the department or ministry's day-to-day activities. Permanent secretaries are ...
for HMRC and the accounting officer. * Dame Lesley Strathie 2008–2011 * Dame Lin Homer 2012–2016 * Sir Jon Thompson 2016–2019 * Sir Jim Harra 2019–present Executive chair and permanent secretary * Sir Edward Troup April 2016 – January 2018


Non-executive board members

Non-executive board members as of November 2019: * Mervyn Walker (lead non-executive director) *Michael Hearty *Simon Ricketts *Alice Maynard *Juliette Scott *Paul Morton *Patricia Gallan


Personnel

*
Permanent secretary A permanent secretary is the most senior Civil Service (United Kingdom), civil servant of a department or Ministry (government department), ministry charged with running the department or ministry's day-to-day activities. Permanent secretaries are ...
*
Director general A director general, general director or director-general (plural: ''directors general'', ''general directors'', ''directors-general'', ''director generals'' or ''director-generals'') is a senior executive officer, often the chief executive officer ...
* Director * Deputy director * Grade 6 * Grade 7 * Senior officer * Higher officer * Officer * Assistant officer * Administrative assistant Source: See civil service grading schemes for details. HMRC's Criminal Investigators and Mobile Enforcement Officers deployed within Fraud Investigation Service are uniformed officers. HMRC Officers have the same powers as police officers, but their equivalent police ranks are at a higher grade (see table below):


Performance

HMRC collected £660 billion for the
Treasury A treasury is either *A government department related to finance and taxation, a finance ministry; in a business context, corporate treasury. *A place or location where treasure, such as currency or precious items are kept. These can be ...
in 2018/19. 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 evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to red ...
,
tax avoidance Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable. A tax shelter is one type of tax avoidance, and tax havens are jurisdictions that facilitate reduced taxe ...
, error and unpaid tax debts. This equates to a collection rate of 95.3% (up from 92.7% in 2005-6). 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. 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. 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.


Controversies


Child benefit records misplacement

On 20 November 2007, the
Chancellor of the Exchequer The chancellor of the exchequer, often abbreviated to chancellor, is a senior minister of the Crown within the Government of the United Kingdom, and the head of HM Treasury, His Majesty's Treasury. As one of the four Great Offices of State, t ...
,
Alistair Darling Alistair Maclean Darling, Baron Darling of Roulanish, (28 November 1953 – 30 November 2023) was a British politician who served as Chancellor of the Exchequer under prime minister Gordon Brown from 2007 to 2010. A member of the Labour Party ...
, announced that two discs that held the personal details of all families in the United Kingdom claiming
child benefit Child benefit or children's allowance is a social security payment which is distributed to the parents or guardians of children, teenagers and in some cases, young adult (psychology), young adults. Countries operate different versions of the benefi ...
had gone missing. 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 National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their famil ...
number, and bank details. Darling stated that there was no indication that the details had fallen into criminal hands; however, he urged people to monitor their bank accounts.


IT problems

EDS ran the Inland Revenue's tax and National Insurance system from 1994 to 2004. 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. In 2004, the contract was awarded to
Capgemini Capgemini SE is a French Multinational corporation, multinational information technology (IT) services and consulting company, headquartered in Paris, France. History Capgemini was founded by Serge Kampf in 1967 as an enterprise management and d ...
. This contract, also with Fujitsu and BT, was one of the biggest ever IT outsourcing contracts, at a value of £2.6 billion. 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.


Underpayments to ethnic minority claimants

In August 2010, seven HMRC staff were sacked for deliberately underpaying benefits to ethnic-minority claimants. 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

The
whistleblower Whistleblowing (also whistle-blowing or whistle blowing) is the activity of a person, often an employee, revealing information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe, unethical or ...
Osita Mba revealed to ''The Guardian'' that HMRC entered a deal with
Goldman Sachs The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...
which allowed Goldman Sachs to escape paying £10 million interest on unpaid tax. 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. 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."


Call waiting times

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. 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.


European Commission on UK tax exemption

In November 2024, HM Revenue and Customs began refunding several major British companies, including firms listed on the
London Stock Exchange The London Stock Exchange (LSE) is a stock exchange based in London, England. the total market value of all companies trading on the LSE stood at US$3.42 trillion. Its current premises are situated in Paternoster Square close to St Paul's Cath ...
and ITV, following a landmark ruling by the
European Court of Justice The European Court of Justice (ECJ), officially the Court of Justice (), is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Union, it is tasked with interpreting ...
(ECJ). This decision reversed a previous
European Commission The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...
ruling from 2019 that classified a UK tax exemption as illegal state aid, requiring HMRC to collect additional taxes. The tax exemption, applicable from 2013 to 2018, was designed to support British-based multinationals by exempting certain overseas financing activities from controlled foreign company (CFC) rules. These rules generally prevent companies from reducing tax liabilities by shifting profits to foreign subsidiaries. The exemption, initially introduced by former UK Chancellor George Osborne, aimed to make the UK a more attractive headquarters for large international corporations. The European Commission initially contended that this exemption provided undue benefits to British companies, constituting illegal state aid, and required the UK to collect back taxes. However, the final appeal in 2024 sided with the UK, allowing HMRC to refund the affected companies and marking a significant moment in the legal landscape for UK tax and state aid policy.


Revenue and Customs Digital Technology Services

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 servant The civil service is a collective term for a sector of government composed mainly of career civil service personnel hired rather than elected, whose institutional tenure typically survives transitions of political leadership. A civil service offic ...
s. On 17 January 2022, HMRC announced its intention to wind up the company.


Recent investments

HMRC has made a substantial investment of nearly £300 million to enhance its compliance and fraud investigation efforts. This funding has led to an increase in staffing within the Customer Compliance Group (CCG) and the Fraud Investigation Service (FIS). The CCG, responsible for enforcing tax compliance and addressing issues such as tax evasion, saw its workforce grow from 25,656 full-time equivalent staff (FTE) in November 2021 to a peak of 28,617 in October 2022, before stabilizing at 26,841 in October 2023. The FIS, which conducts both civil and criminal investigations into serious fraud cases, also experienced growth, increasing from 4,244 FTE in November 2021 to 4,956 by October 2022, although it slightly decreased to 4,735 by October 2023. The financial commitment to the FIS is reflected in rising pay costs, which increased from £267.1 million in the 2021-2022 fiscal year to £288.8 million in 2022-2023, with an estimated expenditure of £286.2 million projected for 2023-2024. This investment underscores HMRC's ongoing dedication to protecting public revenue and ensuring tax compliance across the UK. Yves Laffont, Sector Lead for Financial Crime Consulting Services at FDM Group, noted that HMRC's efforts serve as a model for businesses looking to strengthen their own fraud prevention teams. He emphasized the growing sophistication of fraudulent activities, including the use of artificial intelligence in scams. Laffont highlighted that fraud accounts for over 40% of recorded crimes in England but receives only 2% of police resources, which disproportionately affects vulnerable populations. He further pointed out that tier 2 financial institutions are becoming prime targets for sophisticated criminal enterprises, posing risks to their customers. To combat these challenges effectively, Laffont advocates for rapid skill acquisition and holistic team development within organizations. He stresses the importance of establishing a risk management mindset and fostering adaptability to change as key components of successful fraud prevention strategies.


HMRC and fraud

HMRC reports a significant increase in charity tax fraud cases across civil and criminal courts. The organisation is actively working to improve systems that prevent fraudulent access to charitable tax reliefs, recognising growing vulnerabilities in the
nonprofit A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...
sector. The rise in court cases highlights systemic challenges facing charitable organisations, particularly around financial management and compliance. Common issues include outdated financial records, incorrect documentation of authorised officials, and improper gift aid claim submissions. These administrative failures often lead to rejected tax returns and potential legal scrutiny. Despite these challenges, the charity sector remains predominantly compliant. HMRC is taking proactive steps to support organisations by developing more interactive guidance, utilising
social media Social media are interactive technologies that facilitate the Content creation, creation, information exchange, sharing and news aggregator, aggregation of Content (media), content (such as ideas, interests, and other forms of expression) amongs ...
platforms, and creating clearer communication channels to help charities understand complex tax regulations. Trustees of charitable organizations are strongly advised to seek professional financial guidance, especially when dealing with complex monetary matters. The increased legal actions serve as a warning to maintain rigorous financial controls and ensure accurate record-keeping. The broader context suggests that while
tax fraud Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trust (property), trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax au ...
in charities is a growing concern, HMRC's approach is focused on education and prevention rather than purely punitive measures. The goal is to strengthen the integrity of the charitable sector and protect legitimate nonprofit activities from potential financial misconduct.


See also

* HM Revenue and Customs Museum *
Government Offices Great George Street Government Offices Great George Street (GOGGS) is a large UK government office building in the Westminster district of London, England. It is situated between Horse Guards Road, King Charles Street, Whitehall, Parliament Street and Great George ...
* Revenue Scotland * Tŷ William Morgan - William Morgan House * Welsh Revenue Authority


References


External links

*
Commissioners for Revenue and Customs Act 2005Treasury Press Release
(25 November 2004) {{DEFAULTSORT:Hm Revenue And Customs Customs services Government agencies established in 2005 National law enforcement agencies of the United Kingdom Non-ministerial departments of the Government of the United Kingdom Taxation in the United Kingdom 2005 establishments in the United Kingdom Revenue services