United Kingdom HM Revenue and Customs

United Kingdom HM Revenue and Customs
Agency name	HM Revenue and Customs
Formed	2005
Preceding1	Inland Revenue
Preceding2	HM Customs and Excise
Jurisdiction	United Kingdom
Headquarters	London
Minister1 name	Chancellor of the Exchequer
Chief1 name	Permanent Secretary
Parent agency	HM Treasury

United Kingdom HM Revenue and Customs is the United Kingdom executive agency responsible for the administration and collection of taxation, payment of certain forms of state support, and the regulation of customs controls. It was created by merger in 2005 and operates at the intersection of fiscal policy, public administration, and international tax cooperation. HM Revenue and Customs interacts with a wide network of UK and international institutions to implement laws enacted by the Parliament of the United Kingdom and directives from the Chancellor of the Exchequer and HM Treasury.

History

HM Revenue and Customs was formed in 2005 by combining the Inland Revenue and HM Customs and Excise, following recommendations linked to public administration reforms under successive Prime Ministers and the Treasury. Its predecessors traced roots to historic institutions such as the Board of Inland Revenue and customs arrangements from the era of the Hundred Years' War. Throughout the 20th century, entities like the Board of Customs and the Excise adapted to wartime finance needs during the First World War and the Second World War, influenced by fiscal policies of David Lloyd George and wartime cabinets. Postwar developments, including legislation from the Parliament of the United Kingdom and modernization programs under cabinets led by Margaret Thatcher and Tony Blair, shaped the merger that produced the current agency, reflecting shifts in tax policy, welfare administration, and border regulation.

Organisation and Governance

HM Revenue and Customs is an executive agency sponsored by HM Treasury and accountable to the Parliament of the United Kingdom through the Chancellor of the Exchequer. Operational leadership comprises a Permanent Secretary and a Chief Executive who coordinate directorates responsible for areas including personal taxation, corporate tax, customs, and benefits. Governance mechanisms include oversight from select committees such as the Treasury Select Committee, internal audit structures aligned with the National Audit Office, and statutory frameworks codified by Acts of Parliament of the United Kingdom. The agency maintains regional and local offices across the United Kingdom, liaising with devolved administrations like the Scottish Government, Welsh Government, and Northern Ireland Executive on administratively relevant matters.

Responsibilities and Functions

HM Revenue and Customs administers major UK taxes enacted by the Parliament of the United Kingdom including Income Tax, Value Added Tax, Corporation Tax, Capital Gains Tax, and Inheritance Tax. It also implements customs controls at borders interacting with international agreements such as those under the World Trade Organization and cooperating with agencies including Europol and Interpol on cross-border customs issues. The agency operates statutory payments such as Child Benefit and enforces compliance with reliefs and credits created in legislation passed by the House of Commons and the House of Lords. It provides guidance and rulings that affect taxpayers, businesses, and institutions like the Bank of England and financial intermediaries.

Revenue Collection and Tax Administration

HM Revenue and Customs collects revenues critical to funding public services set in spending plans approved by Parliament of the United Kingdom and the Chancellor of the Exchequer. It administers self-assessment processes for individuals and PAYE procedures for employers, working with payroll providers, accounting firms, and trade bodies that include the Institute of Chartered Accountants in England and Wales and the Association of Chartered Certified Accountants. The agency issues tax codes, processes returns, and manages refund mechanisms; operations are shaped by legislation such as the Finance Act series and court decisions from tribunals including the Upper Tribunal (Tax and Chancery Chamber). Internationally, HM Revenue and Customs negotiates double taxation treaties with jurisdictions like the United States, Germany, and France.

Compliance, Investigations and Enforcement

HM Revenue and Customs conducts compliance activities ranging from routine audits to criminal investigations into tax evasion and smuggling. It operates specialist units that coordinate with law enforcement partners such as the Serious Fraud Office, National Crime Agency, Metropolitan Police Service, and international counterparts like the Internal Revenue Service and Agence nationale de la sécurité des systèmes d'information for cyber aspects. Enforcement tools include civil penalties, prosecutions under statutes enacted by the Parliament of the United Kingdom, and forfeiture actions tied to customs infringements. High-profile investigations have intersected with cases involving multinational corporations, high-net-worth individuals, and complex tax avoidance schemes litigated in courts including the Supreme Court of the United Kingdom.

Information Technology and Digital Services

HM Revenue and Customs has implemented extensive digital services such as online self-assessment, the Making Tax Digital program, and electronic customs declarations, collaborating with technology providers and standards set by bodies like the Cabinet Office and the National Cyber Security Centre. IT modernization programs have involved large contracts, cloud migration initiatives, and efforts to secure systems against threats flagged by agencies including the GCHQ and National Crime Agency. Digital transformation has affected service delivery to stakeholders including accounting firms, payroll firms, and multinational enterprises, and has been shaped by legislation on data protection including the Data Protection Act 2018 and rulings from the Information Commissioner's Office.

Criticisms, Controversies and Reforms

HM Revenue and Customs has faced scrutiny over issues such as IT project failures, data breaches, and taxpayer treatment, drawing criticism from parliamentary committees, the National Audit Office, and advocacy organizations including Citizens Advice. Controversies have prompted inquiries and reforms influenced by reports from the Public Accounts Committee and legal challenges in tribunals and higher courts. Reforms have included organizational restructuring, enhanced oversight by the Treasury Select Committee, investment in compliance capabilities, and policy changes implemented through successive Finance Acts and administrative guidance shaped by governments under leaders like Gordon Brown and Theresa May.

Category:Departmental agencies of the United Kingdom