Her Majesty's Revenue and Customs
Encyclopedia
Her Majesty's Revenue and Customs (HMRC) is a non-ministerial
department
of the UK Government responsible for the collection of tax
es and the payment of some forms of state support.
HMRC was formed by the merger of the Inland Revenue
and Her Majesty's Customs and Excise
which took effect on 18 April 2005. The department's logo is the St Edward's Crown enclosed within a circle.
es including income tax
and corporation tax
, capital taxes such as capital gains tax
and inheritance tax
, indirect tax
es (including value added tax
), excise duties and stamp duty land tax, and environmental taxes such as air passenger duty
and the climate change levy
. Other aspects of the department's responsibilities include National Insurance
contributions, 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
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
within the Home Office
on 1 April 2008.
HMRC has two overarching Public Service Agreement targets for the period 2008–2011:
HMRC inland detection officers have wide-ranging powers of arrest, entry, search and detention. The main power is to detain anyone who has committed, or who the officer has reasonable grounds to suspect has committed, any offence under the Customs and Excise Acts.
HMRC is also listed under parts of the British Government which contribute to intelligence collection, analysis and assessment. Their prosecution cases may be coordinated with the Police
, the Revenue and Customs Prosecution Office or the Crown Prosecution Service
.
The Board is composed of members of the Executive Committee and non-executive director
s. 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 Exchequer Secretary to the Treasury
, David Gauke
MP.
for HMRC and the Accounting Officer.
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". 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 Finance Act 2008 (Schedule 36). The new consolidated penalty regime was introduced via 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 suggest this may save around £300 million in staff costs, out of a total annual budget of £4 billion. There are indications that, after March 2008, a further 12,500 jobs may also be cut.
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. Whilst some of the offices closed will be in bigger cities where other offices already exist, many will be in local, rural areas, where there is no other HMRC presence. The numbers of job reductions and office closures has not been officially announced, but the proposals imply that up to 200 offices will close and a further 12,500 jobs will be lost from 2008 to 2011. In May 2009, staff morale
in HMRC was the lowest of 11 government departments surveyed.
in 2008/09. 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.
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.
announced that two discs
that held the personal details of all families in the United Kingdom
claiming child benefit
had gone missing. This is thought to affect approximately 25 million individuals and 7.5 million families in the UK. The missing discs include such personal details as:
The ex-chancellor, Alistair Darling
has stated that there is no indication that the details have fallen into criminal hands; however, he has urged people to monitor their bank accounts.
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
. This contract, also
with Fujitsu
and BT
, was one of the biggest ever IT outsourcing contracts, at a value of £2.6 billion.
Non-ministerial government department
A non-ministerial government department is a department or ministry of a government that is not headed by a Government Minister or Government Secretary, and answers directly to a legislature ....
department
Departments of the United Kingdom Government
Her Majesty's Government of the United Kingdom contains a number of Cabinet ministers who are usually called secretaries of state when they are in charge of Government departments called ministerial departments...
of the UK Government responsible for the collection of tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
es and the payment of some forms of state support.
HMRC was formed by the merger of the Inland Revenue
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 tax, petroleum revenue tax and stamp duty...
and Her Majesty's Customs and Excise
Her Majesty's Customs and Excise
HM Customs and Excise was, until April 2005, a department of the British Government in the UK. It was responsible for the collection of Value added tax , Customs Duties, Excise Duties, and other indirect taxes such as Air Passenger Duty, Climate Change Levy, Insurance Premium Tax, Landfill Tax and...
which took effect on 18 April 2005. The department's logo is the St Edward's Crown enclosed within a circle.
Departmental responsibilities
The department is responsible for the administration and collection of direct taxDirect tax
The term direct tax generally means a tax paid directly to the government by the persons on whom it is imposed.-General meaning:In the general sense, a direct tax is one paid directly to the government by the persons on whom it is imposed...
es including income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
and corporation tax
United Kingdom corporation tax
Corporation tax is a tax levied in the United Kingdom on the profits made by companies and on the profits of permanent establishments of non-UK resident companies and associations that trade in the EU. Prior to the tax's enactment on 1 April 1965, companies and individuals paid the same income tax,...
, capital taxes such as capital gains tax
Capital gains tax
A capital gains tax is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property...
and inheritance tax
Inheritance tax
An inheritance tax or estate tax is a levy paid by a person who inherits money or property or a tax on the estate of a person who has died...
, indirect tax
Indirect tax
The term indirect tax has more than one meaning.In the colloquial sense, an indirect tax is a tax collected by an intermediary from the person who bears the ultimate economic burden of the tax...
es (including value added tax
Value added tax
A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...
), excise duties and stamp duty land tax, and environmental taxes such as air passenger duty
Air Passenger Duty
Air Passenger Duty is an excise duty which is charged on the carriage of passengers flying from a United Kingdom airport on an aircraft that has an authorised take off weight of more than ten tonnes or more than twenty seats for passengers...
and the climate change levy
Climate Change Levy
The Climate Change Levy is a tax on energy delivered to non-domestic users in the United Kingdom. Its aim is to provide an incentive to increase energy efficiency and to reduce carbon emissions, however there have been ongoing calls to replace it with a proper carbon tax.-Scope and...
. Other aspects of the department's responsibilities include National Insurance
National Insurance
National Insurance in the United Kingdom was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits...
contributions, the distribution of child benefit
Child benefit
Child benefit is a social security payment disbursed to the parents or guardians of children. Child benefit is means-tested in some countries.-Australia:...
and some other forms of state support including the Child Trust Fund
Child Trust Fund
A Child Trust Fund is a long-term savings or investment account for children in the United Kingdom. New accounts cannot be created but existing accounts can receive new money...
, payments of Tax Credits, enforcement of the national minimum wage
Minimum wage
A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about...
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
UK Border Agency
The UK Border Agency is the border control body of the United Kingdom government and part of the Home Office. It was formed on 1 April 2008 by a merger of the Border and Immigration Agency , UKvisas and the Detection functions of HM Revenue and Customs...
within the Home Office
Home Office
The Home Office is the United Kingdom government department responsible for immigration control, security, and order. As such it is responsible for the police, UK Border Agency, and the Security Service . It is also in charge of government policy on security-related issues such as drugs,...
on 1 April 2008.
HMRC has two overarching Public Service Agreement targets for the period 2008–2011:
- Improve the extent to which individuals and businesses pay the tax due and receive the credits and payments to which they are entitled
- Improve customers' experiences of HMRC and improve the UK business environment
Powers of officers
HMRC is a law enforcement agency which has a strong cadre of Criminal Investigators (c. 2000) responsible for investigating Serious Organised Fiscal Crime. This includes all of the previous HMCE criminal work (other than drug trafficking) 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 inland detection officers have wide-ranging powers of arrest, entry, search and detention. The main power is to detain anyone who has committed, or who the officer has reasonable grounds to suspect has committed, any offence under the Customs and Excise Acts.
HMRC is also listed under parts of the British Government which contribute to intelligence collection, analysis and assessment. Their prosecution cases may be coordinated with the Police
Police
The police is a personification of the state designated to put in practice the enforced law, protect property and reduce civil disorder in civilian matters. Their powers include the legitimized use of force...
, the Revenue and Customs Prosecution Office or the Crown Prosecution Service
Crown Prosecution Service
The Crown Prosecution Service, or CPS, is a non-ministerial department of the Government of the United Kingdom responsible for public prosecutions of people charged with criminal offences in England and Wales. Its role is similar to that of the longer-established Crown Office in Scotland, and the...
.
Governance structure
Non-executive director
A non-executive director or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way...
s. 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
HM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
responsible for HMRC is the Exchequer Secretary to the Treasury
Exchequer Secretary to the Treasury
The Exchequer Secretary to the Treasury is a junior ministerial post in the British Treasury, ranked below the Chancellor of the Exchequer, the Chief Secretary to the Treasury, the Paymaster General and the Financial Secretary to the Treasury, and alongside the Economic Secretary to the Treasury....
, David Gauke
David Gauke
David Michael Gauke British Conservative Party politician. He is the Member of Parliament for South West Hertfordshire and current Exchequer Secretary to the Treasury.-Early life:...
MP.
Chief Executives of HMRC
The Chief Executive is also the Permanent SecretaryPermanent Secretary
The Permanent secretary, in most departments officially titled the permanent under-secretary of state , is the most senior civil servant of a British Government ministry, charged with running the department on a day-to-day basis...
for HMRC and the Accounting Officer.
- Dame Lesley StrathieLesley StrathieDame Lesley Ann Strathie, DCB is a British Civil Servant. She recently stepped down as Chief Executive of and Permanent Secretary to HM Revenue and Customs due to ill health.....
2008 – Present
Chairmen of HMRC
The Chairman of HMRC was an executive role until 2008. The Chairman is now a non-executive.- Sir David VarneyDavid VarneySir David Robert Varney was the chairman of HM Revenue and Customs from its establishment in April 2005 to the end of August 2006. David Varney was named as a recipient of a knighthood in the 2006 New Year's honours list...
2005–2007 - Paul GrayPaul Gray (civil servant)Paul Richard Charles Gray, CB was a British civil servant who was Chairman of HM Revenue & Customs until he resigned on 20 November 2007.- Early career :...
2007-2007 - Dave Hartnett CBDave HartnettDavid Anthony "Dave" Hartnett CB is a British civil servant who is currently serving as the Permanent Secretary for Tax at HM Revenue and Customs .-Career:...
(acting) 2007– 31 July 2008 - Mike Clasper 1 August 2008–Present
Non-executive board members
Non-executive board members as of September 2009 are:- Colin Cobain
- Mark HaysomMark HaysomMark Haysom CBE is a former British businessman, newspaper executive and Public Servant who spent six years as Chief Executive of the UK’s biggest quango. He is a Non-executive director of HMRC and the St Giles Trust....
CBE - Philippa Hird
- Phil Hodkinson
- John SpenceJohn Spence (HMRC)John Spence is involved in a wide range of charities and church organisations as well as a number of business focused organisations . John’s background is in the banking sector, where he was Director of businesses, retail distribution, and policy and risk at Lloyds TSB...
- Dame Sue StreetSue StreetDame Sue Street, DCB, was the Permanent Secretary for the Department for Culture, Media and Sport from 2001 to 2006. She was responsible for the overall strategy, delivery and expenditure for the whole department...
DCB
Merger
The merger of the Inland Revenue and HM Customs & Excise was announced by then Chancellor of the ExchequerChancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
Gordon Brown
Gordon Brown
James Gordon Brown is a British Labour Party politician who was the Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 until 2010. He previously served as Chancellor of the Exchequer in the Labour Government from 1997 to 2007...
in the Budget
Budget
A budget is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods...
on 17 March 2004. The name for the new department and its first executive chairman, David Varney
David Varney
Sir David Robert Varney was the chairman of HM Revenue and Customs from its establishment in April 2005 to the end of August 2006. David Varney was named as a recipient of a knighthood in the 2006 New Year's honours list...
, were announced on 9 May 2004. Varney joined the nascent department in September 2004, and staff started moving from Somerset House
Somerset House
Somerset House is a large building situated on the south side of the Strand in central London, England, overlooking the River Thames, just east of Waterloo Bridge. The central block of the Neoclassical building, the outstanding project of the architect Sir William Chambers, dates from 1776–96. It...
and New Kings Beam House into HMRC's new headquarters building at 100 Parliament Street in Whitehall
Whitehall
Whitehall is a road in Westminster, in London, England. It is the main artery running north from Parliament Square, towards Charing Cross at the southern end of Trafalgar Square...
on 21 November 2004.
The planned new department was announced formally in the Queen's Speech of 2004 and a bill
Bill (proposed law)
A bill is a proposed law under consideration by a legislature. A bill does not become law until it is passed by the legislature and, in most cases, approved by the executive. Once a bill has been enacted into law, it is called an act or a statute....
, the Commissioners for Revenue and Customs Bill, was introduced into the House of Commons
British House of Commons
The House of Commons is the lower house of the Parliament of the United Kingdom, which also comprises the Sovereign and the House of Lords . Both Commons and Lords meet in the Palace of Westminster. The Commons is a democratically elected body, consisting of 650 members , who are known as Members...
on 24 September 2004, and received Royal Assent
Royal Assent
The granting of royal assent refers to the method by which any constitutional monarch formally approves and promulgates an act of his or her nation's parliament, thus making it a law...
as the Commissioners for Revenue and Customs Act 2005
Commissioners for Revenue and Customs Act 2005
The Commissioners for Revenue and Customs Act 2005 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...
on 7 April 2005. The Act also creates a Revenue and Customs Prosecutions Office
Revenue and Customs Prosecutions Office
The Revenue and Customs Prosecution Office was a non-departmental public body created under the Commissioners for Revenue and Customs Act 2005 as an independent prosecution body to take responsibility in the England, Wales and Northern Ireland for the prosecution of criminal offences in cases...
(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
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
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
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
, stamp duty
Stamp duty
Stamp duty is a tax that is levied on documents. Historically, this included the majority of legal documents such as cheques, receipts, military commissions, marriage licences and land transactions. A physical stamp had to be attached to or impressed upon the document to denote that 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
Value added tax
A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...
and excise duties). However, a major review of the powers required by HMRC was announced at the time of the 2004 Pre-Budget Report
Pre-Budget Report
In the United Kingdom, the Autumn Statement, at times the Summer Statement and the Pre-Budget Report , is one of the two statements HM Treasury makes each year to Parliament upon publication of economic forecasts, the other being the annual Budget...
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 Finance Act 2008 (Schedule 36). The new consolidated penalty regime was introduced via Finance Act 2007 (Schedule 24).
Efficiency gains and job cuts
The total number of job losses included policy functions within the former Inland Revenue and Customs which moved into the Treasury
HM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
, 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
Serious Organised Crime Agency
The Serious Organised Crime Agency is a non-departmental public body of the Government of the United Kingdom under Home Office sponsorship...
, 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 will be in bigger cities where other offices already exist, many will be in local, rural areas, where there is no other HMRC presence. The numbers of job reductions and office closures has not been officially announced, but the proposals imply that up to 200 offices will close and a further 12,500 jobs will be lost from 2008 to 2011. In May 2009, staff morale
Job satisfaction
Job satisfaction describes how content an individual is with his /her job. The happier people are within their job, the more satisfied they are said to be. Job satisfaction is not the same as motivation or aptitude, although it is clearly linked...
in HMRC was the lowest of 11 government departments surveyed.
Performance
HMRC collected £435.7 billion for The TreasuryHM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
in 2008/09. 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.
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.
Child benefit records scandal
On 20 November 2007 the Chancellor of the ExchequerChancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
announced that two discs
CD-R
A CD-R is a variation of the Compact Disc invented by Philips and Sony. CD-R is a Write Once Read Many optical medium, though the whole disk does not have to be entirely written in the same session....
that held the personal details of all families in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
claiming child benefit
Child benefit
Child benefit is a social security payment disbursed to the parents or guardians of children. Child benefit is means-tested in some countries.-Australia:...
had gone missing. This is thought to affect approximately 25 million individuals and 7.5 million families in the UK. The missing discs include such personal details as:
- Name
- Date of birth
- National insuranceNational InsuranceNational Insurance in the United Kingdom was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits...
number - Bank details, where relevant
The ex-chancellor, Alistair Darling
Alistair Darling
Alistair Maclean Darling is a Scottish Labour Party politician who has been a Member of Parliament since 1987, currently for Edinburgh South West. He served as the Chancellor of the Exchequer from 2007 to 2010...
has stated that there is no indication that the details have fallen into criminal hands; however, he has urged people to monitor their bank accounts.
IT Problems
In February 2010, HMRC encountered problems following the implementation of their taxes modernisation program called Modernising Pay-as-you-Earn Processes for Customers (MPPC)http://www.dailymail.co.uk/money/article-1251585/Taxman-hid-truth-ta.html. 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. It was claimed that HMRC knew the errors were going to occur as early as June 2009.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.Computerisation of tax system
EDSElectronic Data Systems
HP Enterprise Services is the global business and technology services division of Hewlett Packard's HP Enterprise Business strategic business unit. It was formed by the combination of HP's legacy services consulting and outsourcing business and the integration of acquired Electronic Data Systems,...
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
Capgemini is a French global IT services company, one of the world's largest management consulting, outsourcing and professional services companies with a staff of 114,274 operating in 40 countries. It is headquartered in Paris and was founded in 1967 by Serge Kampf, the current chairman, in...
. This contract, also
with Fujitsu
Fujitsu
is a Japanese multinational information technology equipment and services company headquartered in Tokyo, Japan. It is the world's third-largest IT services provider measured by revenues....
and BT
BT Group
BT Group plc is a global telecommunications services company headquartered in London, United Kingdom. It is one of the largest telecommunications services companies in the world and has operations in more than 170 countries. Through its BT Global Services division it is a major supplier of...
, was one of the biggest ever IT outsourcing contracts, at a value of £2.6 billion.
See also
- TaxTaxTo tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
- Economy of the United KingdomEconomy of the United KingdomThe economy of the United Kingdom is the sixth-largest national economy in the world measured by nominal GDP and seventh-largest measured by purchasing power parity , and the third-largest in Europe measured by nominal GDP and second-largest measured by PPP...
- Inland RevenueInland RevenueThe 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 tax, petroleum revenue tax and stamp duty...
- Her Majesty's Customs and ExciseHer Majesty's Customs and ExciseHM Customs and Excise was, until April 2005, a department of the British Government in the UK. It was responsible for the collection of Value added tax , Customs Duties, Excise Duties, and other indirect taxes such as Air Passenger Duty, Climate Change Levy, Insurance Premium Tax, Landfill Tax and...
External links
- Commissioners for Revenue and Customs Act 2005
- Treasury Press Release (25 November 2004)