John Faraday HMRC

john faraday

John Faraday HMRC

John Faraday HMRC HM Revenue and Customs advice and help guide.

Her Majesty’s Revenue and Customs (HM Revenue and Customs or HMRC)[3] is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support and the administration of other regulatory regimes including the national minimum wage.

HMRC was formed by the merger of the Inland Revenue and Her Majesty’s Customs and Excise, which took effect on 18 April 2005.[4] The department’s logo is the St Edward’s Crown enclosed within a circle.

Departmental responsibilities John Faraday HMRC

The department is responsible for the administration and collection of direct taxes including income tax and corporation tax, capital taxes such as capital gains tax and inheritance tax, indirect taxes (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,[5] administering anti-money laundering registrations for Money Service Businesses[6] and collection and publication of the trade-in-goods statistics.[7] 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.

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 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. The main power is to detain 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.[8]

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.[9] On 19 July 2006, the Executive Chairman of HMRC, Sir David Varney resigned.[10]

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 or the Crown Prosecution Service.

Structure

The department is organised around four operational groups, each led by a director general. The four operational groups are:[11]

  • Personal Tax
    • led by Mike Baker

In addition to the four operational groups, there are five supporting groups. These are:[11]

  • Permanent Secretary for Tax group
  • Chief Finance Officer group
  • Chief information Officer group
  • General Counsel and Solicitor group
  • Chief People Officer group

HMRC deals with the top 2,000 large business via CRM (Customer Relationship Managers). The next 8,400 business are dealt with via Customer Co-ordinators who provide a single point of contact with HMRC.[13]

History

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.

Headquarters are at 100 Parliament Street, Westminster John faraday HMRC

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 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 suggested this may save around £300 million in staff costs, out of a total annual budget of £4 billion.

Logo of HMRC until 2013

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 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 were to be 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 close 137 local offices and replace them with 13 regional centres by 2027.[22][23]

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 Financial Secretary to the Treasury, Mel Stride MP.[24]

Chief Executive

The Chief Executive is also the Permanent Secretary for HMRC and the Accounting Officer.

Jon Thompson, formerly Permanent Secretary of the Ministry of Defence, succeeded Lin Homer as Chief Executive in April 2016.[26]

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.

Executive Chair and Permanent Secretary

Non-executive board members

Non-executive board members[27] as of January 2013 are:

  • Ian Barlow (lead non-executive director)
  • Volker Beckers
  • Colin Cobain
  • Edwina Dunn
  • Philippa Hird
  • Phil Hodkinson
  • Norman Pickavance
  • John Whiting

Personnel