HMRC’s latest annual report and accounts show total revenues collected in 2016/17 of £574.9bn, which is an increase of £38.1bn (7.1%) compared with 2015/16. The report breaks this increase down as follows:
income tax (30% of total revenue) and NICs (21% of total revenue) increased by 5.3% due to increases in employment levels, higher wages and the ending of NICs contracting-out;
VAT (22% of total revenue) increased by 7.2% due to higher receipts from oil, gas and mining as a result of increased oil prices, with strong growth also in the construction and chemicals/pharmaceuticals sectors;
corporation tax (9% of total revenue) increased by 12.3% due to rising company profits;
hydrocarbon oils (5% of total revenue) increased by 1.1%;
stamp taxes (3% of total revenue) increased by 6.2% due to SDLT changes and rising house prices;
CGT (1.5% of total revenue) increased by 15.1% due to higher average gain per disposal of assets; and
tobacco (1.5% of total revenue) reduced by 4.4% due to the fall in cigarette consumption.
The remaining 5% of total revenue was made up of inheritance tax, insurance premium tax and air passenger duty.
The extra yield from compliance interventions amounted to £28.9bn. This overall figure includes certain estimates, comprising:
£10.3bn of cash expected;
£7.9bn of revenue loss prevented;
£6.3bn of future revenue benefit (estimated effect of compliance interventions on taxpayers’ future behaviour);
£3bn of product and process yield (estimated impact of legislative changes to close tax loopholes, etc); and
£1.3bn of revenue from accelerated payment notices.
Investigations and enforcement action against organised crime generated or protected £3.2bn in 2016/17. HMRC’s latest estimate of the tax gap for this group is £4.8bn for 2014/15.
HMRC’s administration costs, including staff, amounted to £3.8bn, representing 8% of total expenditure, including tax credits and child benefit payments. The cost of collecting taxes remained at 55p for each pound collected.
Details of performance against customer service objectives during 2016/17 are contained in an update to HMRC’s ‘Single departmental plan’. These included:
81% of post cleared within 15 working days from receipt and 96% within 40 working days; and
92% of calls answered across all telephone helplines (against a target of 85%), with an average speed of answering of around four minutes (against a target of six minutes).
The National Audit Office (NAO) noted in its report on the latest HMRC figures the increase in tax revenues and that HMRC’s customer service performance had improved ‘significantly’. However, the report also commented that ‘error and fraud is rising within tax credits and HMRC needs to make it easier for claimants to get help’.
‘HMRC is part-way through an ambitious programme to bring in digital services and reduce its costs. In doing so, HMRC must ensure it maintains adequate services if it is to protect revenue and tackle error and fraud’, the NAO said.
HMRC’s latest annual report and accounts show total revenues collected in 2016/17 of £574.9bn, which is an increase of £38.1bn (7.1%) compared with 2015/16. The report breaks this increase down as follows:
income tax (30% of total revenue) and NICs (21% of total revenue) increased by 5.3% due to increases in employment levels, higher wages and the ending of NICs contracting-out;
VAT (22% of total revenue) increased by 7.2% due to higher receipts from oil, gas and mining as a result of increased oil prices, with strong growth also in the construction and chemicals/pharmaceuticals sectors;
corporation tax (9% of total revenue) increased by 12.3% due to rising company profits;
hydrocarbon oils (5% of total revenue) increased by 1.1%;
stamp taxes (3% of total revenue) increased by 6.2% due to SDLT changes and rising house prices;
CGT (1.5% of total revenue) increased by 15.1% due to higher average gain per disposal of assets; and
tobacco (1.5% of total revenue) reduced by 4.4% due to the fall in cigarette consumption.
The remaining 5% of total revenue was made up of inheritance tax, insurance premium tax and air passenger duty.
The extra yield from compliance interventions amounted to £28.9bn. This overall figure includes certain estimates, comprising:
£10.3bn of cash expected;
£7.9bn of revenue loss prevented;
£6.3bn of future revenue benefit (estimated effect of compliance interventions on taxpayers’ future behaviour);
£3bn of product and process yield (estimated impact of legislative changes to close tax loopholes, etc); and
£1.3bn of revenue from accelerated payment notices.
Investigations and enforcement action against organised crime generated or protected £3.2bn in 2016/17. HMRC’s latest estimate of the tax gap for this group is £4.8bn for 2014/15.
HMRC’s administration costs, including staff, amounted to £3.8bn, representing 8% of total expenditure, including tax credits and child benefit payments. The cost of collecting taxes remained at 55p for each pound collected.
Details of performance against customer service objectives during 2016/17 are contained in an update to HMRC’s ‘Single departmental plan’. These included:
81% of post cleared within 15 working days from receipt and 96% within 40 working days; and
92% of calls answered across all telephone helplines (against a target of 85%), with an average speed of answering of around four minutes (against a target of six minutes).
The National Audit Office (NAO) noted in its report on the latest HMRC figures the increase in tax revenues and that HMRC’s customer service performance had improved ‘significantly’. However, the report also commented that ‘error and fraud is rising within tax credits and HMRC needs to make it easier for claimants to get help’.
‘HMRC is part-way through an ambitious programme to bring in digital services and reduce its costs. In doing so, HMRC must ensure it maintains adequate services if it is to protect revenue and tackle error and fraud’, the NAO said.
