HMRC’s latest annual report and accounts show total revenues collected in 2018/19 of £627.9bn, which is an increase of £22.1bn (3.6%) compared with 2017/18. The report breaks down this figure as follows:
income tax (£194bn) and NICs (£135bn) increased by 4% overall due to higher employment and wage levels;
VAT (£135.6) increased by 5.4% on higher receipts from the business services, banking and utilities sectors;
corporation tax (£53.5bn) increased by 0.4%;
hydrocarbon oils (£28bn) increased by 0.4%;
stamp taxes (£15.7bn) decreased by 5.4% largely due to devolution of land transaction tax to Wales and the introduction of first-time buyers relief;
CGT (£9.3bn) increased by 19.2% although full information is not yet available on reasons for the increase; and
tobacco (£9.2bn) increased by 4.5% due to rises in duty rates;
alcohol (£12.1bn) increased by 5.2% due to rises in duty rates; and
insurance premium tax (£6.4bn) increased by 3.2% due to a rise in the insurance market.
The remaining £25.5bn of total revenue was split between 14 other taxes, duties and levies, the three largest shares belonging to IHT, APD and customs duties.
The total includes £145.7bn that had not been collected at 31 March 2019 (including £28.8bn assessed and due, and £116.9bn of estimated liabilities accrued but not due for payment by 31 March).
The report also provides a breakdown of revenues between five main taxpayer groups:
individuals (with income below £150,000 and assets below £1m), estimated receipts of £250bn;
wealthy individuals (with income above £150,000 or assets above £1m), estimated receipts of £54bn;
small businesses (with turnover below £10m and fewer than 20 employees), estimated receipts of £115bn;
mid-sized businesses (with turnover between £10m and £200m, or 20 or more employees), estimated receipts of £50bn; and
large businesses (with turnover exceeding £200m, or £2bn in assets), estimated receipts of £135bn.
The extra yield from compliance interventions amounted to £34.1bn (£30.3bn in 2017/18), including the following estimates in respect of the main taxpayer groups:
individuals (£2.4bn);
wealthy individuals (£1.8bn);
small businesses (£5.6bn);
mid-sized businesses (£4bn); and
large businesses (£10bn).
The overall compliance yield figure is made up of the following elements:
£13.1bn of cash expected;
£9.3bn of revenue loss prevented;
£7.6bn of future revenue benefit (estimated effect of compliance interventions spread over future years);
£3.7bn of product and process yield (estimated impact of legislative changes to close tax loopholes etc); and
£0.3bn of revenue from accelerated payment notices.
Investigations and enforcement action against organised crime generated or protected more than £3bn in 2018/19.
HMRC’s total expenditure included £22.3bn paid out in tax credits, and £11.5bn paid out in child benefit. HMRC’s administration costs, including staff, amounted to £3.9bn. The cost of collecting taxes was 52p for each pound collected in 2018/19 (showing a downward trend from 58p in 2014/15).
Performance against key customer service objectives during 2018/19 included:
76.6% of post turned around within 15 working days (against a target of 80%);
94.1% of online iForms processed within seven days (against a target of 95%);
5.14 minutes the average time taken to answer phone calls (against a target of 5 minutes); and
19.7% of callers waited 10 minutes to be connected to an adviser (against a target of 15%).
HMRC’s latest estimate of the level of error and fraud in tax credits is based on 2017/18, showing overpayments amounting to 5.7% of expenditure (against a target of 5%) reaching their highest level since 2011/12. This compares with 4.7% in 2016/17. Errors resulting in tax credits underpayments amounted to 0.6% of expenditure, compared with 0.7% in 2016/17. Despite the reduction in new error and fraud entering the system as tax credits claimants are transferred to universal credit, HMRC expects error and fraud to increase to around 6.8% in 2018/19.
This material level of error and fraud in tax credits has caused the NAO’s comptroller and auditor general to qualify his opinion on the regularity of the 2018/19 accounts. The NAO report states that HMRC has not made changes to tax credits and compliance activity that could have reduced error and fraud, largely due to the competing demands of Brexit and the transition to universal credit.
The comptroller and auditor general, Gareth Davies, commented: ‘No tax collection system can ensure that everyone meets their obligations, but HMRC can do more to get a clearer picture of the causes of fraud and error in tax credits, the increase in self-assessment tax returns and what these mean to its costs and plans going forward. HMRC will need to do this against a challenging backdrop of preparing for the UK’s exit from the EU.’
See HMRC annual report and accounts: 2018 to 2019, via bit.ly/2JV3HEc.
HMRC chief executive, Sir Jonathan Thompson, has announced that he is to leave the department in the Autumn to take on a new role as chief executive of the Financial Reporting Council.
HMRC’s latest annual report and accounts show total revenues collected in 2018/19 of £627.9bn, which is an increase of £22.1bn (3.6%) compared with 2017/18. The report breaks down this figure as follows:
income tax (£194bn) and NICs (£135bn) increased by 4% overall due to higher employment and wage levels;
VAT (£135.6) increased by 5.4% on higher receipts from the business services, banking and utilities sectors;
corporation tax (£53.5bn) increased by 0.4%;
hydrocarbon oils (£28bn) increased by 0.4%;
stamp taxes (£15.7bn) decreased by 5.4% largely due to devolution of land transaction tax to Wales and the introduction of first-time buyers relief;
CGT (£9.3bn) increased by 19.2% although full information is not yet available on reasons for the increase; and
tobacco (£9.2bn) increased by 4.5% due to rises in duty rates;
alcohol (£12.1bn) increased by 5.2% due to rises in duty rates; and
insurance premium tax (£6.4bn) increased by 3.2% due to a rise in the insurance market.
The remaining £25.5bn of total revenue was split between 14 other taxes, duties and levies, the three largest shares belonging to IHT, APD and customs duties.
The total includes £145.7bn that had not been collected at 31 March 2019 (including £28.8bn assessed and due, and £116.9bn of estimated liabilities accrued but not due for payment by 31 March).
The report also provides a breakdown of revenues between five main taxpayer groups:
individuals (with income below £150,000 and assets below £1m), estimated receipts of £250bn;
wealthy individuals (with income above £150,000 or assets above £1m), estimated receipts of £54bn;
small businesses (with turnover below £10m and fewer than 20 employees), estimated receipts of £115bn;
mid-sized businesses (with turnover between £10m and £200m, or 20 or more employees), estimated receipts of £50bn; and
large businesses (with turnover exceeding £200m, or £2bn in assets), estimated receipts of £135bn.
The extra yield from compliance interventions amounted to £34.1bn (£30.3bn in 2017/18), including the following estimates in respect of the main taxpayer groups:
individuals (£2.4bn);
wealthy individuals (£1.8bn);
small businesses (£5.6bn);
mid-sized businesses (£4bn); and
large businesses (£10bn).
The overall compliance yield figure is made up of the following elements:
£13.1bn of cash expected;
£9.3bn of revenue loss prevented;
£7.6bn of future revenue benefit (estimated effect of compliance interventions spread over future years);
£3.7bn of product and process yield (estimated impact of legislative changes to close tax loopholes etc); and
£0.3bn of revenue from accelerated payment notices.
Investigations and enforcement action against organised crime generated or protected more than £3bn in 2018/19.
HMRC’s total expenditure included £22.3bn paid out in tax credits, and £11.5bn paid out in child benefit. HMRC’s administration costs, including staff, amounted to £3.9bn. The cost of collecting taxes was 52p for each pound collected in 2018/19 (showing a downward trend from 58p in 2014/15).
Performance against key customer service objectives during 2018/19 included:
76.6% of post turned around within 15 working days (against a target of 80%);
94.1% of online iForms processed within seven days (against a target of 95%);
5.14 minutes the average time taken to answer phone calls (against a target of 5 minutes); and
19.7% of callers waited 10 minutes to be connected to an adviser (against a target of 15%).
HMRC’s latest estimate of the level of error and fraud in tax credits is based on 2017/18, showing overpayments amounting to 5.7% of expenditure (against a target of 5%) reaching their highest level since 2011/12. This compares with 4.7% in 2016/17. Errors resulting in tax credits underpayments amounted to 0.6% of expenditure, compared with 0.7% in 2016/17. Despite the reduction in new error and fraud entering the system as tax credits claimants are transferred to universal credit, HMRC expects error and fraud to increase to around 6.8% in 2018/19.
This material level of error and fraud in tax credits has caused the NAO’s comptroller and auditor general to qualify his opinion on the regularity of the 2018/19 accounts. The NAO report states that HMRC has not made changes to tax credits and compliance activity that could have reduced error and fraud, largely due to the competing demands of Brexit and the transition to universal credit.
The comptroller and auditor general, Gareth Davies, commented: ‘No tax collection system can ensure that everyone meets their obligations, but HMRC can do more to get a clearer picture of the causes of fraud and error in tax credits, the increase in self-assessment tax returns and what these mean to its costs and plans going forward. HMRC will need to do this against a challenging backdrop of preparing for the UK’s exit from the EU.’
See HMRC annual report and accounts: 2018 to 2019, via bit.ly/2JV3HEc.
HMRC chief executive, Sir Jonathan Thompson, has announced that he is to leave the department in the Autumn to take on a new role as chief executive of the Financial Reporting Council.
