HM Revenue and Customs

Wikipedia contributors · CC BY-SA · EN · 04/10/2026

His Majesty's Revenue and Customs (commonly known as HMRC) is a department of the UK government responsible for the collection of taxes, the payment of some forms of state support, the administration of other regulatory regimes including the national minimum wage, and the issuance of national insurance numbers.

HMRC was formed by the merger of the Inland Revenue and HM Customs and Excise, which took effect on 18 April 2005. The department's logo is the Tudor Crown enclosed within a circle.

Departmental responsibilities

HMRC is one of the largest UK government departments. The department is responsible for the administration and collection of direct taxes including Income Tax, Corporation Tax, Capital Gains Tax (CGT) and Inheritance Tax (IHT), indirect taxes including Value Added Tax (VAT), excise duties and Stamp Duty Land Tax (SDLT), and environmental taxes such as Air Passenger Duty and the Climate Change Levy. Other aspects of the department's responsibilities include National Insurance Contributions (NIC), the distribution of Child Benefit and some other forms of state support including the Child Trust Fund, enforcement of the National Minimum Wage, administering anti-money laundering registrations for Money Service Businesses 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 and then to UK Border Force and the National Crime Agency in 2013; however, HMRC officers are also regularly deployed at the border to assist on operations.

HMRC is also a law enforcement agency, responsible for investigating and tackling tax fraud, excise (tobacco & alcohol) fraud, smuggling, money laundering and a number of other types of offences against the Treasury. The criminal investigation department, known as Fraud Investigation Service (FIS), is part of its Customer Compliance Group, .

Powers of officers

HMRC has a cadre of criminal investigators responsible for investigating Serious Organised Fiscal Crime. This includes all of the previous Customs criminal work (other than drug trafficking, but used to include this up until 2008) such as tobacco, alcohol, and oil smuggling. They have aligned their previous Customs and Excise powers to tackle previous Inland Revenue criminal offences. Fraud Investigation Service 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's criminal investigation department is the Fraud Investigation Service (FIS). Officers deployed in their criminal investigation teams have the same powers as police officers, and have wide-ranging powers of arrest, entry, search and detention. HMRC have the power to apply for orders requiring information to be produced; apply for and execute search warrants; make arrests; search suspects and premises following arrest; and recover criminal assets through the Proceeds of Crime Act 2002. They also have extensive surveillance powers that authorised criminal investigation officers are trained to utilise.

The main power, exercised under section 138 of the Customs and Excise Management Act 1979 (as amended by section 114 of the Police and Criminal Evidence Act 1984), is to arrest 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.

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. On 19 July 2006, the executive chairman of HMRC, Sir David Varney resigned.

HMRC is also listed under parts of the British government which contribute to intelligence collection, analysis and assessment. Their prosecution cases may be co-ordinated with the police or the Crown Prosecution Service.

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.

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 were 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 the Finance Act 2008 (Schedule 36). The new consolidated penalty regime was introduced via the 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.

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 were in bigger cities where other offices already exist, many were in local, rural areas, where there is no other HMRC presence. Initial proposals indicated that up to 200 offices would close and a further 12,500 jobs lost from 2008 to 2011. In May 2009, staff morale in HMRC was the lowest of 11 government departments surveyed.

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.

In 2012, Revenue Scotland was formed and on 1 April 2015 it took HMRC responsibility to collect devolved taxes in Scotland. 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 replace local offices with 13 regional centres by 2027.

In 2022, HMRC announced plans to dissolve Revenue and Customs Digital Technology Services (RCDTS) Ltd, an arms-length not-for-profit company that had provided certain IT services to HMRC. The company was set up and wholly owned by HMRC. It had roughly 750 employees. The majority of former RCDTS staff transferred to HMRC in the 2022/23 financial year.

Notable cases

From August 2017 to April 2018, HMRC investigated an organised crime group based in Bolton that was involved in smuggling cigarettes into the United Kingdom, evading more than £41 million in tax and duty. In April 2026, eleven men were found guilty with five of them being sentenced to jail terms of up to three years and four months.

Between 2020 and at least 2026, HMRC participated in Operation Venetic, the United Kingdom's response to the infiltration of the EncroChat encrypted communications network by organised crime. Led by the National Crime Agency (NCA) and involving HMRC, regional organised crime units and police forces, the operation targeted organised crime groups engaged in drug trafficking, money laundering, tax and excise fraud, and large-scale smuggling. By 2023, the operation had resulted in more than 3,100 arrests and 1,240 convictions, with the seizure of over nine tonnes of Class A drugs, 173 firearms and millions of pounds in criminal assets, with prosecutions continuing in subsequent years.

In July 2026, HMRC announced that its largest ever fine for arms export control breaches. Airbus paid a fine of £6.4 million to UK revenue and ‌customs authorities to settle a two-year-old investigation into export control violations. The investigation focused on anomalies over the cross-border transfer of parts for the A400M military airlifter that came to light during an audit in 2022.

According to HMRC sources, the breaches included:

Failing to keep accurate records of transfers of controlled technology as per the conditions of three of their open general export licences (OGELs)

Failing to keep registers in relation to OGELs

Failing to keep accurate records contrary to the conditions of one of their OGELs

A failure of licence conditions on a standard individual export licence (SIEL)

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 Daniel Tomlinson.

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.

Sir David Varney April 2005 – August 2006

Paul Gray (acting) September 2006 – February 2007 and (confirmed) February 2007 – November 2007

Dave Hartnett (acting) 2007 – 31 July 2008

Mike Clasper 1 August 2008 – 1 August 2012

Chief executive

The chief executive is also the first permanent secretary for HMRC and the accounting officer.

Dame Lesley Strathie 2008–2011

Dame Lin Homer 2012–2016

Sir Jon Thompson 2016–2019

Sir Jim Harra 2019–2025

John-Paul Marks 2025–present

Executive chair and permanent secretary

Sir Edward Troup April 2016 – January 2018

Non-executive board members

Non-executive board members as of November 2019:

Mervyn Walker (lead non-executive director)

Michael Hearty

Simon Ricketts

Alice Maynard

Juliette Scott

Paul Morton

Patricia Gallan

Personnel

Permanent secretary

Director general

Director

Deputy director

Grade 6

Grade 7

Senior officer

Higher officer

Officer

Assistant officer

Administrative assistant

Source:

See civil service grading schemes for details.

HMRC's Criminal Investigators and Mobile Enforcement Officers deployed within Fraud Investigation Service are uniformed officers. HMRC Officers have the same powers as police officers, but their equivalent police ranks are at a higher grade (see table below):

Officers of HMRC's Mobile Enforcement Teams in Great Britain wear black polo shirts, gold braid epaulettes and trousers, while officers in Northern Ireland wear either white or navy shirts with gold braid epaulettes and navy trousers. Should further protection be needed, HMRC enforcement officers have the option of wearing heavy-duty fluorescent sludge jackets.

Performance

HMRC collected £660 billion for the Treasury in 2018/19. It estimated that total theoretical tax liabilities in that year were £629 billion, but £31 billion was not collected due to the "tax gap", made up of money lost to tax evasion, tax avoidance, error and unpaid tax debts. This equates to a collection rate of 95.3% (up from 92.7% in 2005-6).

Source and attribution

Adapted from “HM Revenue and Customs” by English Wikipedia contributors. Main paragraphs and sections are retained; tables, reference markers and technical markup are omitted. This is an encyclopedic adaptation, not a personal review. Original revision and contributor history ↗. Text is shared under CC BY-SA 4.0 ↗. Check current visitor access, tickets and transport with the relevant operator.