How HMRC collects tax revenue to support Government policy
A HMRC case study

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Page 1: Introduction

The UK Government provides a range of public goods and services. The main ones include:

  • education
  • benefits
  • law and order
  • defence
  • roads
  • National Health Service.

Within the UK, public expenditure is largely financed through taxation and Her Majesty's Revenue and Customs (HMRC) collects most taxes. This case study focuses upon the role of HMRC in collecting taxes and how these help the UK government to control the economy. The case also looks at the types of taxation used within the economy and the way in which HMRC communicates with businesses.

Background to HMRC

HMRC was formed in 2005 following the integration of Inland Revenue and HM Customs & Excise Department. HMRC employs nearly 100,000 staff, which is around 20% of the civil service. The department is not headed by a minister. HMRC is accountable to the Treasury and this is headed by the Chancellor of the Exchequer. HMRC is responsible for implementing the policies of government, without any prejudices towards or against one political group or another. HMRC has many roles. The main ones are to:

  • collect taxes
  • inform taxpayers of their legal responsibilities to pay tax
  • administer benefits including Child Benefit, Child Trust Fund and Tax Credits
  • protect the UK's borders against the trade in illicit goods, including drugs and other illegal items
  • enforce the National Minimum Wage
  • recover student loans.

HMRC | How HMRC collects tax revenue to support Government policy