HMRC is unique as a government department. It is the UK’s tax collector, helping to fund government services and provide benefits. Collecting the right amount of tax, at the right time, is one of HMRC’s core missions. Collecting the right amount of tax is what pays for our roads, our hospitals, the salaries of nurses and teachers across the country.

Because of this critical role in underpinning the rest of government, it is critically important that HMRC functions at the highest possible level.
This report details where, over the last decade, HMRC has had challenges, and provides insight into where HMRC will face obstacles in the future. It is designed to provide a pathway for HMRC to future proof itself for a Government of any political stripe.

The report identifies that HMRC’s workload has changed significantly over the last decade to mirror changes in the wider economy, as well as demographic pressures. HMRC now manages more complex tax administration, and more frequently, than it has had in previous decades.

We suggest a large-scale investment into HMRC which would help resolve some of these issues. We estimate investment of £910m would return £11.3bn to the treasury over a parliament and would meaningfully reduce the tax gap. Critically this investment would include £210m for HMRC customer services. Some of this expected return could also be put to use in upgrading HMRC’s legacy systems and technologies, which would over the long-term further increase HMRC’s productivity. Even after these investments there would be significant sums for a Government of any stripe to invest in the core public services that are so critical to the functioning of our society.

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