The report and accounts for 2016/2017 shows HMRC marking the seventh consecutive year of record total tax revenues, collecting a total of £574.9bn – £38.1bn (or 7.1%) more than last year.
“In the last year, we have generated £28.9bn of compliance yield, billions of pounds that would have otherwise been lost to the UK through avoidance, evasion and organised crime but will now be spent on public services”, HMRC chief executive Jon Thompson said.
The £29bn collected as a result of the stricter measures implemented by the government to discourage tax-dodging behaviour amount to £1,000 for every UK household, Thompson highlighted.
“The message is clear to those who try to not pay their fair and legal share: there is nowhere left to hide”, he said.
Tax law enforcement
During the past fiscal year, HMRC said it has handled more than 1,200 cases heard in courts and tribunals – winning 83% and protecting £15bn in tax revenues.
“Our ability to collect the money required to fund the UK’s public services is, of course, the ultimate yardstick by which we will be measured, but the public rightly judge us on the quality of service we provide to the overwhelming majority of people in the UK who are honest and pay the right amount of tax on time”, HMRC executive chair and permanent secretary Edward Troup said.
Troup said the department remains strongly committed to pursuing tax dodgers.“Our continued progress on developing increasingly sophisticated and world-leading techniques will further close this net, making it harder than ever to get away with”.
“Our continued progress on developing increasingly sophisticated and world-leading techniques will further close this net, making it harder than ever to get away with”.
The report also showed that HMRC had brought more than 500 serious organised criminals to justice over the last six years.
Last year alone, the agency’s investigations and enforcement action against organised crime have generated or protected £3.2bn in compliance yield.
Compliance yield dissected
Compliance yield includes not only cash expected, but also an estimate of the amount of revenue HMRC prevents from being lost, together with the impact of legislative changes, process improvements and the department’s compliance activity on future customer behaviour.
The breakdown of the £29bn compliance yield for 2016/17 revenues as outlined in the HMRC's annual report include:
- £10.3bn of cash expected;
- £7.9bn of revenue loss prevented;
- £6.3bn of future revenue benefit, i.e. the estimated effect of HMRC compliance interventions on customers’ future behaviour;
- £3bn of product and process yield i.e. the estimated annual impact on net tax receipts of legislative changes to close tax loopholes and changes to HMRC processes which reduce opportunities to avoid or evade tax;
- £1.3bn of revenue from Accelerated Payments notices, i.e. the disputed amounts of tax that people using tax avoidance schemes are now required to pay up-front within 90 days, as well as an estimate of the behavioural change that the policy has generated.