HM REVENUE AND
CUSTOMS News Release (Ref:NAT 46 /07) issued by The Government News
Network on 12 July 2007
HM Revenue &
Customs (HMRC) Chairman Paul Gray said today's NAO report
into HMRC's accounts shows that the Department is getting it
right in many ways.
In 2006 -07 HMRC:
* delivered £437 billion in revenues to the Exchequer. This
represents an increase of £31.7 billion (7.8%) on last year.
* reduced VAT fraud
* beat its target of 35% for the number of self assessment tax
returns filed on line
* processed record numbers of employers' returns faster than
ever before
HMRC Chairman Paul Gray said:
"I'm pleased that the NAO has recognised the
improvements HMRC has made to the quality of PAYE processing and
the good progress we've made in engaging with taxpayers on-line."
"Six million families and ten million children benefit from
tax credits. We have reduced the amount of error and fraud in the
tax credit system and I have put in place a fundamental review to
accelerate the testing of levels of errors and fraud. This will
enable us to set clear targets to reduce this further."
"HMRC's work affects everyone, man, woman and child in
the UK. Much of our work is technically complex relying on
sophisticated computer systems or professional financial and legal
skills. Our intelligence led, risk-based approach efficiently
focuses our resources, for example, on those who deliberately
avoid paying their fair share of tax or to counter attempts to
smuggle dangerous drugs."
"But there is still more to be done to ensure that we
provide a high quality service to all our customers."
"We will take on board the NAO's recommendations and
work closely with interested parties and stakeholders to help us
to improve. We are committed to delivering a top class service to
the public."
Income tax PAYE
The report recognises the improvements HMRC has made to its
income tax processing, including work to bring all the information
on individual taxpayers together under a single computer record.
This will make our PAYE service much quicker and more accurate.
On-line services
The Department continues to be at the forefront of on-line
services. Our target of receiving 35% of Self Assessment returns
on-line has already been exceeded.
Small pensions
The Department has already begun work to ensure that small
pensions are taxed fairly. We will not normally collect any tax
unpaid on small pensions before 2007-08. HMRC has improved its
guidance and local office procedures for the future and will take
up the NAO's recommendation on communication with stakeholders.
Tax credits
HMRC tax credit compliance teams carried out checks on 137,930
claims and potentially incorrect payments of £138 million were
prevented. In 2006 -07 HMRC compliance work prevented tax credit
claims with a value of £212 million being paid out incorrectly on
suspicion of organised fraud.
VAT fraud
HMRC's strengthened strategy for tackling Missing Trader
Intra-Community (MTIC) fraud, including the extended verification
of suspect VAT repayment claims, has greatly reduced the level of
fraud-related activity in the UK. HMRC is determined to build on
this success. On 1 June 2007 the Government introduced a targeted
Reverse Charge, and this year's Finance Bill strengthens
HMRC's ability to respond rapidly should the fraud mutate
into commodities not covered by the Reverse Charge. MTIC related
trading activity has fallen by around 90 per cent since the summer
of 2006.
Notes for editors
1. Our employer on-line service has also continued to improve.
Four months after the end of the employers' filing deadline,
86% of employers' returns had been successfully processed -
an improvement of 29% over the previous year.
2. HMRC pays out some £18 billion a year in tax credit support to
families and the low paid. Around six million families with
children directly benefit from tax credits by an average of £1,550
a year.
Some £3.9 billion in overpaid tax credits was owed to HMRC by the
end of March 2007 (down from an earlier total of £6 billion). HMRC
will recover £1.5 billion of this direct from tax credit claimants
and will recover a further £1.7 billion from future awards. The
balance is not currently under active recovery for a number of
reasons e.g. because the claimant's appeal period had not ended.
The 2005 Pre Budget report set out a substantial package of
measures which will reduce overpayments in future years by around
a third.
4. All tax credit claims are subject to verification checks
before payments. HMRC also conducts a risk assessment on all
claims and reported changes with examination of cases where
sufficient risk is identified. The number of cases currently
subject to formal examination prior to payment has doubled to just
under 50% of all tax credit cases enabling errors to be corrected
at a very early stage. Rigorous compliance checks are also
regularly carried out on claims in payment direct tackling paper
based fraud attempts.
Issued by HM Revenue & Customs Press Office
Website http://www.hmrc.gov.uk